Organization

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Contents

Forming a Non-profit Corporation

Steps to Forming an NFP

Guide to forming a non-profit in NYS from NYS website: [1] http://www.dos.state.ny.us/corp/nfpguide.htm

Sample articles of organization with required 501(3)c inclusions: [2]http://www.irs.gov/charities/foundations/article/0,,id=141238,00.html

Responsibilities of an NFP in New York State

The existence of the corporation begins upon the filing of the Certificate of Incorporation with the Department of State. After the corporate existence has begun, an organization meeting of the initial directors designated in the Certificate of Incorporation must be held for the purpose of adopting by-laws, electing directors and the transaction of any other business. (See Section 405 of the Not-for-Profit Corporation Law.)

The corporation is required to keep correct and complete books and records of account and must keep minutes of the proceedings of its members, board of directors and executive committee, if any. The corporation must also keep a record containing the names and addresses of all members, the number of capital certificates held by each member and the dates when they respectively became the owners of record thereof. (See Section 621 of the Not-for-Profit Corporation Law.)

In addition, a meeting of members must be held annually for the election of directors and the transaction of other business on a date fixed by or under the by-laws. (See Section 603 of the Not-for-Profit Corporation Law.)

Not-for-profit corporations formed for charitable purposes may be required to register with the Office of the Attorney General, Charities Bureau, Registration Section, 120 Broadway, New York, NY 10271. The telephone number is (212) 416-8415. The website address is www.oag.state.ny.us.[3]

Applying for Tax Exempt 501(3)c Status (The Fun Part!)

Once we have filed the non-profit corporation, we can apply (within 15 months) for tax exempt status. the corp will be formed right away, but the tax exempt status will just take some time to put together all of the necessary paperwork and be approved. Other hackerspaces applying for tax exempt status are one of our best resources for obtaining 501(3)(c) status. [4] http://www.stayexempt.org/mini-courses/applyfortaxexempt/player.html

- More about applying for tax exempt status here (dumbed down): [5]http://www.irs.gov/pub/irs-pdf/p4220.pdf

- And here (very detailed) [6]http://www.irs.gov/publications/p557/

- Information on filing form 1023 to obtain tax exempt status: [7]http://www.irs.gov/instructions/i1023/index.html

Note: We can form the corporation and have up to 15 months to file for tax-exempt status. we do not have to wait to call ourselves tax-exempt, and as long as we get approved eventually, we can take donations and tell donors that our tax-exemption status is currently pending. any donations given would retroactively be tax exempt as long as we are approved.

Being approved as an "educational" organization

To be recognized as a 501(3)c organization, we must include in our purpose that we are "charitable", "educational", or "scientific." Existing hackerspaces we have spoke to usually choose all three terms in their statement of purpose. In NY, if we want to include educational in our purpose, we may need to get the approval of the dept of education. This would take 2 weeks minimum, and should be submitted before even filing for our corporation. If possible, I would like to try to double check with Resistor or Buffalo to find out if they include the term 'educational' in their organization's purpose, so that we can determine whether or not we want to include the term, and whether or not we need the 'consent of the commissioner' if we want to call ourselves 'educational.' (This is an area of non-profit law specific to NYS). The easy alternative is to call ourselves 'charitable' and 'scientific' only. http://www.counsel.nysed.gov/forms/ques.html#q1

