[Noisebridge-discuss] classes and public benefit status

[Andy Isaacson]

On Fri, May 23, 2008 at 08:10:07PM -0700, Noah Balmer wrote:
> > The property of this corporation is irrevocably dedicated to charitable
> > purposes and no part of the net income or assets of this corporation
> > shall ever inure to the benefit of any director, officer or member
> > thereof or to the benefit of any private person.
>
> NYC Resistor covers a large part of its operating expenses by giving
> classes.  Proceeds from the class are split between the teacher and
> Resistor.  It's a great program that works to everyone's benefit.  I don't
> know if the first line of this paragraph would prevent noisebridge from
> having a director, officer, or member get any money from teaching a class.
> If it does, the motivation for teaching is significantly reduced.  Has
> anyone talked to a lawyer and figured out if this is a problem?

I don't think that the NYCR scenario is prohibited by the "inure to the
benefit" clause.  It might be best to structure it as "the teacher is
charging the students a fee and renting the space from the corp, with a
materials charge added on".  Also, "inure to the benefit" does not
prohibit paying a salary for work done, although there is the caveat
that a director who is also an employee has some special treatment (is
an interested person for certain parts of the IRC, and so on).

> I have a friend with a master's degree in nonprofit management who I'll be
> talking to in a few days, and she might know the answer on this, but I
> wonder if someone on the list already knows.

More insight is always welcome, and I appreciate your bringing this up
-- it hadn't occurred to me as a potential problem.

-andy