501(c)(3) Group Exemption

Showing 21-41 of 41 messages
501(c)(3) Group Exemption Leah Silen 8/15/12 3:21 PM
I'm working on the NumFOCUS 501(c)(3) application and as well as applying for our own tax exempt status, we are able to apply for a Group Exemption.  This is where the IRS recognizes a group of organizations as tax exempt if they are affiliated with a central organization.  This avoids the need for each to apply for their own 501(c)(3) exemption, which as you may know is a very lengthy process.  A group letter has the same effect as an individual exemption letter. 

We need to know who would be interested in being a subordinate organization under NumFOCUS.  This requires your group to have an EIN number, an identification number the IRS uses for businesses and nonprofits.  Having an EIN number does not mean you have to have employees. It's easy to get one online.

Let me know if you need more information.

Leah
Re: 501(c)(3) Group Exemption ellisonbg 8/16/12 10:17 AM
Leah,

The IPython project is potentially interested in being a subordinate
organization.  We would love to get more information on what is
involved with this.

Cheers,

Brian
--
Brian E. Granger
Cal Poly State University, San Luis Obispo
bgra...@calpoly.edu and elli...@gmail.com
Re: 501(c)(3) Group Exemption Ondřej Čertík 8/16/12 11:43 AM
On Thu, Aug 16, 2012 at 10:17 AM, Brian Granger <elli...@gmail.com> wrote:
> Leah,
>
> The IPython project is potentially interested in being a subordinate
> organization.  We would love to get more information on what is
> involved with this.

The same with SymPy. What is a difference between "subordinate organization"
and just accepting donations/money through NumFOCUS, and have some
"sympy" account there?

Ondrej
Re: 501(c)(3) Group Exemption Leah Silen 8/16/12 12:56 PM
Hi Brian,

It's great to hear of IPython's interest, you were on our list of possible subordinate organizations.  NumFOCUS has to include in our request; your organization's/project's name, your EIN, mailing address, written authorization that IPython has authorized NumFOCUS to be a central organization under which it is a subordinate, a copy of the Articles of Association showing the date it was adopted by IPython and signed by two "officers" (I'll give you this document, which simply states that your purpose is aligned with the exempt purposes of NumFocus according to the IRC, Internal Revenue Code 501(c)(3), it is totally separate from any bylaws or documentation IPython might already have), a detailed description of the purposes and activities of IPython including the sources of receipts and the nature of expenditures, and an affirmation by a principal officer that, to the best of their knowledge, the purposes and activities of IPython are set forth in the Articles of Association and your description provided(I can provide a sample document for this).

After the IRS grants the exemption, NumFOCUS would be responsible for ensuring that you continue to qualify to be exempt.  A group exemption letter does not change the filing requirements for exempt organizations. The central organization and the subordinates must file Forms 990 (or 990-EZ), unless they meet a filing exception. If it is required to file an annual return, the central organization must file its own separate return but may also file a group return on behalf of some or all of its subordinates.

There's actually more work for NumFOCUS than on your end.  You really would function as your own 501(c)(3), just under our group exemption.

I hope that answers some of your questions.

Have a good one,

Leah
Re: 501(c)(3) Group Exemption Leah Silen 8/16/12 3:40 PM
Hi Ondrej,

I hope the information I gave to Brian is helpful for SymPy as well.  With the group exemption, SymPy would act as if it had it's own 501(c)(3).  Donations made to SymPy would be tax exempt without having to go through NumFOCUS.  As an open-source organization or project grows, this would be the next step.

In the near future, NumFOCUS will start funding organizations/projects, and individuals through our grant programs.  Subordinates can of course, apply for this funding.

We are here to promote and support projects like SymPy, by doing the work of obtaining the group exemption, we hope to make receiving donations easier.


Leah
Re: 501(c)(3) Group Exemption ellisonbg 8/26/12 10:34 PM
Leah,

What is the time frame for getting this together?  A few of us with
IPython are offline for a few weeks, but we don't want to miss out on
this opportunity.

