Editing Structure and organization (section)

== Formalizing our structure ==
It seems that if we are going to accept money and rent property we are going to have to formalize our structure somehow. Maybe we should look at the pros and cons of some of these options. Also by incorporating in some fashion we reduce the liability each of us faces for being associated with the group.
=== 501(c)(3) ===
501(c)(3) is an IRS-bestowed federal tax-exempt status for non-profit organizations.  [[501(c)(3) process|A separate page exists]] to discuss how to go about getting that tax-exempt status.
[http://www.irs.gov/publications/p557/ch03.html IRS Publication 557]

===== Steps via Mike S. =====

* Decide who the board of directors is (these are the people who have responsibility for fiscal oversight of the corporation)

* Come up with an appropriate mission statement (you need this for the paperwork to come, plus it's obviously a good idea to get everyone on the same page about what you're trying to do)

* Decide who the officers are (President, VP, Treasurer, Secretary) -- make sure the Treasurer is someone who is good at bookkeeping, can run Quickbooks or the like without screwing things up

* File incorporation papers with the state of Maryland

* File 501(c)3 application with the IRS (pretty time consuming but worth it)

* In a few months you'll get a letter back from the IRS authorizing you to be a nonprofit for five years

* At the end of five years you have to prove that you are really a charitable organization (they have a few tests they apply to your financial records)

==== Pros ====
* Donations can be deducted from taxes.
* Don't have to pay federal taxes.
==== Cons ====
*Process takes awhile (IANAL, but I understand you need to be operating for a year before you can apply)

=== Incorporation===
We have to incorporate in some manner in order to get 501(c)(3) designation.  Maryland state forms available [http://www.dat.state.md.us/sdatweb/sdatforms.html#entity here].  Seems likely we will want to incorporate as a non-stock tax-exempt corporation.
* LLC structure is an alternative.  LLCs can obtain 501(c)3 status.

==== Pros ====
* Fast
==== Cons ====
* No tax benefits. (Not necessarily - may incorporate as a tax-exempt corporation.)

=== Fiscal Sponsorship from Fusion Group ===
The Fusion Group is a 501(3)(c) that acts as a [http://www.fusiongroup.org/fiscalsponsor_001.htm fiscal sponsor]. From their website, "Fiscal sponsorship offers a great advantage for those who are launching new endeavors, where the long-term viability of the project is yet to be determined.  Operating under a fiscal sponsor allows community leaders to begin programs and services for a trial or incubation period prior to deciding to file for independent incorporation." The [http://www.fusiongroup.org/application.htm application process] looks pretty straight forward and there are lots of other [http://www.fusiongroup.org/programs.html Baltimore-based groups] using their services, including the [http://www.redemmas.org/2640/ 2640 project].
==== Pros ====
* Easy application
* We can take tax exempt contributions, apply for certain grants
* We'd probably get some financial guidance and other resources from the Fusion Group
==== Cons ====
* We'll need to be accepted into their program, which is not guaranteed
* 5%-10% of grants and donations are paid to Fusion to cover their administrative costs
* Requires initial fee of $250 for five hours of Fusion consultation if application is approved

=== Potential Affiliation ===
* [http://www.artistcommunities.org/ Alliance of Artists Communities]
* [http://www.fracturedatlas.org/ Fractured Atlas]