[Foundation-l] Wikimedia Pennsylvania

[Anthony]

On 7/12/07, Robert Horning <robert_horning at netzero.net> wrote:
> Anthony wrote:
> > On 7/11/07, Robert Horning <robert_horning at netzero.net> wrote:
> >
> >>  From a legalistic viewpoint, I wonder here if at least trying to get
> >> this going in the first place that these chapters could be organized by
> >> having them chartered through the WMF itself rather than having to go
> >> through the formal process of trying to incorporate as a non-profit
> >> corporation in each local area where they are located at.  This does
> >> increase legal liability for the WMF if this happens, and has some other
> >> drawbacks, but it allows a much more informal process to occur that
> >> would allow new regional chapters like this to be created quickly and
> >> cut out quite a bit of the red tape normally associated with
> >> incorporation.  It would also allow Wikimedia-Penn to use the 501(c)3
> >> tax exempt number right away as long as the WMF board accepts the
> >> charter and organization.
> >>
> >
> > I'm not sure what you mean by the "tax exempt number".  If they need
> > an EIN for a bank account, all they need is a charter.  Even an
> > unincorporated association can get an EIN, and is exempt from most IRS
> > reporting requirements if they get less than $25,000/year in gross
> > receipts.  I say most because the IRS just instituted a Form 990-N
> > which is a postcard sent in annually by 501(c)(3)s who have gross
> > receipts of $25,000 or less.
> > http://nonprofitmanagement.suite101.com/article.cfm/irs_form_990n
> >
> Again, this is also a federal vs. state issue, where some states issue
> explicit tax-excempt ID numbers independent of the EIN, but depend on
> the IRS to designate the organization as a formal tax-exempt
> organization.  This is to avoid paying state taxes as well as federal
> taxes for some items, like a bunch of pizzas for a meet-up.  The WMF
> already has been designated as a non-profit by the IRS, which would be
> at least one route to go in terms of trying to put something like this
> together.
>
> Going through the steps of hiring an attorney and accountant to deal
> with all of these various overlapping laws and political jurisdictions
> can be a rather daunting task, and it is precisely this aspect of formal
> incorporation I'm trying to suggest we might want to avoid if
> possible...

Well, as I said before, you don't need to incorporate in order to be a
tax-exempt organization.  And while I don't know PA state tax law
offhand I'm not sure it's worth going through the WMF just so you can
get a sales tax exemption on a few pizzas every week.  Is the WMF even
registered with the state of Pennsylvania?  If not the paperwork would
probably be just as bad.

> if we can put together a way to simplify this process and
> allow interested groups of Wikimedia users in the USA to put together a
> small group of like minded people that can support Wikimedia projects on
> a local level.
>
> If the WMF doesn't want to get directly involved in this game, I can
> understand, but that would mean this process of formal incorporation as
> a non-profit group may have to happen for the Pennsylvania group, and
> may have to be dealt with for other groups in the USA as well to become
> completely different entities independent of the WMF.  This seems like a
> waste of resources and effort, and especially money that could be better
> spent on Wikimedia projects directly than to deal with legal and
> accounting costs.  Requiring any local Wikimedia chapters to seek formal
> incorporation is also going to slow the progress of any new group
> significantly, and raise the bar of talent required to put together any
> such group to the point that many potential groups like this will never
> be started at all.  I'm not convinced that there is a need to formally
> incorporate a Wikimedia San Francisco and Wikimedia Pennsylvania as
> seperate entities.
>
I agree with this, to the extent that I'm not convinced that there's a
need to formally incorporate anything at all at this point.