[Imc-finance] Incorporation & financial structures.

[Sascha Meinrath]

Hi Fellow IMC-istas,

I've been away from e-mail this last weekend presenting at a community
empowerment conference about incorporating community organizations and
applying for 501(c)(3) [non-profit] status -- so these issues are quite
fresh in my own mind. I've been catching up on global finance IMC e-mail
and wanted to add my own thoughts to the discussion -- and hopefully move
things towards resolution.

Cinde brought up an interesting problem with what to do with the Global
IMC's finances.  I think we should be working to keep as much money as
possible within the IMC network -- applying for non-profit status is one
longer-term and important way to do this; using our own fiscal sponsors
(like the Urbana-Champaign IMC) is another.  Currently, we will probably
have to pay taxes on interest and other taxable income because we are not
a non-profit.  If we organize (or hold our money as a program of a
non-profit) we can keep this money in the network.

One possibility is to make the Global IMC a program of the
Urbana-Champaign IMC -- it sounds somewhat strange but would effectively
allow us to maintain the current organizational structure and work
financially as a program of a non-profit organization.  I would suggest
making this for a fixed term (e.g. one year) or until the Global IMC gets
non-profit status, whichever is sooner.  This term limit could be renewed
by the Global IMC, and would address the problem of one IMC becoming a
nexus for Global finances.

I fully support the decentralization of financial resources -- continental
slush-funds sound like a good idea.  However, if we organize as a
non-profit, we must also make sure that Global IMC money is utilized in
ways that are within the parameters of what non-profits can do.  There
will be a tension between the desires of some IMC participants and the
legal constraints of being a non-profit organization.  The
Urbana-Champaign IMC has dealt with with by explicitly stating that the
UCIMC is a common that is utilized by many different projects; as such,
projects which threaten the viability of the UCIMC (e.g. by using funds
for political campaigns or illegal activities) will not be financially
supported by the UCIMC.  This is already an implicit protocol as we are
using a fiscal sponsor, but I would like to see anyone who disburses
funding made aware of these constraints.

We need to also empower a small group of people to write mission-critical
checks to maintain the organization and pay for some things without
needing to have the entire financial group decide on the issue.  The way
we've dealt with this locally is that I am empowered to pay expenses to
keep the Urbana-Champaign IMC running and I can spend money (up to $100)
at my own discretion without consulting the finance working group (i.e. I
let them know after the fact, but do not have to get their approval before
then).  Financial decisions that are over $100 or are not mission-critical
have to be signed off on by the financial working group; and financial
decisions that affect the UCIMC as a whole and require sizable outlays
that mean that other programs of the UCIMC will not have funding for a
short time (e.g. paying for the UCIMC audio, video, phone, and ethernet
infrastructure) need to be signed off on by the UCIMC steering committee
(which is made up of representatives from all the UCIMC's working groups
as well as all members of the UCIMC who wants to attend the meeting).
 These 3 levels of decision-making power enable us to be proactive in
disbursing funding, make small decisions easy and quick, and provide
adequate checks and balances (e.g. I can be overridden by the Finance
Group, which in turn can be overridden by the steering committee).  I
would like to see us emulate these decision-making processes since they
would allow for maximum local control of financial resources while still
providing a degree of oversight over what is in essence a monetary common
that will be shared throughout the Global network.

--Sascha Meinrath
Urbana-Champaign IMC