community ensemble organization

[Dan Schultz]

Hmmmm... I would think you still need the determination letter.

Maybe for the kind of public trust issues you allude to. But the form 1023 instructions definitely say on the first page that if you normally have under $5000 in annual revenue, you don't.

That's good to know. The rules are ever-changing and I'll be first to admit that I don't keep up with the latest.

[MSchott]

.... we never could figure out a definition for membership that worked for us, so we organized as a corporation without members and made the board self-perpetuating.

Also, you don't need an IRS determination letter if you have gross receipts of less than $5000 a year. We never came close while I was involved. Makes all the compliance stuff much simpler.

Hmmmm... I would think you still need the determination letter. However... you do not need to do a formal yearly filing if you are under a certain gross threshold. It was $10,000 when we originally formed sixteen years ago and moved to $25,000. It might be $50,000 by now. We do what is called an 'E-card file' each year.

The term 'membership' can be whatever you choose to make it. However... if you ever have a serious liability issue... your insurance company (and probably attorneys) will ask you to define 'membership'. You NEVER want to ask an attorney a question like that!

Being a corporation does not fully protect your board or officers in the event they do something criminal or stupid. That being said... I would not served on any board of directors or as an officer for any organization that does not carry a good comprehensive general liability policy and have at the very least Articles of Association.

My opinion regarding not-for-profit organizations.... I think there are WAAAY too many of them and the waters gets very 'muddy' when that term is just thrown in. Colleges and universities now offer full courses in how to operate a not-for-profit. An unpaid Board of Directors plus the necessary filings is about all that's required to be a not-for-profit. There are often still monstrous 'Executive Director' salaries and such. Elizabeth Dole raked in way over a half-million a year for all the years she was director of The Red Cross.

There's a considerable difference between running The Red Cross and a local non profit of course. Especially when talking about a 501 3C. There are some pretty strict reporting and tax guidelines for such a group.