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posted by NCommander on Wednesday May 21 2014, @10:30PM   Printer-friendly
from the working-on-the-bylaws dept.
For non-US folks: 501(c)(3) refers to tax-exempt status in the United States. Unlike most countries, non-for-profit organizations are NOT automatically tax-exempt, I've included a larger summary in the 'Read More' section.

So, on the slow but progressing front of incorporation, I've been working on drafting the bylaws for the umbrella non-for-profit for SoylentNews. Our current plan is to have all the documents ready for incorporation done in a single go, then involve a lawyer to review them to make sure that we meet all the requirements. Once that is done, I'll finalize my move to New Hampshire (which has gotten unfortunately sidetracked due to real life), and submit the documentation to the state.

When I took over this site, I said that we would incorporate and (eventually) become a 501(c)(3) tax-exempt organization. At the time, I had not dug into the specifics of what this would entail, and I've got some concerns that makes me wonder if 501(c)(3) is a good thing for our future. My biggest concern involves a prohibition that prevents 501(c)(3)'s from being involved with anything related to "political activity". While seemingly benign on the surface, this prohibition may create some difficulty for us.
What is 501(c)(3)

As I put in the summary, 501(c)(3) is a special status granted by the Internal Revenue Service that exempts non-for-profit organizations from most forms of tax. New Hampshire also grants tax-exempt status for any organization that receives this certification from the IRS.

The downside for 501(c)(3) is that in turn for being tax-exempt, the organization itself gives up some rights related to political representation. The specific term as used by the IRS is "political activity", a term which is extremely ambiguous and not defined by statute.

The Houston Business and Tax Journal ran a lengthy article on the subject called Eyes Wide Shut which goes into depth about the issues. I'll try and summarize that here, but I recommend that all take a look at it, and weigh in below.

In the Eyes Wide Shut article, it points to guidelines released by the IRS which outlined what is and isn't acceptable. This document provides examples of what is and is not acceptable behavior for 501(c)(3)'s. Two sections (reproduced below) are IMHO, most concerning.

Issue Advocacy vs. Political Campaign Intervention

Under federal tax law, section 501(c)(3) organizations may take positions on public policy issues, including issues that divide candidates in an election for public office. However, section 501(c)(3) organizations must avoid any issue advocacy that functions as political campaign intervention. Even if a statement does not expressly tell an audience to vote for or against a specific candidate, an organization delivering the statement is at risk of violating the political campaign intervention prohibition if there is any message favoring or opposing a candidate. A statement can identify a candidate not only by stating the candidate's name but also by other means such as showing a picture of the candidate, referring to political party affiliations, or other distinctive features of a candidate's platform or biography. All the facts and circumstances need to be considered to determine if the advocacy is political campaign intervention.

Key factors in determining whether a communication results in political campaign intervention include the following:

Ed Note: Snipped out a *very* long list

A communication is particularly at risk of political campaign intervention when it makes reference to candidates or voting in a specific upcoming election. Nevertheless, the communication must still be considered in context before arriving at any conclusions.

Web Sites
A web site is a form of communication. If an organization posts something on its web site that favors or opposes a candidate for public office, the organization will be treated the same as if it distributed printed material, oral statements, or broadcasts that favored or opposed a candidate.

An organization has control over whether it establishes a link to another site. When an organization establishes a link to another web site, the organization is responsible for the consequences of establishing and maintaining that link, even if the organization does not have control over the content of the linked site. Because the linked content may change over time, an organization may reduce the risk of political campaign intervention by monitoring the linked content and adjusting the links accordingly.

Links to candidate-related material, by themselves, do not necessarily constitute political campaign intervention. The IRS will take all the facts and circumstances into account when assessing whether a link produces that result. The facts and circumstances to be considered include, but are not limited to, the context for the link on the organization's web site, whether all candidates are represented, any exempt purpose served by offering the link, and the directness of the links between the organization's web site and the web page that contains material favoring or opposing a candidate for public office.

So What Does It All Mean?
So, after those two walls of text, you might be having issues in understanding what the above means?

In short, and this is my personal interpretation of both the statute, and various resources on the internet, we'd be hamstrung on our ability to report or discuss issues related to politics. I realize some of you may approve of this, but the prohibition would go farther than that. If a candidate for the house/senate/president is for/against an issue, (e.g. a new version of SOPA) it's not clear we could even post on it without our risking our 501(c)(3) status.

Secondly, I'm unsure if any lawyer will be able to give us clear advice on this subject. As the Eyes Wide Shut article details, the prohibition is vague, and short of having every single article lawyer vetted, we could easily run afoul of the prohibition without intending it.

As the "Eyes Wide Shut" article points out, the current test about political activity is simply "facts and circumstances", which means its subject to the interpretations of whatever court we're in (in this case, federal courts in the first circuit). Given we aggregate and summarize news, we may run afoul the ban based on the articles we post.

