501(c)(4) Registration

[PJ Santos]

Hello Everyone - I hope you're enjoying the 4th of July!

I've done some research into the differences between a 501(c)(3) and a 501(c)(4), here are my main findings: 

• My understanding is we want to register as a non-profit so that we can "do" things as an organization, for example we found that booking (free) rooms at Tufts requires you to be a registered 501(c) organization. 
• The biggest advantage of a 501(c)(3) organization is that donations to it are tax deductible.
• I don't think we plan to ever raise or spend substantial amounts of money! My expectation for DSNC is for it to be a 100% volunteer effort focused on various forms of communication, outreach, advocacy, etc. that are more or less free. 
• Possible exceptions include:
• reserving spaces for meetings / elections that are not free
• doing some sort of mailer / outreach campaign
• hosting a community social / dinner 
• building a 30 ft tall solid gold statue of Elaine in the center of Davis Square (this may stretch the definition of a "social welfare organization")
• The biggest advantage of a 501(c)(4) organization is that we could advocate for political causes / there are fewer limitations on what we can say or do
• I don't really think we ever want to do this either! I imagine DSNC to be more like a public forum as opposed to a group that takes ideological political stances
• There is some gray area here - is approving of a community benefits agreement political? What about talking with city councilors about issues in Davis square we want resolved? 
• The other neighborhood councils have registered as 501(c)(3)s, and do this sort of advocacy. I heard from several members (thank you, Lee!) that they think some of the other neighborhood councils' activities might be stretching what is acceptable under that designation. I'm not a lawyer at all, but based on other organizations that are registered as 501(c)(3)s, I suspect the other neighborhood councils are OK... but  there's some level of risk there. 
• My handy consultant (thank you, Michael!) suggests that a 501(c)(4) is easier to file and maintain

Based on this comparison, I think I will recommend we pursue registering as a 501(c)(4). I don't think we plan to really use the primary benefits of either designation, but the 501(c)(4) seems like it has less risk and may be easier to manage. 

I believe the proper protocol is we vote to do this at the next meeting. However, I'm going to start working on figuring out all the forms / processes we need to register in the next week or so to move this along. If anyone objects, please speak now so I don't do a bunch of unnecessary work! 

Finally, we need a way to fund our filing fees. There's a catch-22, we need money to file the registration, but we can't raise money until we're registered! To get around this, typically a founder loans the money to the organization for the filing and gets reimbursed later. I'm happy to front the money, but I'd really like to not cover the whole bill! 

I'd like to propose soliciting pledges from DSNC members at our Sacco's night + the next meeting for donations after we successfully register. As we're planning on doing the 501(c)(4), those donations won't be tax deductible!

The general order of operations will be: (1) file the necessary paperwork with the state + the IRS (2) open a bank account (3) harass everyone who pledged money (4) reimburse me 

Enjoy the fireworks!

PJ Kim-Santos

[jlau...@comcast.net]

Thanks for all this work, PJ.  The fees for a c4 (ditto for a c3) are an initial intention-to-register fee of $50 for the IRS and $35 for Mass, followed by a $600 fee for the IRS and $600 for Mass to register, plus an additional $100 for the Mass AG to be authorized to raise money.  There is a $15 fee for annual filings in Mass.  In all,  $1400.   I'd like to pledge $100 towards the c4 set up costs for whenever you need it.

Lee

_________________
Josiah Lee Auspitz
17 Chapel Street 

Somerville, MA 02144 

Landline phone: 617-628-6228 fax: 617-628-9441

Phones do not receive text messages

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From: daviss...@googlegroups.com <daviss...@googlegroups.com> on behalf of PJ Santos <peej...@gmail.com>
Sent: Friday, July 4, 2025 2:22 PM
To: Davis Square Neighborhood Council <daviss...@googlegroups.com>
Subject: [DSNC] 501(c)(4) Registration

 

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Davis Square Neighborhood Council · https://DavisSquareNC.org · https://linktr.ee/DavisSquareNC
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[PJ Santos]

Thanks Lee!

One minor correction, I believe the large Massachusetts registration fee is $100. My crude estimate is we'll need a bit over $1000 for fees and starting our bank account.

