Re: non-profit status
From: Sheilah Davidson (sdavidsonhvc.rr.com)
Date: Mon, 4 Jun 2007 12:23:04 -0700 (PDT)
I work for a non-profit and our accountant told us we weren't allowed to sell any of our assets to anybody.

----- Original Message ----- From: "Raines Cohen" <rc3-coho-L [at] raines.com>
To: "Cohousing-L" <cohousing-l [at] cohousing.org>
Sent: Monday, June 04, 2007 2:10 PM
Subject: Re: [C-L]_ non-profit status


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.

_________________________________________________________________
Cohousing-L mailing list -- Unsubscribe, archives and other info at:
http://www.cohousing.org/cohousing-L/



Results generated by Tiger Technologies Web hosting using MHonArc.