Here's the hypothetical scenario I can envision; at some point in the future, a congressman introduces legislation similar to SOPA. A major advocate of rights denounces both the legislation and the congressman who introduced it. We run an article about both the introduction of SOPA 2.0, and the denouncement. By happenstance, this is an election year, and the congressman is running for re-election.

By running these articles, are we running afoul of the political action ban? The IRS examples suggest that we'd be alright, but in other places appear somewhat contradictory. The intended purpose seems to prevent us, as a hypothetical 501(c)(3) from saying "Vote for X", or "Vote for X because ...", which would likely include any content vetted by the staff as a submission.

On the flip side of the coin, the Franklin Center for Government and Public Integrity, operates its own news service, State House News (down as of writing), and networks with several other journalistic agencies, which proves that its at least viable of being a 501(c)(3) news outlet.

As outlined by the IRS, there is a distinction between the members of a 501(c)(3) and the 501(c)(3) itself saying something. For instance, I can say "Vote for X because ..." as long as I'm not doing it in the name of the foundation. However, that distinction becomes murky, if I were to post a comment on an article saying the same thing.

The entire situation is nebulous at best; I'm currently drafting a letter to send to both the Franklin Center, and Freedom of Press Foundation in hope of finding advice and information on how to proceed

So Why Not Abandon Pursuit of 501(c)(3) All Together?

The answer is multi-fold. The first reason is very simple; its something I said we'd do, and I don't like to backtrack on a promise without explaining why and making sure the community understands; had I realized the full implications of 501(c)(3) status beforehand, I would have likely just said we'd be a non-for-profit and leave it at that.

Secondly, our ability to raise money is somewhat more difficult without this status. As of today, almost all the SN expenses are out of my personal pocket, and I'd like to move the site to a self-sufficiency model shortly after we're incorporated raising money via subscriptions and ads. As a 501(c)(3), I also envisioned the possibility of getting grants and donations from various corporations as charitable contributions are frequently used as tax writeoffs. Such status would also likely help us in getting discounts for various services, as well as allow donations/subscriptions to the site to be tax-deductible for our members.

The fact is, I'm concerned with our ability to self-support ourselves beyond hosting expenses even with advertising and subscription revenue coming in; the other site, despite all its traffic, was only generating approximately $18,000 per year before they were purchased by Andover; while such costs would allow us to pay for hosting, and perhaps a little contract work, being able to hire anyone part time or full time would essentially be out of the equation.

So Now What?

Right now, I'm pausing on my efforts to write bylaws and fill out the incorporation paperwork until I can get a clearer response. If it appears 501(c)(3) status would compromise us, or force us to self-censor, we will not pursue that status. I don't like to go back on what I've said previously, but I'm hoping, given the circumstances, the community can forgive me. Once I have my letters drafted, they will be posted as a journal article and I'll stick a link to that here.

Related Stories

What We Are Going To Be: The Manifesto 151 comments

You know, this is probably one of the hardest things I've had to write since we went live. My first few attempts just lead to writer's block and frustration, so I tried to take a different tack with this and do it the way I usually do my write-ups for anything; by the seat of my pants. The staff have poked and prodded my early attempts, and I think we're ready to open this up to everyone to add their two cents in as we work towards a final version.

Since we've gone live almost three months ago (yeash, time flies), we've already had our fair share of debates, strife, and conflict, yet at the end of the day we remain operational with an involved community that keeps growing day after day. As I continue my relocation to NH, we're getting scary close to the point we're going to need to start drafting the bylaws and operating principles for this site. One of the pressing questions that have been asked time and time again is, "What will we be?" I'm ready to give you that answer.

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  • (Score: 2) by Blackmoore on Wednesday May 21 2014, @10:35PM

    by Blackmoore (57) on Wednesday May 21 2014, @10:35PM (#46167) Journal

    at https://pressfreedomfoundation.org/ [pressfreed...dation.org] ?

    someone who could at least point us at someone who can help us through this tax morass

    • (Score: 2) by NCommander on Wednesday May 21 2014, @10:42PM

      by NCommander (2) Subscriber Badge <michael@casadevall.pro> on Wednesday May 21 2014, @10:42PM (#46169) Homepage Journal

      All they have is a Contact Us form, which is somewhat disappointing. The Franklin Center only has a snail mail address listed, so I'll post them a letter, and ask permission to put the responses publicly. I thought about contacting the EFF, but we're somewhat out of scope for them.

      --
      Still always moving
      • (Score: 0) by Anonymous Coward on Wednesday May 21 2014, @11:18PM

        by Anonymous Coward on Wednesday May 21 2014, @11:18PM (#46179)

        Considered a simple "whois pressfreedomfoundation.org"?