Bylaws

Eric's 16 point process of creating a hackerspace

http://docs.google.com/View?id=dh6q5hc_3f9h338x9 -

  1. Business Plan
    1. Formulating Steps, procuring services of Lawyer/Accountant
    2. Mission Statement
    3. Assets/Financials, Budget/Income Projection
    4. Present offering uniquely –why us?
    5. Market evaluation, place in market niche
    6. Breakdown income source/potential
    7. Outline membership plan (# of members+$ per month =revenue generated)
    8. Sponsorships/Donations/Merchandise/Products etc.
    9. Define reasons for choosing to go non-profit
    10. Write up the plan
    11. Notarize and finalize
    12. Present to potential investors, banks, clients etc.
  2. Staff/Operators
    1. Identify what you need to run company as far as personnel
    2. Figure out who is available to you
    3. Assess suitability for various roles
    4. What can you offer them?
    5. What is their long term potential? Long term goals?
    6. Separate financial supporters vs. non-financial
    7. Define roles and place people in positions of merchandisers, teachers, lecturers, administrative, house staff etc.
  3. Acquire Non-Profit Status
    1. Get paperwork/legal counsel
    2. Obtain proper permits/licenses
    3. Get insurance (expand later on to cover equipment and possessions in the space)
    4. Submit file
    5. Follow up with whoever is handling case
  4. By-Laws
    1. Base off of the HackDC model
    2. Modify to suit new venture
    3. Have board sign off on them
  5. Budget
    1. Operating Costs
    2. Lease for space
    3. Permits and license fees/legal fees
    4. Equipment supplies/building materials
    5. Cost of setting up and maintaining web presence
    6. Advertising/Marketing
    7. Salaries for staff
    8. Auxiliary costs (utilities, basic supplies, insurance etc.)
  6. Monies
    1. Membership model
    2. Tier structure –Monthly/Yearly/Lifetime Model
    3. Sponsorships
    4. Donations
    5. Investors
    6. Merchandise Income
    7. Other potential income sources (Advertising revenue from online, affiliate donations etc.)
  7. Location
    1. What do you need/want? (Size, location, proximity to transportation, neighborhood affiliations etc.)
    2. How much can you reasonably afford?
    3. Explore lease-to-buy options
    4. Buildout potential of space
    5. Zoning/permits/operating rules and requirements of space –does it work?
    6. Is it accessible?
    7. Can it accommodate technology/upgrades/sound/heavy traffic etc?
  8. Layout
    1. Size
    2. Breakdown space into front/back, public/private areas
    3. Determine fixed/mutable spaces
    4. Coordinate with DIY people
    5. Consider what materials to use/maximum efficiency/safety issues
    6. Hypothesize future buildout –sketch rendering of space to that effect
    7. Determine overall motif and themes
  9. Web Presence
    1. Site/Personal email/Blog/Forum
    2. Memberships
    3. Maintenance
    4. Merchandise
    5. Online lectures/materials
    6. Links/Affiliates
    7. Advertising
  10. Equipment
    1. Basics for start-up
    2. In-house tools/materials
    3. Portable/moveable/off-site equipment/materials
    4. What is needed to facilitate the spaces being built? What can we reasonably provide, what will they need to provide for themselves?
    5. Possible Co-op of tools and such?
    6. Possibility of building new equipment and such on-site?
  11. Marketing/Advertising
    1. Identify markets/niche
    2. Show marketability
    3. Who are your members? Can they offer anything towards this end?
    4. Merchandise, in-house/affiliate-related
    5. Expand market –network!
    6. Have paid advertising on website?
  12. Members
    1. Getting them to join
    2. Getting them involved
    3. Physical/Financial presence
    4. Participation
    5. Volunteers
    6. Conventions/gatherings/parties etc.
    7. Feedback/Forum input
  13. Affiliates/Associates
    1. Among friends/current members
    2. Outside immediate network
    3. Networking within like organizations
    4. Approach alternative educational institutions for support?
    5. Link online with others
    6. Co-op
    7. Joint endeavors/group exercises/Inter-system challenges?
  14. Classroom Module
    1. What do you want to offer?
    2. Disciplines
    3. Teachers/Lecturers
    4. Participation model
    5. Materials
    6. Fees
    7. Online availability/streaming video/live feed
    8. Certification?
    9. Continuing the educational cycle (learn, teach, learn teach etc)
  15. Infrastructure Buildout
    1. Space to space linkage
    2. Global?
  16. Franchise/Model Branching
    1. Viability
    2. Desirability
    3. Resource capability
    4. Location(s)
    5. Venue-type expansion (i.e. club, workshop, warehouse, tech/science lab etc.)
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