Advice on non-profit status

alasdairm

alasdairm

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hello
i need some advice.
i'm part of a burning man theme camp. year to year, the camp is made up of about 35-50 individuals mostly in the bay area. the main focus of our activities is attending burning man as a theme camp each year. you can read more about what we do at http://www.magicglasses.com and, perhaps more usefully, you can see some pictures of our set-up from various years at http://www.magicglasses.com/pictures/
briefly, we set up an an interactive art installation which is a 40' tunnel full of xmas tree lights. we also have a dome which serves as a shelter and place to hang out during the day, at night we have a small sound system (4 speakers, 2 subs) and we play dance music. the dome serves as the dance area.
the camp is essentially self-funding with the individual members contributing the costs associated with transporting of all the equipment and supplies to the desert. over the years, we've built up a supply of equipment from which we build the camp: pvc tubing for the tunnel, steel members from which the dome is constructed, generators to provide power, water barrels in which we transport communal water, power cables, lights and the soundsystem itself. the equipment was paid for from the communal contributions and is 'owned', therefore, by the group.
up until now, the amount cash involved has been relatively small - perhaps $5000 split across 35-50 people. however, we're likely to be handling larger amounts of money - e.g. from fundraising parties - and we're finding that it might be nice to decouple the finances of the 'camp' and the finances of the individuals involved in camp.
so the problem is this. magicglasses camp doesn't really exist as a legal entity. so we'd like to set up some kind of formal company (for want of a better term) to manage things better. i've heard a couple of people suggest setting up a charitable organisation under IRC Section 501(c)(3) and also a social club under IRC Section 501(c)(7) but i really have little experience of this.
can anybody here give some advice?
thanks and regards
alasdair
 
and we're finding that it might be nice to decouple the finances of the 'camp' and the finances of the individuals involved in camp.
Are you thinking in terms of liability or for fundraising purposes only? You do need to set up some sort of entity (probably a corporation). It's not that hard but before I can give much in the way of advice, I need to know what your goals are. Are you looking to raise funds only or also to protect individuals from liability? Nolo press has probably one of the best do it yourself books out.
http://www.nolo.com/lawstore/products/product.cfm/ObjectID/5C6811EB-C2B2-414C-B126D98C0F5364B4
Check out that book, and if you have any specific quesitons get back to me. That's the national edition, there are also state by state editions.
[ 25 February 2003: Message edited by: DrGonzoESQ ]
 
Hey alasdairm, I don't have any advice, but I wanted to say that what you're doing is really cool, nice job.
 
Originally posted by DrGonzoESQ:
Are you thinking in terms of liability or for fundraising purposes only? You do need to set up some sort of entity (probably a corporation). It's not that hard but before I can give much in the way of advice, I need to know what your goals are. Are you looking to raise funds only or also to protect individuals from liability?[/QB]
the discussion arose mostly because we're starting to handle more money. a fundraising party would probably result in around $8k passing through our hands. we want to ensure that we're 'doing the right thing' tax wise - at the moment, the only option we have is to have that moeny sitting in one (or more) bank accounts of individuals involved. in the case of an audit, things may get tricky ("where did this money come from...)
i had not thought about the liability angle but we need to investigate that also.
thanks for the NOLO pointer - seems like a great resource.
alasdair
Click to expand...
 
A corporate entity would protect your individuals from liability should some one do something stupid and get hurt. I'm sure Burning Man has insurance,but doubt you'd be covered. That's one of the reasons I recomend the corporate entity. Plus once you establish that entity it can have it's OWN bank account. The whole thing will cost you less than $300 to set up with the nolo book.
 
Corporations (INC) dont give all individuals immunity- that is why the LLC (Limited Liability)is so popular now. Basically, if the company goes bankrupt, they cant confiscate your home or somesuch- someone or multiple someones DO have to sign the papers you know.
Screw the book. (no offense gonzo!) Go to your town clerk or chamber of commerce and get the forms for a Non-Profit, everything you need to know, the clerk knows. The fees are usually between 90 and 120$. Incorporating on the advice of a third party usually tries to steer you to a thrid-party incoporating company, and they will charge you at least $300 usually. I got my papers in 7 days straight from the clerk. You may have to file a fictitious name as well, thats usually about $50.
 
thanks you. i think creating the legal entity is straightforward (this is the US of A after all).
i think i need to do some more reading on tax status at this stage. thanks so much for all the help.
alasdair
 
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