        Partial:

        Registrant ID:turJHeuFtl6ZUZCr
        Registrant Name:Privacy
        Registrant Organization:MyPrivacy.net
        Registrant Street: 304A-219 Dufferin St.
        Registrant City:Toronto
        Registrant State/Province:ON
        Registrant Postal Code:M6K3J1
        Registrant Country:CA
        Registrant Phone:+1.6474785997
        Registrant Phone Ext:
        Registrant Fax:
        Registrant Fax Ext:
        Registrant Email:pressfreedomfoundation.org@myprivacy.net
        Admin ID:turJHeuFtl6ZUZCr
        Admin Name:Privacy
        Admin Organization:MyPrivacy.net
        Admin Street: 304A-219 Dufferin St.
        Admin City:Toronto
        Admin State/Province:ON
        Admin Postal Code:M6K3J1
        Admin Country:CA
        Admin Phone:+1.6474785997
        Admin Phone Ext:
        Admin Fax:
        Admin Fax Ext:
        Admin Email:pressfreedomfoundation.org@myprivacy.net
        Tech ID:turJHeuFtl6ZUZCr
        Tech Name:Privacy
        Tech Organization:MyPrivacy.net
        Tech Street: 304A-219 Dufferin St.
        Tech City:Toronto
        Tech State/Province:ON
        Tech Postal Code:M6K3J1
        Tech Country:CA
        Tech Phone:+1.6474785997

        Not sure if purely non-US or registering in Canada for legal benefit of not filing the forms you mentioned but others. Of course the above does not necessarily mean they don't have US offices etc too or instead of. Anyway, the numbers/addresses may get you some references though.

      • (Score: 2) by Reziac on Thursday May 22 2014, @02:23AM

        by Reziac (2489) on Thursday May 22 2014, @02:23AM (#46232) Homepage

        How financially necessary is it to be tax-exempt and all that?

        I'm thinking the 'whoop, politics' aspect may be why I've heard of charities and foundations that operate under a charter but are not 501(c)(3). Presumably their charter lays out how income beyond operating expenses is to be portioned out.

        --
        And there is no Alkibiades to come back and save us from ourselves.
  • (Score: 5, Insightful) by frojack on Wednesday May 21 2014, @11:03PM

    by frojack (1554) on Wednesday May 21 2014, @11:03PM (#46172) Journal

    As long as the corporation itself doesn't decide to support a particular candidate, solicit donations for a candidate, etc, your statement on every story:

            The Fine Print: The following comments are owned by whoever posted them. We are not
                  responsible for them in any way.

    Plus, your About link clearly states:

    This is a news aggregation site that delivers what's important - articles about technology, science, and general interest. We also deliver all the functionality you expect from a good comment moderation system, and refine that system as we grow and learn.

    This is a community-driven project and can evolve based on the will of the users and volunteers.

    gives you an out. Even a Church or a Soup kitchen doesn't restrict the free speech of their volunteers, parishioners, or customers. You are providing a platform, a soap box, and nothing more.

    Should the submitted stories suddenly become nothing but endorsements of Candidate A, or Party B, you might have to exercise some digression, just as you would if someone submitted a hate based rant against some particular group in the guise of a story. Not every submitted story gets accepted. We all buy into that when we submit stories.

    You have the moderation system to take care of other stories that are hijacked into political diatribes. But by and large you don't censor any voices, and that works in your favor.

    Go look at some of the strictly political blogs that qualify for 501(c)(3) and you will see you have a lot of leeway.

    I think SN clearly qualifies, and should file for the exemption.

    --
    No, you are mistaken. I've always had this sig.
    • (Score: 2) by NCommander on Wednesday May 21 2014, @11:06PM

      by NCommander (2) Subscriber Badge <michael@casadevall.pro> on Wednesday May 21 2014, @11:06PM (#46175) Homepage Journal

      Agreed, and IRS itself does make it clear that there is a difference between the organization itself and the person speaking, but I rather not step on a landmine if we can avoid it. This has been bothering me a lot, hence the research going into it, and I rather not see us be in an ugly situation due to us stepping on a land mine.

      --
      Still always moving
      • (Score: 1) by goodie on Thursday May 22 2014, @12:47AM

        by goodie (1877) on Thursday May 22 2014, @12:47AM (#46198) Journal

        Is there any way to get in touch with some EFF-friendly lawyers who could help figure out this mess? I mean you have figured most of it out, but it could be nice to have a checkpoint from someone who knows all this stuff without paying a lawyer a fortune.

        On a sidenote, you are actually moving to NH because of SN's incorporation there? If so, I know guys who wouldn't do that for their girlfriends so kudos to you ;)

        • (Score: 2) by NCommander on Thursday May 22 2014, @06:15AM

          by NCommander (2) Subscriber Badge <michael@casadevall.pro> on Thursday May 22 2014, @06:15AM (#46275) Homepage Journal

          I am. In theory, I should have already done this, but life went pearshaped, so its delayed for at least a week or two.

