[Imc-finance] FYI: [P2PJ] K5 fundraising / 501(c)(3)
Anna
anna at mail.nadir.org
Thu Jul 11 12:33:08 2002
hi all,
i have to admit that i don't understand this at all - is it something that
concerns the u.s. only?
if yes: i was going to suggest for topics that are u.s./north america-only
to maybe create mailing lists such as we have imc-europe@indymedia.org
anyway - to avoid confusing others and also to avoid the rest of he world
to feel like "not really being a part of it". it happens every now and then
that north americans forget that things work differently elsewhere ;). has
something like this been thought about before?
if no: could you explain the idea behind this please?
Anna
indy.de
At 11:50 11.07.02 -0600, shane wrote:
>FYI: I just read this post by rusty at kuro5hin.org on the peer to peer
>journalism list at infoanarchy.org re: their fundraising and legal status
>and figured indy kidz would be interested....
>
>I think there would be merit in taking a hard look at the co-op model as
>an alternative for Indymedia as it mandates self organization, federation,
>and mutual aid.
>
>in solidarity,
>shane
>
>
>>Delivered-To: shane@indymedia.org
>>Date: Thu, 27 Jun 2002 12:00:04 +0000
>
>>From: Rusty Foster <rusty@kuro5hin.org>
>>To: p2pj@infoanarchy.org
>>Subject: Re: [P2PJ] K5 fundraising
>>Reply-To: p2pj@lists.infoanarchy.org
>>
>>Michael Sims wrote:
>>>
>>> On Tuesday 18 June 2002 11:39 am, Erik Moeller wrote:
>>>
>>> > Again, Kuro5hin.org has made some innovative changes to become a
>>> > self-sustainable P2PJ community. They are now becoming a non-profit and
>>> > will hold regular fundraising drives to attain the necessary budget.
>>>
>>> It is... interesting, certainly. I question whether Kuro5hin can
>>> legitimately claim tax-exempt status, as they do not appear to fit very
>>> well into any of the categories set forth under the law: charitable,
>>> religious, educational, scientific, literary, testing for public safety,
>>> or prevention of cruelty to children or animals. (That's assuming
>>> 501(c)(3); 501(c)(7) is actually closest to Kuro5hin, but it is a form
>>> that Rusty expressly rejects. :)
>>
>>My best guess right now is we'd be categorized under "educational". That
>>seems to cover purposes like running discussions and debates. "Literary"
>>seems to be very specifically geared toward print publishing, so that's
>>probably not going to work.
>>
>>>
>>> At a minimum whatever corporate structure currently exists will have to
>>> be dissolved and reformed. There are a not-insignificant number of hoops
>>> to jump through. If the organization pays Rusty a salary (or otherwise
>>> compensates him) above market rates, it jeopardizes its status. (In
>>> fact, it appears that if Rusty receives any money whatsoever from the
>>> organization, there may be problems - consult a tax lawyer.)
>>
>>The corporate organization and bylaws will be totally rewritten,
>>certainly. Paying an administrator is not at all out of the question,
>>whoever it ends up being. If I apply for the job and I also sit on the
>>Board (a situation which is rather likely to occur), I will be
>>abstaining from any hiring decisions, naturally.
>>
>>There seem to be a lot people who think that being nonprofit means
>>you're not allowed to compensate employees fairly. That's not true at
>>all. Hiring and compensation simply has to be done in an open and
>>above-board manner, and whenever someone is hired who may have a
>>directorial say in the organization, they need to abstain from the
>>process. A little common sense goes a long way. If you understand the
>>purpose of the rules, it's easy to figure out what course of action to
>>take to remain in compliance with them.
>>
>>>
>>> All political articles on K5 jeopardize its status, as exempt
>>> organizations are totally forbidden from engaging in advocacy over public
>>> elections and are heavily restricted from advocating for or against
>>> particular legislation.
