[Ubuntu-US] NFP Talk

[Richard A. Johnson]

OK, I have sat back here to listen to everyones ideas and visions of having a 
not-for-profit setup for their LoCo. It seems there are 2 glaring reasons for 
this:
1) Donations (ie. tax write-offs)
2) Liability coverage

Don't want to burst a bubble, but an NFP does not and will not provide any 
type of liability coverage. Each member of the NFP, of which is listed in 
the "Articles of Incorporation" and any addendums  to such, will still be 
liable. The only thing you will get with an NFP is the ability for accepting 
donations from companies or persons who want to write such donation off on 
their taxes.

So what exactly does it take to receive NFP or 501(c)(3) status?
1) Articles of Incorporation (AoI)
2) Filing more paperwork with the IRS than you could ever imagine. Are you red 
flagged by the IRS yet (you know what I am talking about Bordy)? If not, well 
get ready to be red flagged. Every year you file taxes, don't expect your 
rapid deposit, as you will be flagged and audited yearly. This usually occurs 
up the point to where your annual income is greater than the limits imposed 
by the IRS.
3) Everyone who is going to be a direct member listed in the AoI, be prepared 
to turn over your very own personal finances and access to your banking 
records to the IRS (man I hate them people).
4) Lawyers, more lawyers, an accountant who won't shred the papers (ya I am 
pointing at you bordy, I know you and the Enron deal).
5) If your NFP violates any statute set forth by the IRS, each and every 
member on the AoI will received the same exact punishment. So say the IRS 
comes at you for $1,000 (which is definitely on the low side), be prepared to 
pay your portion equally.

I think that about covers it, except for the initial fees. Plus, if your NFP 
was to receive less than what the IRS statute calls for, you won't get a 501
(c)(3) status at all. Another thing if I remember correctly, is that an NFP, 
which is nothing more than a public charity that provides a wide variety of 
services not specific to just a few people. This was the reason that my main 
MBA project at Kellogg was shot down. My initial plan was to make "Ubuntu 
Chicago" a NFP. My professors told me I had no chance with the project, and 
me being hard headed and stubborn, went to the local offices to file my 
petitions and paperwork ($700 out of my pocket), just to be told not even 4 
days later, that my paperwork would not even be forwarded to the governing 
parties as the NFP did not meet any of the guidelines set forth.

I just want to inform you, not shoot down your ideas, your visions, or any 
goals that you may have. I don't want to see someone try to do this, only to 
file the paperwork and lose their money in the process. I was lucky with 
$700, you may not be so lucky. The only way you can get the liability you 
seek is to create nothing less than an LLC (Limited Liability Corporation). 
The cost of setting up an LLC (except for those of you in Connecticut) is 
atrocious. And the only way to setup an LLC would be to separate yourselves 
from the Ubuntu trademark.

-- 
Richard A. Johnson
nixternal at ubuntu.com
GPG Key: 0x2E2C0124
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