          --
          Still always moving
          • (Score: 1) by goodie on Thursday May 22 2014, @08:18PM

            by goodie (1877) on Thursday May 22 2014, @08:18PM (#46517) Journal

            Well, like I said, congratulations. People in that side of the country are nice and laid back and there's some good micro brewing going on around there :)

    • (Score: 4, Insightful) by frojack on Wednesday May 21 2014, @11:15PM

      by frojack (1554) on Wednesday May 21 2014, @11:15PM (#46178) Journal

      After though to my own post....

      1) Given that the IRS has its collective tit in the wringer on this issue, they will error on the side of caution, and not be denying 501c3 just because there is potential for a political story to appear once in a while.

      2) Future audits (if any) are going to look at the preponderance of evidence, and not point to some comments here and there in a sea of stories and a mountain of comments.

      3) You have to deal in a serious pile of dollars before the IRS will even bother to take a look, and if that is the case, there will be money for lawyers.

      --
      No, you are mistaken. I've always had this sig.
      • (Score: 0) by Anonymous Coward on Thursday May 22 2014, @12:24AM

        by Anonymous Coward on Thursday May 22 2014, @12:24AM (#46193)

        That's how it seems to me as well: a middle area that will make them "a profit".
        If it's a billionaire who has an army of lawyers on retainer, it's probably not cost-effective to stir that hornet's nest.
        If the "offender" is a penny-ante operation, the cost won't be worth the gain there either.
        The latter might be a PR loss too, as mentioned.
        The guys who won with a narrow margin last time are playing the game cautiously these days.

        -- gewg_

    • (Score: 2) by Open4D on Thursday May 22 2014, @01:50PM

      by Open4D (371) on Thursday May 22 2014, @01:50PM (#46369) Journal

      Sounds sensible; tax-exemption looks a safe bet.

      But also, IMHO, don't sweat it if that turns out not to be the case, or not worth the risk, for whatever reason. I wouldn't really mind paying, say, an extra 30% for my subscription, due to tax. "Saving" $1 tax is no way near as important as saving $1 through genuine efficiency measures - becaue most tax goes towards things that benefit society.

      Also, I wonder whether it might be relatively easy to switch between exempt and non-exempt statuses. If so, that's another reason not to sweat it.

      • (Score: 2) by frojack on Thursday May 22 2014, @04:30PM

        by frojack (1554) on Thursday May 22 2014, @04:30PM (#46436) Journal

        You can opt out of 501c3 at any time. Its an exemption you are free to claim once certified, but it doesn't lock you in.

        I set up a computer training lab for a small business, and the guy who ran it just put himself on salary (at a fair rate) rather than trying to make a profit. However, he was so good at delivering courses that he soon had contracts from government agencies, and he decided to just drop the exemption and make a profit. He didn't have to change anything in his corporate structure, all he did was drop the exemption claim.

        Its not a lock in.

        --
        No, you are mistaken. I've always had this sig.
  • (Score: 2, Interesting) by Hannibal on Wednesday May 21 2014, @11:04PM

    by Hannibal (1589) on Wednesday May 21 2014, @11:04PM (#46173)

    It's probably important to take a serious reality check on the situation before jumping to any conclusions. It is clear that applying for the tax exemption is going to entail extra work and therefore has an element of cost, outside of the issues around self censorship. It would be helpful if the precise details of what fiscal benefits the status would bring beyond tax exemption; easier access to funding has been mentioned, but I think it's important that exactly what impact this status would have on funding is very clearly worked out. If a serious analysis shows that it is likely to have an only minor impact then the costs of time, effort and potential self censorship would hardly seem worth it. If, however, it is clear that the status will open up specific, named and valuable sources of funding then it is time to consider the impact of 501(c)(3) on SN activities. It seems to me that there is an over-abundance of caution here; there are existing bodies that serve a news function without having lost their status.

    In short? Will the status actually bring in more money? If not, then instead of trying to save costs focus some of that energy on generating revenue.

    • (Score: 3, Informative) by NCommander on Wednesday May 21 2014, @11:09PM

      by NCommander (2) Subscriber Badge <michael@casadevall.pro> on Wednesday May 21 2014, @11:09PM (#46176) Homepage Journal

      You've asked the tax equivelent of the hauling problem, and the answer is, I don't know. Being a 501(c)(3) helps us both with legitimacy, and with helping to fundraise, as several corporations donate to 501(c)(3)s to help their balance sheets, as well as allowing general fundraising by us solicating donations. As a NFP w/o 501(c)(3), our ability to freely fundraise is somewhat curtailed, and we'd be more dependent on reveune we can bring in ourselves via subscription, ads, or even perhaps monentizing the codebase itself.

