As some of you may already know, for some time now, Spring staff has been working to make our legal structure properly match what it is our community is actually doing. The goal was to smooth staff’s interactions with the great piles of paperwork out there in world, as well as to codify some of what our intentions and basic understandings are. If you’d like to know about what what we look like on paper in the eyes of the law, keep on reading!
While Spring is now a nonprofit corporation (legally speaking) we are still the same old Spring at heart.
In December 2015 Spring Forum for Alternative Community, LLC changed into Spring Forum for Alternative Community, Inc. We are now a nonprofit in the State of New Hampshire that is applying for IRS 501(c)(7) status. This FAQ will hopefully answer most the questions you have about it.
What is a 501(c)(7)?
A 501(c)(7) is a ‘social club’—one of many categories of nonprofit defined by the IRS. They do not have to pay federal or state taxes on income BUT donations to a 501(c)(7) are not tax deductible. A 501(c)(7) exists for the benefit of its members and its events can be for pleasure, recreation, or other purposes.
How is this different than a 501(c)(3)?
When most people think of a nonprofit, they think of a 501(c)(3), otherwise known as a ‘charitable organization.’ They exist for the public good. Groups such as the Red Cross and many homeless shelters are in this category.
What is membership about?
Since 501(c)(7) organizations exist for the benefit of their members, Spring has to define who these members are. Details are in the Bylaws, but generally, attendees automatically become members once they arrive at their second conference. Membership is renewed every year when attending the event. After three years of not attending membership lapses.
For the sake of new membership, if you attended Spring in 2015 you became a member when you arrived at Spring 2016.
Other than the fact that Spring is run for their benefit there are no special privileges or discounts reserved for members, but we may work on a secret handshake in the future.
Does this change the role of staff?
Staff is the board of directors for the 501(c)(7), with three officers: secretary, treasurer, and president/executive officer. (The position of executive officer has no special powers and is required to fulfill the guidelines of the 501(c)(7) documents.). But staff still operates as it always has. The new structure actually better represents what we have always been.
If I give money to Spring, will my donation now be tax-deductible?
Sadly, no. Although Spring does not need to pay State taxes, and will not have to pay Federal Taxes once we obtain a 501(c)(7) designation, those benefits do not apply to individuals giving to the organization.
Why not stay a LLC (Limited Liability Company)?
LLCs are usually intended for groups of investors that form a business partnership. The LLC isn’t taxed; instead revenues flow to the individual partners who have to claim income from the LLC on their individual tax forms… it isn’t really a good fit for Spring.
What about Sputnik?
Sputnik was the first to become a nonprofit. Spring and Sputnik staff’s were able to share knowledge and resources as they went through the process together (thank you Sputnik staff!).
Does this mean we’re forming an umbrella organization?
Staff’s priority was to find a more appropriate legal structure for Spring. Whether or not to pursue an umbrella organization will have to be taken up later, but becoming a nonprofit doesn’t rule out or hinder the possibility of forming an umbrella organization in the future.
How can I learn more?
The two documents that define Spring (or more accurately Spring Forum for Alternative Community, Inc.) are the Articles of Incorporation and Bylaws. Links to these documents are below:
If you have any questions that aren’t covered here or would like clarification on anything send us an email at out shiny new Spring staff gmail address email@example.com.
(Aleks, April, Bryce, Coran, Josh, Lorraine, Lulu, Reeve)
Note: this was drafted, for the most part, by Spring 2016 staff but not sent out until now.