>>>
>>> So the next time a story hits the queue that says, "Vote against Senator
>>> X, the Disney Senator", what will the choice be:
>>>
>>> a) let it go and risk losing tax-exempt status
>>> b) delete it by executive fiat
>>
>>This is currently my biggest question mark in the whole process. It's
>>not worth becoming a 501(c)(3) if it means we have to ban certain
>>articles or comments. I spoke to the director of e-thepeople.org, a
>>nonprofit that promotes democracy and political engagement, and he had
>>run into the same question founding his organization. They are currently
>>operating under the assumption that the "no advocacy" rule isn't
>>relevant because they are not, as an organization, sponsoring a
>>particular viewpoint or interfering in free debate. That is, providing a
>>place for people to speak freely is not the same as underwriting or
>>advocating whatever it is they say.
>>
>>We've engaged a very experienced nonprofit lawyer, and this is the major
>>question I have for her at this point. If that seems like a reasonable
>>stance, and is not contradicted by any existing case law, then we will
>>probably proceed under the same assumption. It seems that, as usual in
>>the developing area of the net, the law is not particularly clear or
>>well-established. My best analogy so far is that operating K5 is not
>>like publishing pamphlets, but more like maintaining a public
>>meeting-hall. If visitors to our meeting hall advocated political
>>action, would we have to give them the boot, or merely ensure that there
>>is equal opportunity for speakers with any viewpoint? It seems the
>>latter makes sense, but of course we'll be finding out what case law
>>says.
>>
>>>
>>> Another note: donations aren't donations when the donator gets a benefit
>>> in return. So the text ads, or t-shirts, or whatever, would not be
>>> tax-deductible for the donator.
>>>
>>> Further, as a minor note: I question whether most contributors to K5
>>> itemize their deductions. If they do not, tax-exempt status provides no
>>> benefits to them.
>>
>>There's a large gray area here. Donations are tax deductible even if the
>>donor receives a "thank you gift." See public television and NPR
>>fundraising. It seems that the difference is largely a matter of
>>phrasing, and possibly also of cost. That is, if you have to donate $120
>>to get the t-shirt gift, can anyone make a reasonable case that you're
>>actually buying a t-shirt? That would be an awfully expensive t-shirt.
>>
>>
>>> So in summary: it will be difficult (I'm not quite willing to say
>>> impossible, but I think it unlikely) to be recognized as a tax-exempt
>>> organization, and I see only a minor benefit to the community for doing
>>> so.
>>
>>The benefits to the community are:
>>
>>* Assurance of democratic operation at the organizational level. If you
>>don't like decisions that the Board makes, you can vote the bums out.
>>
>>* Assurance that the site can not be sold to some company who will wreck
>>everything that made it valuable.
>>
>>* Assurance that I do not personally hold the fate of K5 in my clammy
>>little hands. Web community owners go broke, get burned out, find other
>>projects, etc. I'm not going to run K5 for the rest of my life. If it's
>>to be a real community, it should have the power to determine its own
>>future, independent of me personally.
>>
>>Tax exemption has little to do with anything, really. In fact, if the
>>free speech issues above turn out to be a serious problem, becoming a
>>co-op is a backup choice. With properly written bylaws, this would
>>provide all of the organizational benefits above, without any red tape
>>or government hassle. For a few reasons, it's my second choice, but if
>>necessary it is what we'll do.
>>
>>> Or to put it another way: I've seen many people/organizations state
>>> "We're going to become a non-profit". To date, none of them have
>>> actually done so.
>>
>>I've seen a lot of people start web communities, too, and most of them
>>fail. That doesn't mean a thing. I'm serious about this. but as I've
>>said on the site, come back in a few months and judge my actions for
>>themselves.
>>
>>
>>--R
>>--
>>Rusty Foster :: rusty@kuro5hin.org :: http://www.kuro5hin.org
>>Advertise smarter: http://www.kuro5hin.org/submitad
>>
>>You want your name to evoke dread long after you are deceased, not
>>merely mocking repugnance once you are finally caught and locked away.
>> --qpt
>>
>>
>>--__--__--
>>
>>
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>>
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>
>--
>We refuse to buy the right not to die of hunger by running the risk of
>dying of boredom.
>Student Slogan, Paris, 1968
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