I'll have a firmer estimate before our Saccos social, and I'll cap pledges at the estimate + a margin of safety 

[jlau...@comcast.net]

Thanks for the correction of the consolidated info I copied from Google AI rather than the official IRS and Mass sites individually.  A cautionary error. L

_________________
Josiah Lee Auspitz
17 Chapel Street 

Somerville, MA 02144 

Landline phone: 617-628-6228 fax: 617-628-9441

Phones do not receive text messages

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From: daviss...@googlegroups.com <daviss...@googlegroups.com> on behalf of PJ Santos <peej...@gmail.com>

Sent: Saturday, July 5, 2025 5:40 PM
To: jlau...@comcast.net <jlau...@comcast.net>
Cc: Davis Square Neighborhood Council <daviss...@googlegroups.com>
Subject: Re: [DSNC] 501(c)(4) Registration

 

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[Chris Lahey]

I don't understand why we would go our own path instead of following the path of the other NCs. I feel like "that's what everyone does" is pretty good risk mitigation at this level unless you have advice from a lawyer that we should do otherwise. 

  Chris

PS I am not a lawyer

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[rona twofisch.com]

PJ,

I appreciate the research and summary (even with the later commentary that you used an AI summary and not the IRS site).

The economic question is pretty simple -- It costs more to do C3 than C4. C3 allows tax-deductible donations.

The functional/mission questions is that C4 allows political action. My sense of this is that the bylaws already say we won’t be endorsing candidates. What political action might we want to do? Are there people who want to do that work and under what circumstances?

 

I wasn’t there when the question of endorsements came up. Was there more in that discussion that is relevant?

 

Rona

 

From: daviss...@googlegroups.com <daviss...@googlegroups.com> On Behalf Of PJ Santos
Sent: Friday, July 4, 2025 2:23 PM
To: Davis Square Neighborhood Council <daviss...@googlegroups.com>
Subject: [DSNC] 501(c)(4) Registration

 

Hello Everyone - I hope you're enjoying the 4th of July!

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[PJ Santos]

That's a fair point, and honestly what I initially thought. Here's why I changed my mind:

- I don't think we're going to use the "special features" of either designation, so this is a low-stakes decision 

- there's some marginal risk our activities stretch out of what's permitted under (c)(3), but no risk we run afoul of (c) (4). I'd hate for a CBA to get sunk because either a developer or some crank files a lawsuit claiming we're illegitimate

- perhaps most importantly, I've been advised the (c) (4) is easier to set up and maintain

That's enough for me to outweigh "do what everyone else is doing", but happy to hear other arguments. 

One other consideration, there's some stuff that's free for 501(c)(3)s, but not (c) (4)s. For instance, Google workspace has a free thing for one versus the other. 

Who was in communication with Tufts regarding the room reservation? We should confirm it's free for (c) (4)s!

[mem...@gmail.com]

Thanks to PJ, Michael, and Lee for your work and advice on this.

My initial inclination was to go with 501(c)(4), but it would be helpful to have access to meeting space at Tufts. PJ, could you please confirm that we could as a 501(c)(3) but not as a 501(c)(4)? Does anyone know if there is this type of requirement for other meeting spaces. 

Mary Ellen

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[PJ Santos]

Hi Rona,

To clarify, I've gotten my info from various "how to set up a nonprofit" sites + looking at some of the forms, the person I was speaking with had some incorrect information from one of the AI things. 

Regarding political endorsements of candidates, I feel pretty strongly we don't want to do that. I believe our bylaws say we won't. 

There's some concern that endorsing a CBA we negotiated or lobbying the city for changes in traffic patterns could overstep the (c) (3) boundaries. I'm not a lawyer, but I know other (c) (3)s such as the other neighborhood councils do similar activities, but there's no doubt a (c) (4) could do that. 

[PJ Santos]

Hi Mary Ellen,

Agreed, who was it that is in contact with Tufts / who's our point of contact there? Happy to reach out to them! 

[mem...@gmail.com]

I had the impression it was Elaine.

[rona twofisch.com]

Thank you. You’ve been doing the heavy lifting on this, with the other people who know about nonprofits.

 

Rona

[PJ Santos]

It's a team effort, I appreciate everyone's input! 

[Elaine Almquist]

I'm catching up on my emails, and I guffawed so loud when I read about the solid gold statue of me! Ha, you're hilarious. 🤣

Thank you for this thoughtful email, and I think the c4 is the right way to go, and collecting startup funds at the Sacco's night is the right way to go.

