Description
PROPOSAL
Description
This is a proposal for ProgCode to create an associated non-profit entity which will perform functions that are permissible for 501(c)(3) organizations.
Problem
The organizing of ProgCode in late-2016/early-2017 resulted in our current 501(c)(4) organization. However, the original organizers also considered the eventual founding of a 501(c)(3) entity through which much of the tech development, education, and public outreach can operate. Although fundraising under the c4 structure has enabled ProgCode to maintain basic services such as G-Suite, Heroku, Zapier, and Zoom Conference, donation levels are insufficient for ProgCode to hire operations or tech development staff. Few foundations provide grants to c4 organizations, and a recent grant application was unsuccessful in part because of ProgCode's c4 status.
Benefit
Most, if not all, of the community tech development, education, and public outreach could occur through a 501(c)(3) tax exempt entity.
- The c3 entity could qualify for grants - both public and private - which otherwise are unavailable to a c4 entity.
- Donations to a c3 are tax deductible, and so donors are more likely to donate to a c3.
- Fundraising is crucial to the ability of ProgCode to hire and/or contract for operations and tech staff to manage and sustain the community more effectively, thereby enabling ProgCode to fulfill its mission.
- Where grants are available to both c3 and c4 organizations, ProgCode also could benefit by the association between both entities.
- The c4 organization can remain as an place to engage in activities for which a c3 is not appropriate.
Plan
- Discuss and seek community consent to proceed at the 11-12-18 Community Operations meeting.
- Continue planning and discussions in the #legal channel, and discuss and seek community consent to implement at the 01-28-19 Community Operations meeting.
- If consent to implement is granted, the Board of Directors will pass a resolution authorizing the directors to create a 501(c)(3) entity and take all other actions necessary to obtain tax exempt status for the c3 organization, and further authorizing the payment by the ProgCode c4 entity of filing fees only.
- File articles of incorporation for the 501(c)(3) entity in the State of Michigan.
- Draft and adopt bylaws consistent with the 501(c)(3) purpose and the form of the c4 bylaws.
- File an IRS Form 1023 for the new c3 entity.
- Provide automatic membership in the 501(c)(3) entity to all current members in ProgCode, with opt-out.
- Transfer necessary assets from the c4 entity to the c3 entity, including the ProgCode Slack and current subscriptions and accounts.
- Create a new Slack for c4 members and operations.
- Create a process and protocols for evaluating projects and referring them from the c3 entity to the c4 entity, as necessary for regulatory compliance.
Decision Making
- Discuss and seek community consent to proceed at the 11-12-18 Community Operations meeting.
- Discuss and seek community consent to implement at the 01-28-19 Community Operations meeting.
Optional Information
Reference link(s)
Submit an application for tax-exempt status.
- The process is outlined generally on the IRS website.
- Form 1023
- Form 1023-EZ: Note: projected revenue must not exceed $50,000 in each of the first three years of operation.
- Standard Form 1023
- Form 1023 Instructions
- Change Process
Community Discussion History:
- 02.26.2017 - Issue 81 "Funding Framework"
- 05.15.2017 - Issue 198 "Four Pronged Test for Mission Alignment"
- 06.18.2018 - Issue 236 "Standard Change - Budget Expense Requests"
Additional information