Re: Filing the incorporation papers ourselves

On Fri, May 21, 2010 at 5:42 PM, Clark Robinson <robinsonchicago@gmail.com> wrote:

One fact I failed to include is that there is a fee for the IRS review of the 501(c) submission, in the $300 to 750 range.

I noticed that pro bono link on the Foundation Center website, too, but I forgot to circle back and look at it more closely later; I am glad you caught it.

LegalZoom will prepare the documents for the incorporation and the IRS review for fees that are reasonable, but they really just provide word processing, using our information, not actual legal work, such as the pro bono group would provide. It would be useful if we learn to do it ourselves, in case we want to form more corporations, for instance, if the media network needs to be incorporated, it probably should be separate from the charity. Also, we have not wrestled with Scott's question about an organization that may engage in lobbying. This issue came to me with particular force when I was reading M. Hasting's T/S post about the US-employed Iraqi's who we may leave behind (to be murdered); lobbying surely needed there, so we may also wish to think about multiple entities, at least long-term.

On Fri, May 21, 2010 at 2:09 PM, Scott Mintz <scott.w.mintz@gmail.com> wrote:
Clark,

Sorry for the delayed response. I've read everything you wrote and agree that this action should be done concurrently with our plans for a donor-advised fund.

With that said, I've done some searching and came across a link for pro bono legal services: http://foundationcenter.org/getstarted/faqs/html/probono.html (You may have already come across this and pointed it out. If so, I apologize). I can investigate these matters further and better when I have more time.

Also, I've looked into PNC as host for our donor-advised fund. While I have a phone call into a representative for confirmation of some items, the long story short is that this would not be a good fit for many reasons. On the other hand, Vanguard is a maybe. They offer similar services as Fidelity, but the intricacies are different i.e. minimum grants of $500. I'm currently working on a write-up for them and will email it as soon as possible.

Scott

On Thu, May 20, 2010 at 8:24 PM, Barrett Brown <barriticus@gmail.com> wrote:

I agree with all the reasoning expressed here and will defer to your judgment on these sorts of issues.

On Thu, May 20, 2010 at 5:52 PM, Clark Robinson <robinsonchicago@gmail.com> wrote:

Scott, for when you have time,

Barrett stuff you have not seen is blue.

I have been thinking about filing the non profit corporation papers IRS approval request ourselves.

Barrett is not having much luck finding a lawyer to volunteer for this.

Here are some remarks I sent him earlier today (Thursday) with some later thoughts added-in:

RE: finding a lawyer

I have spent the morning looking at the actual process of creating a non profit charitable corporation in New York, and although it involves tedious steps and filings, it looks do-able:

here are some of the things that are involved:

choose a name that is not in use and can not be confused with one in use, "Project PM Foundation" appears to available

File certificate of incorporation with the state of NY, this will require three individuals to sign as officers of the corporation, need not all be NY residents, but will need a NY mailing address (which will need to be kept current with the state authorities), so probably a PO Box would be best, there is a $75 filing fee

File for charity exemption with IRS (looks do-able)

Register charity with state of NY

At some point after the corporation is formed we will need to open a bank account for the corporation, I would expect that to require a minimum deposit

So, a stable address, a couple hundred dollars and some paper work.

I do not see much risk or potential liability in making these filings, if we do it wrong, they get rejected and we re-file.

However, once the corporation has funds or the ability to enter contracts (even verbal ones) it gets pretty serious, so the three incorporators need to know and trust each other

For instance, if the corporation misbehaves, the incorporators themselves can be liable under some circumstances

Illustration: my condo building was built by some guys doing business as a corporation, and when we, the buyers of condos in the new building, sued over construction defects, the builder moved for dismissal on the grounds that his corporation was liable, not him personally -- however, we found a defect in his corporation and the court ruled he would be personally liable, which as a practical matter harmed his credit, thus he became motivated to settle

I will be sending Scott the forms when I have more time and I will get his input on the wisdom of bulling ahead with forming a corporation ourselves.

(Additional comments:)

Why a non profit rather than a foundation or trust? As I understand it, 'foundation' (in this sense) is a non-legal term that describes entities that are recognized under state law as trusts or corporations. A trust is a more difficult entity than a corporation to create and I would not be willing to tackle it. (I do not know if this is true in all states, but seems to be the case in NY.)

Why NY? If, heaven forbid, someone has to show up in person at an administrative agency or court when something goes wrong, we don't want to travel or hire out the appearance. NY requires an in-state mailing address, which is not unusual, since they may have to pass on service of process. I would not be surprised if there are some states that like collecting fees and make it easier to incorporate, but if the organization is incorporated in, say, Nevada but the officers and activity are primarily in NY, it may look sleazy to potential donors.

Anyway, here are some of the forms to look at in the vastness of your leisure.

Search for a name

Application to Incorporate

501(c) application

Registering as charity in NY

(It looks as if the individual fund raisers may have to register, as a separate matter)

IRS informational links

From things you (Scott) have written, I suspect you are familiar with a lot of this material, moreso than myself.

I will eventually put all this in the Financial document, so others can comment, but I would be glad to get your reaction first.

As discussed, this would be something we would do concurrently with opening a donor-advised gift fund account with a brokerage, so that we would be ready when we reach the point where we are able to wind down the brokerage account.

There are also online law firms that advertise prices for doing these things, which might be OK since this is not an unusual set of transactions. I will to look at that sometime in the coming week.

Clark
217-722-8680

--
Regards,

Barrett Brown
Brooklyn, NY
512-560-2302