[IMC-Process] Re: [Imc-finance] FYI: [P2PJ] K5
fundraising / 501(c)(3)
Anna
anna at mail.nadir.org
Tue Jul 16 08:48:09 2002
hi,
second try.
i'd really appreciate an answer to my question. i was actually serious
about not understanding the content of that email.
thanks
Anna
At 18:32 11.07.02 +0200, Anna wrote:
>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
>>>
>>>
>>>--__--__--
>>>
>>>
>>>_______________________________________________
>>>P2PJ mailing list
>>>P2PJ@lists.infoanarchy.org
>>>http://lists.infoanarchy.org/mailman/listinfo.cgi/p2pj
>>>
>>>http://www.infoanarchy.org - your source for p2p news
>>
>>--
>>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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