Subject:
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Re: Organizational business for ldraw.org as pertains to future activities
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Newsgroups:
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lugnet.cad.dev.org.ldraw
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Date:
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Tue, 13 Jun 2000 21:25:08 GMT
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In lugnet.cad.dev.org.ldraw, Shiri Dori writes:
> Reading through the types of charity that the document is referring to, it
> seems that ldraw.org could be considered either as a private org, or a
> charitable org. Certainly not any of the others, AFAIK. It seems viable to say
> that ldraw is not a private org, so I looked a bit more into "charitable".
>
> From the requirements for charitable orgs [2]:
> "The term charitable is used in its generally accepted legal sense and
> includes [...] advancement of education or science"
> "In addition, assets of an organization must be permanently dedicated to an
> exempt purpose."
>
> So the things to consider would be: can ldraw be considered as educational?
In a sense, I would say it is.
> Does it even *have* an exempt purpose?
Debatable. It would be wise to talk to a financial person about these
issues. Someone in Lugnet, or I have a friend who used to do financial stuff
who said there's someone I can be referred to. I can try to get some pro bono
advice if at all possible and necessary.
> Another thing that was mentioned was that in order to file a request for tax-
> exemption, a copy of the Articles of Organization must be included. So... you
> want to have that figured out as well.
Yep. I talked to my friend when I was faxing stuff in to X to verify my
identity for an account (more group work :) - had to go over to church to do
it cause I don't have fax software) He's an associate pastor who used to work
as a financial advisor or some bank dude, so he gave me some pointers. I was
told that you need to file as a corporation, and then file for tax exempt
status (exempt status isn't given to an individual). The accounts can be in
the name of the corporation as well. This process may take a while.
> To make a long story short, if ldraw.org has nothing to do with politics, and
> it is operating for one of these purposes {religious, charitable, scientific,
> testing for public safety, literary, or educational purposes, or to foster
> amateur sports competition, or for the prevention of cruelty to children or
> animals}, it can be exempt from tax.
> Some of these purposes obviously have nothing to do with ldraw.org. Others
> might. Mostly I'm talking about educational purposes.
>
> To reiterate, the things to consider now would be:
> =Can ldraw.org be considered as educational?
Yes. Its uses in the educational field are obvious, though to my knowledge it
has not been used. Not for lack of trying though, I approached higher-ups at
First Lego League, probably just need more time to talk to them. MIT probably
uses it as well...Suz? Fred?
> =Does it have a (different) exempt purpose?
Not particularly. Just collecting donations for non-profit demonstrations and
possible educational conventions on its uses.
> =Writing a rough draft of the Articles of Organization
Something to look into.
Here's how I see the whole tax status thingie. We can either:
File for a corporation and tax exempt status. This will most likely delay the
ability to distribut the CD, because any sales made before tax exempt status
is granted will be taxed. There will be a lot of organizing needing to take
place. The downside here is the CDs are delayed, but we'd get more $$ to play
with in the long run if successful for future stuff.
Not file for tax exempt status. This means that we would need to be taxed on
all income to the group from the CD sales. I could handle the funds myself,
and count them with my own tax filing for 2000 [1], and keep the group money
separate (and give a report of how much we've earned for accountability). The
downside of this is the group would have less money to do things with (promos
at events, .datfest, etc), but we would get the CDs out sooner.
[1] This would increase my tax bracket as well, cause I'm probably going to
make less than $10,000 this year. This will result in less income for both
myself and for the group.
Something to think about. Discussion? Vote?
-Tim
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