Cheers,

Brian
Re: 501(c)(3) Group Exemption Leah Silen 8/28/12 11:27 AM
Hi Brian,

Unfortunately, we're under a huge time crunch to get our 501(c)(3) application in and it's best if we can apply for the group exemption at the same time.  You would need to get your EIN immediately.  You can apply by phone, 1-800-829-4933, supposedly, it only takes about 10 minutes if you have looked at form SS-4 (http://www.irs.gov/pub/irs-pdf/fss4.pdf) and know your answers.  I read that it's best to call from 8-8:15 or 9-9:15.  The only questions you may be unsure about are: 9a, Type of entity, you would be an "other nonprofit" and specify you're a charitable scientific organization; and 10, Reason for applying, you are needing your EIN to be included in a Group Exemption as a subordinate organization.  I can send you the other document that needs to be signed and I would also need a short detailed description of the purposes and activities of IPython including the sources of receipts and nature of expenditures by Monday.  Do you think this is possible? 

Leah
Re: 501(c)(3) Group Exemption Leah Silen 8/28/12 11:34 AM
Ondrej,

Will this work for SymPy?
Re: 501(c)(3) Group Exemption robertwb 8/28/12 1:21 PM
What are the advantages of being a subordinate organization, as
opposed to having people donate directly to NumFOCUS and receiving
funding through NumFOCUS grants? Can donations to NumFOCUS be
earmarked for a specific project? Thinking specifically in terms of
Cython, I don't think we have the need for a non-profit at this point,
but it might make sense in the future.

- Robert

On Wed, Aug 15, 2012 at 3:21 PM, Leah Holdridge <g...@numfocus.org> wrote:
Re: 501(c)(3) Group Exemption Ondřej Čertík 8/28/12 2:54 PM
On Tue, Aug 28, 2012 at 1:20 PM, Robert Bradshaw <robe...@gmail.com> wrote:
> What are the advantages of being a subordinate organization, as
> opposed to having people donate directly to NumFOCUS and receiving
> funding through NumFOCUS grants? Can donations to NumFOCUS be
> earmarked for a specific project? Thinking specifically in terms of
> Cython, I don't think we have the need for a non-profit at this point,
> but it might make sense in the future.

I have the same question as well. I am trying to figure out the best
way for SymPy.

Thanks,
Ondrej
Re: 501(c)(3) Group Exemption teoliphant 8/28/12 6:31 PM
Hi all,

If you are all thinking that it might make sense in the future to have a separate non-profit "status" (and you are in the U.S.), then please apply for an EIN *now* and help us with the NumFOCUS application.

The IRS does not like "ear-marks" as that is a way that funds have been inappropriately directed in the past to individuals.   As a result, such activity raises red-flags for them.  

This "group-exemption" is the way forward and allows you to receive funds directly using the NumFOCUS 501(c)(3) status.  It will ultimately help us quite a bit in the future, I think, as a community.

So, if you are considering receiving money directly for your project at all for the future, please take a few minutes and apply for an EIN number by phone as soon as you can --- using Leah's instructions.    Leah has researched extensively to figure out the easiest way to do this and it shouldn't take long.   It's also nearly zero-risk.   You just have to file one-page a year --- if we have your EIN number at NumFOCUS we can help you file it if you like.

We are trying to get our application into the IRS by the end of the week if at all possible, and having the Group-exemption filled out will help us.  

Thank you everyone.