      501(c)(3) is however what I said in the beginning what I wanted us to be, and if I'm going to go back on my word, I'm going to be damn clear on why I'm doing so and why.

      --
      Still always moving
      • (Score: 1) by Hannibal on Thursday May 22 2014, @10:22AM

        by Hannibal (1589) on Thursday May 22 2014, @10:22AM (#46310)

        I understand that not registering for exemption would lead to a greater reliance on other revenue generation. A question that springs to mind is that if SN registers, fails to generate income from the proposed sources (such as corporate donations, personal donations etc) and ends up relying on advertising, monetising code base etc does this generate an *additional* tax burden under unrelated business income tax? Or would this be taxed in the same way even if there was no specific registration?

        Having said that, as someone who has been on an executive of a reasonably sized not-for-profit (in the UK) and a trustee of that same organisation, I can see issues arising around ultra vires. On the other hand, if the exec are keen on registration then it's probably best go ahead and do it; they'll have more energy and drive to get those funds coming in :)

  • (Score: 5, Informative) by Appalbarry on Thursday May 22 2014, @01:00AM

    by Appalbarry (66) on Thursday May 22 2014, @01:00AM (#46202) Journal

    Seriously. I've got many years of non-profit work behind me in two countries.

    This is the kind of stuff that only a specialist lawyer can reliably advise you on. What you, as a lay person, read into the regulations, and what many others on the Internet think the rules mean, are seldom accurate.

    It's not enough to read the regs, you need to have an understanding of the century of case law that preceded them.

    My biggest concern involves a probation that prevents 501(c)(3)'s from involving with anything related to "political activity"

    I will though offer one comment that I feel is close to accurate: facilitating political discussion by other people is unlikely to fit the legal definition of "political activity."

    For example, if the Soylentils spend a day debating whether or not Mitch McConnell is an insufferable dickhead, you're OK. If you take money from the Soylent bank account and write a check to his challenger's election campaign, you're in big doodoo.

    • (Score: 4, Insightful) by Angry Jesus on Thursday May 22 2014, @02:24AM

      by Angry Jesus (182) on Thursday May 22 2014, @02:24AM (#46233)

      > This is the kind of stuff that only a specialist lawyer can reliably advise you on.

      I agree. Sad as it is, the legal system in the USA is the new church and without a priest to intercede for you, you've got a good chance of ending up in hell.

      Or more PC, you wouldn't expect a lawyer to do a good job of configuring a web server, you shouldn't expect to do a good job of configuring a legal entity.

  • (Score: 2) by ancientt on Thursday May 22 2014, @01:20AM

    by ancientt (40) <ancientt@yahoo.com> on Thursday May 22 2014, @01:20AM (#46213) Homepage Journal

    I love this site already and want to see it do well. I am willing to contribute to discussions, submit articles and when the time comes, I expect to subscribe for a reasonable fee. The value of the site is the community, the open source coding and the ability to be blunt when stating an opinion.

    I hope the site will be popular and I hope it will be profitable, and I think it is fair to say I love it, but I absolutely will abandon it if ceases to be a place where people can say what they mean.

    If there must be a choice between the site failing and the site censoring the ability to say what we mean, then let the site fail.

    --
    This post brought to you by Database Barbie
  • (Score: 1) by Thesis on Thursday May 22 2014, @01:26AM

    by Thesis (524) on Thursday May 22 2014, @01:26AM (#46216)

    I feel that you are jumping to far reaching conclusions without all the information. Many nonprofit organizations make carefully crafted statements about the political climate, or political situations. Look at this statement provided by the EFF about SOPA for an example:

    https://www.eff.org/deeplinks/2012/01/how-pipa-and -sopa-violate-white-house-principles-supporting-fr ee-speech [eff.org]

    The NRA is yet another example. It is easy to get a point across without saying "vote for this guy" so to speak. Talk to a lawyer before jumping to conclusions, and have them lay it all out in front of you. I still feel that this place being a nonprofit will be more benefit overall to everyone, members and non-members alike, IMHO.

    • (Score: 2) by Common Joe on Thursday May 22 2014, @04:23AM

      by Common Joe (33) <common.joe.0101NO@SPAMgmail.com> on Thursday May 22 2014, @04:23AM (#46252) Journal

      I may be putting words in NCommander's mouth, but I don't think NCommander wants to watch everything that comes out of his mouth. In fact, based on his past, he's a person who says what pops into his mind. It serves him well most of the time, but, on occasion, he regrets what he says later. Then the problem becomes "Is NCommander speaking as his own person or as SoylentNews the Entity?" He doesn't want what comes out of his mouth to affect the site.

      NCommander, run this by your lawyers: What if you (and everyone else who works for Soylent News)) put at the bottom of every message "These opinions are personal do not reflect the opinion of Soylent News" or some such statement like that? When you speak as Soylent News, you can do so in an "article" like this one. Just an idea.

