Re: The future of my involvement with the Octave project

[Steven Levine]

In <address@hidden>, on 12/10/08
   at 08:52 PM, John Swensen <address@hidden> said:

Hi,

IANAL, but I have been involved in a couple of 501(c)3 applications.

>From what I have read, if someone is  
>willing to do the legwork (and paperwork), a 501(c)(3) can be started  
>for $300 (unless the first year profits/donataions exceed $10000, in  
>which case it would be $750).

The costs are in that range, if you are going to use something like the
NOLO press books or have pro-bono legal services.  The total costs depend
a bit on the state in which you incorporate.

>In summary, there is a lot of up-front paperwork to get registered.   

The paperwork is a bit time consuming.  It's a lot more than a couple of
hours work, but the it's time well spent if the organization qualifies for
501(c)3.

The most important part of the application is how you state the entity's
purpose in the 1023 application and the state equivalent.

I have seen cases where organizations were denied exempt status because
there was an implied association with a commercial product, even though
the organization devired no direct benefit from this association.  This is
probably part of the reason that there are two Mozilla entities - the
Mozilla Foundation and the Mozilla Corporation.

Once there is a positive determination letter, the effort to run a 501(c)3
are the same as for any other business of an equivalent size.  You have to
do accounting, pay employee taxes, pay filing fees, hold board meetings
and so on.

Steven

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