A temporary alternative to incorporation:
If I read the conversations correctly, one of the major goals of
incorporation is to allow payment of speaker fees and to gather money
for occasional expenses such as conference booths.
There may be a way to get checks for speakers and payments for
various fees and materials without incurring a tax or liability
problem.
Consider using "underwriters". An underwriter guarantees the
availability of funds if the normal source does not come through, e.g.
underwriting your child's first car loan.
The normal source of money, in this case, is voluntary contributions
by active gnhlug members. This is not a dues proposal, just a
pass-the-hat proposal. It also allows contributions by businesses
without any tax, liability, or contract problems.
The details can best be explained by a concrete example, that of
providing an honorarium check to speakers at MerriLUG meetings. The
numbered steps are for discussion reference only. They include
comments on the tax, liability, and contract issues if relevant.
Despite the step-wise listing below, underwriting should be viewed
as a concept not a formula. It can be adapted to a much broader range
of activities.
* * * * * * *
1. Determine what honorarium amount the group is likely to be able to
raise.
In the MerriLUG case, 12 attendees would be an attainable average.
If they would donate an average of about $2 per meeting, MerriLUG could
afford a $25 honorarium.
2. Find a reliable underwriter who is willing to provide a check for $25
each month over some period, say 12 months, made out to an individual
to be determined.
The underwriter must be prepared to lose $25*12= $300 as a
non-tax-deductible charitable contribution.
The underwriter has no say about who the checks are made out to, so
has no liability regarding the choice of speakers.
There is no implication that the check recipient is doing anything
for the underwriter, so there is no more liability regarding how the
recipient behaves than there would be to dropping money into the hat of
a street musician.
There is no written contract or communication between gnhlug and the
underwriter. A contract implies tit-for-tat. Even if such a thing were
feasible for an ad hoc group, it would be wrong to enter. This is
strictly a one-way charitable initiative on the part of the underwriter
- for everybody's protection.
This small activity is not practical for a large company (e.g. Red
Hat, BAE), but it is a comfortable amount for many small companies and
active professionals in gnhlug.
3. Provide a "Contribution Hat" of some type at each MerriLUG meeting.
Label the Contribution Hat with "$2 to $3 Contribution for Meeting
Expenses Appreciated".
Some informally appointed person at MerriLUG collects the money and
gets it to the underwriter.
The honesty in handling the money relies on social pressure rather
than legal means. If the money is found to be mishandled, someone else
will assume the duty. And, we are not talking MegaBucks here, so the
danger is more likely to be laxness in forwarding the money than in
theft.
If the full year's commitment for $300 gets collected early, the
Contribution Hat is not put out for the remainder of the meetings. If
the contribution are fulfilled very early, say in 6 months, MerriLUG
should consider raising the honorarium (or lowering the recommended
contribution) the next year. Ideally, the contributions should reach
the cost in about 9 months.
The money forwarded to the underwriter is not income, it is just a
reduction in the underwriter's charitable contribution.
The underwriter is not very likely to incur the expense of the total
$300 charitable pledge, although the underwriter must be prepared to do
so.
There is no income to MerriLUG or any individual in MerriLUG.
There is no need for a gnhlug checking account.
4. No tangible benefit to the underwriter.
It might be tempting to list the underwriters and their business
information on the web site or wiki (as done for the underwriters of
National Public Radio). That would be a mistake. It would imply a
contract between the person responsible for the web site (not the ad
hoc MerriLUG group) and the underwriter. That is highly undesirable.
The underwriter can be thanked verbally, if the moderator remembers
to do so, at each meeting. There is to be no mention of this "thanks"
in any of the meeting summaries or notes. "Remembers to do so" is not
to speculate on the mental capabilities of the moderator but is to
stress that this is not a commitment, which would imply a this-for-that
contract.
5. Underwriting policy posted.
While there can be no contract with the underwriter for many
reasons, it should be possible to post a policy (incorporating
whichever of the above features are agreed by consensus) on the web
site much as the advice for running a meeting is posted.
* * * * * *
Do we have the foundations for a solution - or at least an
experiment - here? What considerations were missed? What are the
reasoning flaws you see? Can we get comments from a Legal Beagle in
the group?
Jim Kuzdrall
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