      NCommander, another idea: What are the penalties if you are "busted"? You lose Tax Exempt status? Pay a $10 penalty? It may be worth to start out as a tax exempt status, and should the time come when some idiot comes along and says "They can't say that! They are tax exempt!", then just take it on the chin and go back to being for profit.

  • (Score: 4, Interesting) by bill_mcgonigle on Thursday May 22 2014, @02:26AM

    by bill_mcgonigle (1105) on Thursday May 22 2014, @02:26AM (#46234)

    You're not going to get a (c)(3) right off the bat anyway. You need to form a nonprofit first, then seek recognition by another (c)(3) and gain umbrella status with them, and then go out for it on your own after a couple years.

    I've formed a handful of NH nonprofits. You need 5 signatures and a set of bylaws. Look, just hit pause on this, get your move done, and if you need me to sign as a member I will. I probably have a set of bylaws you can easily modify that were already accepted by the NH Secretary of State - no need to reinvent all these wheels.

    • (Score: 3, Informative) by NCommander on Thursday May 22 2014, @04:32AM

      by NCommander (2) Subscriber Badge <michael@casadevall.pro> on Thursday May 22 2014, @04:32AM (#46254) Homepage Journal

      We've got volunteers for the signatures, but I'd love help with the bylaws, my problem is the RSA forums and the NH department of business website both say that if you're intending to go for 501(c)(3) stuff, you need to do additional things. If you have a template for bylaws, I'd love them; I've been workng from the NH Center for Non-profits templates, but its a bit tricky. THe one thing I remain unsure on is if the volunteers have to be in NH; the statue doesn't say anything, and neither does the site but ...

      I will take whatever help I can get with the bylaws though.

      --
      Still always moving
  • (Score: 3, Insightful) by quadrox on Thursday May 22 2014, @04:22AM

    by quadrox (315) on Thursday May 22 2014, @04:22AM (#46251)

    I am wondering how the EFF is handling this issue. They are providing opinions on both upcoming and existing legislation frequently , are they not tax exempt?

    Furthermore - as long as editors would only post links to existing articles and state facts without any opinion or commentary, shouldn't we/they be fine?

  • (Score: 3, Funny) by aristarchus on Thursday May 22 2014, @05:23AM

    by aristarchus (2645) on Thursday May 22 2014, @05:23AM (#46267) Journal

    My only experience with 501(c)(3)'s is that if the principal is an asshole, things will not go well. All it takes is for the board to deny an expense, and shit hits the fan, and there are traitors on the board, and Susie never really liked me, and now I am stuck in New Hamshire!! F**ing New Hampshire!!!! I could have incorporated in California! Or at least Colorado or Washington State. Well, anything is better than Wyoming! (Is there such a thing as a non-profit in Wyoming? Just asking!)

  • (Score: 3, Insightful) by hankwang on Thursday May 22 2014, @10:29AM

    by hankwang (100) on Thursday May 22 2014, @10:29AM (#46311) Homepage

    ...our ability to raise money is somewhat more difficult without this status. As of today, almost all the SN expenses are out of my personal pocket, and I'd like to move the site to a self-sufficiency model shortly after we're incorporated raising money via subscriptions and ads

    I don't quite get that. Being from The Netherlands (and not being a finance expert), I'm not completely familiar with the tax system in the US, but I would say that, if an organization is not tax-exempt, it only pays taxes on net profit (income) and VAT on the net difference between expenses and sales. If you run as a non-profit, with revenue and expenses (including salaries paid to staff) balanced, there is nothing left to be taxed.

    Only if the expenses are used to purchase long-term assets (servers etc.), those expenses could be counted towards the profit; in book-keeping terms, it's not an expense but rather swapping cash assets against non-monetary assets. The actual expenses occur in the form of the annual depreciations in the following years, which can then be counted as a net loss to offset the "profit" in the year of buying them.

    • (Score: 1) by Hannibal on Thursday May 22 2014, @12:59PM

      by Hannibal (1589) on Thursday May 22 2014, @12:59PM (#46349)

      "If you run as a non-profit, with revenue and expenses (including salaries paid to staff) balanced, there is nothing left to be taxed." - Running as a non-profit does not involve having no surplus, it involves not paying out dividends, unless I'm missing something?

      • (Score: 2) by hankwang on Thursday May 22 2014, @03:57PM

        by hankwang (100) on Thursday May 22 2014, @03:57PM (#46416) Homepage

        Running as a non-profit does not involve having no surplus, it involves not paying out dividends, unless I'm missing something?

        That is probably correct, but I am not sure that it is a good idea to turn this into "The SoylentNews Foundation" that may at some point be sitting on a large pile of money or be located in some marble-tiled office building. Of course, the other reasons, especially that other organizations can more easily donate, may hold, although I don't quite understand what kind of tax law is behind that.