Best,

Elaine

Elaine F. Almquist

(she/her/hers)

BlueSky @EAlmquist  Instagram: @EFAlmquist
Phone: 978.375.2448

[mem...@gmail.com]

Hi Elaine,

There was a question about whether meeting spaces, like at Tufts, would be possible with the c4 vs. c3. Do you happen to know if this would be an issue?

Thanks!

Mary Ellen

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[Elaine Almquist]

I'm not sure, but this is a good question to talk through when we have an attorney to meet with.

Best,

Elaine

Elaine F. Almquist

(she/her/hers)

BlueSky @EAlmquist  Instagram: @EFAlmquist
Phone: 978.375.2448

[PJ Santos]

Hi Elaine,

Who's our tufts contact? We can ask them what their policy is for the room reservation. 

Best, 

Peter 

[Elaine Almquist]

Oh, this shouldn't be a problem for the upcoming event on Development because it's the Union Square 501c3 status we're using to book the room.

Best,

Elaine

Elaine F. Almquist

(she/her/hers)

BlueSky @EAlmquist  Instagram: @EFAlmquist
Phone: 978.375.2448

[mem...@gmail.com]

do you know what tufts requires? if you didn't speak with them, do you know who did?

[PJ Santos]

Hello Everyone, 

It was great seeing everybody tonight and meeting more neighbors. 

Additionally, I'd like to thank everyone for their generosity - we received pledges totalling $1085, which should be plenty to cover our nonprofit registration costs and populate our bank account (though we fell a few dollars short of being able to afford the 30 ft solid gold statue of Elaine). 

I'll see everyone at the next meeting, 

PJ Kim-Santos

[Cody Reichenstein]

The Tuft's site here suggests (c)(3) status is required: https://communityrelations.tufts.edu/community-programs/campus-space-requests

[Elaine Almquist]

Yes, Union Square Neighborhood Council is booking the room with us with their 501c3 since our organization doesn't legally exist yet. So we're all set.

E

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[mem...@gmail.com]

Hi Elaine, we've been discussing for future meetings, not just this one. In other words, would c3 provide benefits (such as meeting space) that c4 would not.

Mary Ellen

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[Elaine Almquist]

Ahh, thank you for the clarification, Mary Ellen.

Cheers,
Elaine

[Carol]

Can someone send me the bingo for Monday night meeting at Tufts?

Carol R

Sent from the all new AOL app for iOS

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[Carol]

Not bingo? Meeting at tufts.

Sent from the all new AOL app for iOS

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[PJ Santos]

That'll cover us for our upcoming meeting, but if only c3s are eligible, that'd strongly shift my calculus for what we should register as!

I reached out to them, I'll report back with what I learn. 

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[Marilyn]

For future needs, I called the tufts number to asked if a c4 registration would block us from the ability to book a room. They recommend sending an email so the supervisor can answer which I will do after I send this.

On Tue, Jul 15, 2025, 1:42 PM Cody Reichenstein <codysc...@gmail.com> wrote:

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[Eric Hoke]

Yes, tax-deductibility for donations and the various discounts/free meeting spaces available to c3s are big perks to that designation. 501c4 orgs are tax-exempt, like c3s, but they are not "charities" in the same sense, so they do not receive all of the same benefits. There are pros and cons to both designations, as has been discussed.

Having helped to manage the compliance of both types of orgs, I would agree with PJ that c4s are easier to manage, but as Mary Ellen is highlighting here, there are some real practical downsides.

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[jlau...@comcast.net]

 The neighborhood council's core purpose, as laid out in the City's ordinance, fits exactly the IRS's c-4 definition of a "civic league/social welfare organization."  It is a stretch, open to legal challenge,  to call it any of the relevant c-3 forms-- "public charity",  "private operating foundation" or "grant-making foundation."  

That seems to me to be the dispositive issue.   

Lee

_________________
Josiah Lee Auspitz
17 Chapel Street 

Somerville, MA 02144 

Landline phone: 617-628-6228 fax: 617-628-9441

Phones do not receive text messages

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From: daviss...@googlegroups.com <daviss...@googlegroups.com> on behalf of Eric Hoke <eric...@gmail.com>
Sent: Tuesday, July 15, 2025 2:24 PM
To: mem...@gmail.com <mem...@gmail.com>
Cc: Elaine Almquist <elaine....@gmail.com>; Cody Reichenstein <codysc...@gmail.com>; Davis Square Neighborhood Council <daviss...@googlegroups.com>

Subject: Re: [DSNC] 501(c)(4) Registration

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