[Noisebridge-discuss] Charging for classes at Noisebridge

Sai Emrys noisebridge at saizai.com
Fri Jul 23 13:36:07 UTC 2010


On Thu, Jul 22, 2010 at 2:46 PM, Christie Dudley <longobord at gmail.com> wrote:
> There was a funny issue that we could pay her
> and have her pay her dues, but we couldn't offer her a membership in
> exchange.  I don't remember all the details, but I remember being told it
> was against the non-profit rules.

Yeah. You want to avoid having to have NB-the-org doing any of the following:
* pay people
- except competitive professionals at standard market rates
* subsidize membership
- except giving free honorary memberships for people who do something
awesome enough
* decide what something is worth financially
- this is a serious one for various reasons, and is what precludes
membership-for-work trades
* subsidize or give stuff to non-non-profits
- this is also a very serious one that can cause NB to lose non-profit
status if done wrong
- except reimbursing expenses is fine

The last one IMO (as I elaborated earlier) precludes
instructor-gets-money-for-time classes at NB without a very explicit
official decision that subsidizing these teachers' personal finances
by giving them free space to teach in is part of NB's charitable
goals.

To give a more obvious example of why the last one is bad: suppose NB
allowed a for-profit company to take over half the space for free.
Given that it's being paid for with non-profit-tainted money (i.e.
donations, dues, etc), that would be transferring a thing of value
(rental property) from a non-profit entity (NB) to a for-profit one
(the company). That's a huge no-no.

Individuals are by definition not non-profit entities. Therefore
allowing individuals to teach classes for personal profit without
charging them fair-market-value rent is again giving them NB valuable
property (space) for free. This is a difference only of degree, and
the law on this point doesn't officially care much about degree.
(Unofficially, I don't know.)

There's only one case that's permitted for a non-profit entity to do
that, TTBOMK: if giving that kind of subsidy to the class of people
getting it is in NB's charitable mission according to its official
Articles of Incorporation.

If y'all want to approve for-profit teaching, I strongly suggest that
this issue be discussed with a Real Tax Professional™ 'cause it's a
huge legal "you can lose your non-profit status over this" red flag to
me.

- Sai



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