    • (Score: 1) by Preston on Friday May 23 2014, @03:23AM

      by Preston (4) on Friday May 23 2014, @03:23AM (#46602)

      Yeah, I've been pushing hard for the 501(c)(3) since the start and have nagged about us not having an operating agreement/bylaws/etc.

      I didn't even think of the political speech thing, it really puts a hurt on it. Churches have been harmed because of this in the past. It really screws with the First Amendment. Corporations/Non Profits are people, so they should have freedom of speech regardless.

      However, as the parent says, maybe being for-profit but not having any, or little profit to be taxed wouldn't be so bad?

      Consulting with a tax pro and/or attorney is probably a must, but NCommander really seems to have an awesome grip on it just as he has with everything else thus far. Kudos and thank you for your time!!

  • (Score: 2, Interesting) by nadaou on Thursday May 22 2014, @12:28PM

    by nadaou (2929) on Thursday May 22 2014, @12:28PM (#46331)

    Consult with the good people at the SFLC. They are professional FLOSS tech lawyers who do this for a living, funded by us and working for us. Do it now.

    --
    ~ Forward in all directions ~
  • (Score: 0) by Anonymous Coward on Thursday May 22 2014, @12:29PM

    by Anonymous Coward on Thursday May 22 2014, @12:29PM (#46332)

    You STILL haven't contacted a lawyer? You're moving, and wasting all this time interpreting legal papers on your own, yet you still haven't picked-up the phone and gone to sit with a lawyer to get their perspective? That only takes a few hours. You don't need a supreme court justice, people go through this shit every day, you're not doing anything special or novel here, these are cookie-cutter questions you have. Contacting a lawyer should've been your FIRST step, not your first step after moving and wasting untold hours tramping through tons of legal documents.

    • (Score: 2) by NCommander on Thursday May 22 2014, @05:07PM

      by NCommander (2) Subscriber Badge <michael@casadevall.pro> on Thursday May 22 2014, @05:07PM (#46454) Homepage Journal

      I haven't moved yet. Given that up until I was involved in this site, I was living out of a backpack and wandering the world, moving for me is not exactly a hardship; if NH falls through, its mostly a matter of collecting my stuff and going somewhere else, not that hard.

      As for the lawyer bit, I'm trying to get everything assembled to present to a lawyer then doing it piecemeal.

      --
      Still always moving
      • (Score: 1) by oostertoaster on Thursday May 22 2014, @08:58PM

        by oostertoaster (3378) on Thursday May 22 2014, @08:58PM (#46532)

        That is what the lawyer is for: generating all of this paperwork for you, and advising you exactly what you need to fill out and submit to make this happen. The fact you haven't been in contact with a lawyer at all yet is a bit worrying to me. All of these questions wouldn't take very long for a lawyer to answer for you.

        I also find it hard to believe that being a 501(c)3 limits the political expression of members here. Organizations like the NRA are 501(c)3 exempt, and they aren't exactly apolitical.

        Please, contact a lawyer.

        • (Score: 2) by NCommander on Thursday May 22 2014, @10:21PM

          by NCommander (2) Subscriber Badge <michael@casadevall.pro> on Thursday May 22 2014, @10:21PM (#46552) Homepage Journal

          The difference is between issue advocacy and political advocacy; 503(c)(3)'s can advocate on an issue or rights, or something similar. Furthermore, the NRA is a 501(c)(4) PAC organization, which is explicate for groups dealing with politics, and is different than the 501(c)(3) certification that we'd be under; the NRA does have subsidiary 501(c)(3)'s, but there layout, the wikipedia page explains more: https://en.wikipedia.org/wiki/National_Rifle_Assoc iation [wikipedia.org]

          I intend to contact to lawyer, hopefully this week, but a lawyer's advice does not protect you if they're wrong, and the prohibition in this case is badly worded and extremely vague. I brought this article up to explain my concerns, and if we need to change direction, then I don't want the community to be blindsided by the change.

          Call it a personal quirk, but I don't like going back on my word, and if I do, I feel to explain why.

          --
          Still always moving
          • (Score: 1) by oostertoaster on Friday May 23 2014, @12:32AM

            by oostertoaster (3378) on Friday May 23 2014, @12:32AM (#46568)

            Thanks for correcting me about the NRA, the source I looked at was clearly wrong.

            I hope the tone of my comment wasn't misunderstood, I do appreciate the updates on this issue, and all the work you're putting into it. I was just trying to suggest (perhaps poorly) that a lawyer could help out with some of the research you've been doing. I've really enjoyed this site so far, and want it too succeed. I lurked at the other site for years, so you guys are clearly doing something right to get me more involved!