-Travis
Re: 501(c)(3) Group Exemption robertwb 8/28/12 10:17 PM
On Tue, Aug 28, 2012 at 6:31 PM, Travis Oliphant <teoli...@gmail.com> wrote:
> Hi all,
>
> If you are all thinking that it might make sense in the future to have a separate non-profit "status" (and you are in the U.S.), then please apply for an EIN *now* and help us with the NumFOCUS application.
>
> The IRS does not like "ear-marks" as that is a way that funds have been inappropriately directed in the past to individuals.   As a result, such activity raises red-flags for them.
>
> This "group-exemption" is the way forward and allows you to receive funds directly using the NumFOCUS 501(c)(3) status.  It will ultimately help us quite a bit in the future, I think, as a community.
>
> So, if you are considering receiving money directly for your project at all for the future, please take a few minutes and apply for an EIN number by phone as soon as you can --- using Leah's instructions.    Leah has researched extensively to figure out the easiest way to do this and it shouldn't take long.   It's also nearly zero-risk.   You just have to file one-page a year --- if we have your EIN number at NumFOCUS we can help you file it if you like.
>
> We are trying to get our application into the IRS by the end of the week if at all possible, and having the Group-exemption filled out will help us.

Thanks for the explanation and encouragement. I think it makes sense
for us to do this. I'll try to get you paperwork for Cython by the end
of the week.

FYI, this was floated on sage-devel as well, but as Sage can already
can receive tax-deductible donations and receives (significant)
accounting and administrative support from University of Washington so
I didn't get the feeling there's interest in pursuing this at this
time (though it might not hurt to ping William directly if you think
it'd be worthwhile).

- Robert
Re: 501(c)(3) Group Exemption Ondřej Čertík 8/28/12 10:40 PM
Indeed, thanks for the explanation. I will try to get the paper work
done by the end of the week for SymPy as well.

Ondrej
Re: 501(c)(3) Group Exemption robertwb 8/28/12 11:07 PM
Thanks, Leah, for all the direction. Looking at SS-4, if they require
a address should I just give my home address (we don't have anything
more formal) or a common NumFOCUS one? Any preference for "Closing
month of accounting year" (if relevant)?

On Tue, Aug 28, 2012 at 11:27 AM, Leah Holdridge
Re: 501(c)(3) Group Exemption robertwb 8/29/12 8:49 AM
FWIW, http://www.irs.gov/businesses/small/article/0,,id=102767,00.html
is relatively painless (had my EIN in about 10 minutes) but you have
to act fast as it will be down for "annual power outage and electrical
upgrades" from tomorrow 'till the 4th. (Wow, imagine if Google went
offline for a week every time they did electrical upgrades...)
Re: 501(c)(3) Group Exemption ellisonbg 8/29/12 8:51 AM
Robert,

Thanks for the information, what did you use for:

* Entity name
* Address
* Closing month of year

Thanks,

Brian
Re: 501(c)(3) Group Exemption robertwb 8/29/12 8:54 AM
On Wed, Aug 29, 2012 at 8:51 AM, Brian Granger <elli...@gmail.com> wrote:
> Robert,
>
> Thanks for the information, what did you use for:
>
> * Entity name

Cython Foundation

> * Address

My home address.

> * Closing month of year

They didn't even ask me this.
Re: 501(c)(3) Group Exemption ellisonbg 8/29/12 8:55 AM
Great, thanks!
Re: 501(c)(3) Group Exemption Ondřej Čertík 8/29/12 9:43 AM
On Wed, Aug 29, 2012 at 8:54 AM, Robert Bradshaw <robe...@gmail.com> wrote:
> On Wed, Aug 29, 2012 at 8:51 AM, Brian Granger <elli...@gmail.com> wrote:
>> Robert,
>>
>> Thanks for the information, what did you use for:
>>
>> * Entity name
>
> Cython Foundation
>
>> * Address
>
> My home address.
>
>> * Closing month of year
>
> They didn't even ask me this.

Thanks, I just applied too for SymPy. I sent the information to Leah
in a private email.

Ondrej
Re: 501(c)(3) Group Exemption ellisonbg 8/29/12 10:30 AM
Leah,

I will get back to you with the information shortly.

Brian

On Tue, Aug 28, 2012 at 11:27 AM, Leah Holdridge
Re: 501(c)(3) Group Exemption Leah Silen 8/29/12 12:20 PM
This is great! Thank you all for getting the EIN's so quickly.  I'll get everything else to you in the next day or so.  If I can just get the short descriptions now. Ondrej, thanks for yours.

-Leah