Re: non-profit status
From: Raines Cohen (rc3-coho-Lraines.com)
Date: Mon, 4 Jun 2007 11:10:38 -0700 (PDT)
Lynette -

Tax exempt 501(c)3 and similar statuses are granted to corporations based on IRS (and state) recognition of their public benefit purposes: social, educational, scientific, et cetera. One of the key tests for receiving (and maintaining) nonprofit status is that no particular individual, group, or corporation is benefiting from the tax exemption or deductibility of donations; another is that the activities are conducted in furtherance of their stated mission.

In the case of a particular cohousing project, the primary aim is for the benefit of the investor/members and the housing development corporation/LLC, so an organization primarily engaged in that activity (i.e. "selling units" in the crudest sense) would not normally qualify. Affordable housing developers have a public benefit associated with their activities and no individual gaining, so they are nonprofits. (Insert standard disclaimer here: IANAL = I Am Not A Lawyer. But my dad is and I grew up reading patent applications for entertainment, so maybe a little bit rubbed off ;-) ).

The Cohousing Association of the U.S. (Coho/US) is a nonprofit 501(c) 3 organization because its activities are primarily educational in nature: outreach, publishing, running a website, hosting workshops, and the like. It has been approached by various cohousing groups and professionals over the years interested in "borrowing" its nonprofit status for various local, individual-project-or-corporation ventures, but the board has not found a broad enough public benefit in these activities to feel it would be in the association's best interest to take them on. (Note: I retired from the Coho/US board last year, so I don't speak on its behalf)

Mid-Atlantic Cohousing (MAC) was set up, long ago, as a chapter of Coho/US, to be able to do things like reserve some library meeting rooms that, in some cities, only nonprofits can do, with membership tied to membership in the national (then called The Cohousing Network) but has conducted its own local educational (also: innovative, fun, valuable, powerful) activities without coordinating/ integrating closely with the national organization, and so is in the process of obtaining its own independent nonprofit status. The national board decided, from this experience, that it didn't have the capacity to coordinate closely enough to provide enough support of value to a local chapter, and so chose to encourage regional organization as an independent activity, in part out of concerns of liability and being held responsible for local actions... and also to foster independent grassroots leadership in the movement, building strength through local initiative, diversity of forms and decentralization.

As Rob mentions, NICA is another great example of a regional umbrella group with its own nonprofit status. I'll be going up to its summer retreat at the end of the month, this time held at Goodenough community. It draws much of its leadership from cohousing neighborhoods in the region, yet reaches out to the wider communities movement to learn from their experiences.

I'm doing some regional organizing in California and looking to use an existing nonprofit with a closely-enough-aligned mission as a "Fiscal Sponsor" so we can take advantage of these opportunities. We pay an existing nonprofit a small percentage of the regional group's income and get the immediate benefit of the nonprofit status (and typically some management and bookkeeping help and oversight), to get the benefit of nonprofit status (and accomplish activities). The key is keeping it all in balance -- while your group's goals are (understandably) attracting members and selling units, the nonprofit status of the parent group could be threatened if the activities (on which all nonprofits have to annually report) are seen as too linked to your "commercial" venture. General education about cohousing that sends people to a regional nonprofit site that lists your events and activities among others might mean you can't push your key message as strongly as you might like -- but if it gets bodies in the door and people who "get it" about cohousing to join your group, isn't that what matters in the long run?

You might be able to find such a sponsor group in your area -- but let's talk, it may be that the path we're on is exactly aligned with what you're looking for.

Raines

Cohousing Coach, Planning for Sustainable Communities ; Regional Organizer, Northern California Cohousing; Certified Senior Cohousing Facilitator ; Certified Green Business ; Certified Green Building Professional; Member, Build It Green ; Studying Open Space Technology, Dynamic Facilitation, Classic Consensus, Aging In Community, guerilla marketing, and feasibility assessments

Watching cats watch each other at Berkeley (CA) Cohousing, where I borrowed one neighbor's extension ladder and another neighbor's truck during the brief time the other neighbor's truck was back around and not in use last night after common dinner to go help another neighbor move one nonprofit out of another nonprofit's office and into another nonprofit's classroom where they might get used, and got to see a still-living-and-hatching beehive relocated from under the eaves of yet another neighbor's house. And arranging this while getting a visiting cohousing developer from St. Louis and his son to help with the dishes!

Who yesterday visited an open house (with an affordable rent-to-own 2BR unit available) at Mariposa Grove Cohousing (Oakland, CA), caught the tail end of a North Oakland Cohousing meeting (and absorbing the vibes of a group in that particular phase of creation, up for planning approval shortly), and said a fond farewell to my former Swan's Market Cohousing (Oakland, CA) neighbors who are moving to Nyland Cohousing! (Lafayette, CO). Maybe it's time to write that Cohousing Magazine article about people who have lived in more than one cohousing community... there's starting to be a lot of us now! Even though Katie accused me of "recycling cohousers" when I did it. ;-)


On Jun 4, 2007, at 10:08 AM, Lynette Bassman of Fresno (CA) Cohousing wrote:

Has anybody had any experience with a cohousing group qualifying for
non-profit status? We are a group in formation (starting construction next
month, with openings for more members) and have had to pass up several
opportunities for substantially lower rates for ads on radio and in print that are available to non-profits. Also, we have been unable to qualify for
public service announcements on TV and radio when we have had special
events. It's probably wishful thinking, but I'd just like to know if there
is any precedent out there.


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