            • (Score: 2) by NCommander on Friday May 23 2014, @09:08PM

              by NCommander (2) Subscriber Badge <michael@casadevall.pro> on Friday May 23 2014, @09:08PM (#46903) Homepage Journal

              Appreicated. This has been a lot of stress for me, and I'm trying not to kill my own finances in legal fee and such so its mostly a matter of doing as much as I can before hand ,then having a lawyer check it all over and such.

              --
              Still always moving
  • (Score: 2) by elf on Thursday May 22 2014, @12:39PM

    by elf (64) on Thursday May 22 2014, @12:39PM (#46337)

    I agree on the laywer thing...but when reading the post I saw this

    "If an organization posts something on its web site that favors or opposes a candidate for public office"

    It specifically defines organisation as the one doing the posting to qualify for the regulation. You could argue (laywer needed) that people using the site aren't part of the organisation but are users of service the organisation provides, which is to post articles and discuss them. This website doesn't post it's own content or its own views.

    You will get good advice from good laywer...hope it all goes well...

  • (Score: 1) by Buck Feta on Thursday May 22 2014, @01:59PM

    by Buck Feta (958) on Thursday May 22 2014, @01:59PM (#46373) Journal

    >> Once that is done, I'll finalize my move to New Hampshire

    New Hampshire is a perfectly lovely place, but remind me again what your move there has to do with Soylent? You can live in your existing location (wherever that may be) and still run a New Hampshire business/501c3/organization.

    --
    - fractious political commentary goes here -
    • (Score: 2) by NCommander on Thursday May 22 2014, @05:09PM

      by NCommander (2) Subscriber Badge <michael@casadevall.pro> on Thursday May 22 2014, @05:09PM (#46456) Homepage Journal

      Easier to deal with state departments when you live locally. As I've said in other comments, I haven't had a fixed permament address since I started this site, so relocating to NH doesn't mean uprooting, just settling.

      --
      Still always moving
      • (Score: 1) by Buck Feta on Thursday May 22 2014, @07:09PM

        by Buck Feta (958) on Thursday May 22 2014, @07:09PM (#46489) Journal

        I see. Thanks for the reply.

        --
        - fractious political commentary goes here -
  • (Score: 2) by jackb_guppy on Thursday May 22 2014, @05:02PM

    by jackb_guppy (3560) on Thursday May 22 2014, @05:02PM (#46450)

    Look a LEAP-CF http://leap-cf.org/ [leap-cf.org]

    I was part of group that setup the character for the group many years ago. They are a LUG that has big following of users outside of Florida. An been living with the 501c3 collar for many years.

  • (Score: 2) by etherscythe on Thursday May 22 2014, @06:35PM

    by etherscythe (937) on Thursday May 22 2014, @06:35PM (#46481) Journal

    1) I don't know that anybody here is really set on 501(c)3 status specifically, despite it being talked about in formative stages. Say, don't we need a new poll?

    2) It would seem the political involvement prohibition might interfere with the "no topic is taboo" concept as seen in the current draft manifesto. If that's the case, it's probably best to nix that idea.

    --
    "Fake News: anything reported outside of my own personally chosen echo chamber"
  • (Score: 2) by urza9814 on Thursday May 22 2014, @06:59PM

    by urza9814 (3954) on Thursday May 22 2014, @06:59PM (#46483) Journal

    There are plenty of 501(c)(3) nonprofits that report political news. Democracy Now! for example reports nothing but politics and is 501(c)(3) registered. As you've indicated, it's very open to interpretation; but the general principles seem quite clear -- you can't advocate on behalf of a candidate. But this does not in any way prohibit writing a factual article about that candidate's stand on some issue. Proper objective journalism is not advocacy. Period.

    If you want to provide truly objective journalism, don't let these rules scare you away from filing for 501(c)(3) status. If that's all you're doing, there's not a judge in the country that would rule against you.

    On the other hand: there's a great Hunter Thompson quote that feels fitting here -- "Some will say that words like 'scum' and 'rotten' are wrong for objective journalism -- which is true, but they miss the point." The point being that sometimes being subjective is necessary. Sometimes you SHOULD call evil what it is. And if you want Soylent to be doing THAT kind of journalism (which I personally would love to see here -- albeit rarely, when needed), we should probably avoid 501(c)(3) status.

  • (Score: 2) by Reziac on Friday May 23 2014, @11:43AM

    by Reziac (2489) on Friday May 23 2014, @11:43AM (#46713) Homepage

    I don't recall where the bug report thing is so I'll leave this here:

    Today when I posted this comment,
    http://soylentnews.org/comments.pl?sid=1976&cid=46 712 [soylentnews.org]
    the first time I clicked submit, I got some error that I could not submit a comment to a journal that wasn't mine. I'm like, WTF? back button, click submit again, and this time it went.

    --
    And there is no Alkibiades to come back and save us from ourselves.