From lojbab@lojban.org Thu Sep 07 04:56:49 2006 Received: with ECARTIS (v1.0.0; list llg-members); Thu, 07 Sep 2006 04:56:50 -0700 (PDT) Received: from centrmmtao01.cox.net ([70.168.83.83]) by chain.digitalkingdom.org with esmtp (Exim 4.62) (envelope-from ) id 1GLIUp-0004Jj-2w for llg-members@lojban.org; Thu, 07 Sep 2006 04:56:44 -0700 Received: from eastrmimpo02.cox.net ([68.1.16.120]) by centrmmtao01.cox.net (InterMail vM.6.01.06.01 201-2131-130-101-20060113) with ESMTP id <20060907115637.OLAO24246.centrmmtao01.cox.net@eastrmimpo02.cox.net> for ; Thu, 7 Sep 2006 07:56:37 -0400 Received: from [127.0.0.1] ([72.192.234.183]) by eastrmimpo02.cox.net with bizsmtp id KPwR1V0083y5FKc0000000 Thu, 07 Sep 2006 07:56:27 -0400 Message-ID: <45000935.1060005@lojban.org> Date: Thu, 07 Sep 2006 07:57:41 -0400 From: Bob LeChevalier User-Agent: Mozilla Thunderbird 1.0.7 (Windows/20050923) X-Accept-Language: en-us, en MIME-Version: 1.0 To: llg-members@lojban.org Subject: [llg-members] Re: Monetary help requested. References: <20060831231043.GP6721@chain.digitalkingdom.org> <44F7F80B.8050800@lojban.org> <20060906230155.GW29824@chain.digitalkingdom.org> In-Reply-To: <20060906230155.GW29824@chain.digitalkingdom.org> Content-Type: text/plain; charset=ISO-8859-1; format=flowed Content-Transfer-Encoding: 7bit X-Spam-Score: -2.6 (--) X-archive-position: 286 X-ecartis-version: Ecartis v1.0.0 Sender: llg-members-bounce@lojban.org Errors-to: llg-members-bounce@lojban.org X-original-sender: lojbab@lojban.org Precedence: bulk Reply-to: llg-members@lojban.org X-list: llg-members Robin Lee Powell wrote: > On Fri, Sep 01, 2006 at 05:06:19AM -0400, Bob LeChevalier wrote: > >>Robin Lee Powell wrote: >> >>>I'd really like to send Matt Arnold to PhilCon, because he's good >>>at getting people motivated and interested in ways I'm not. >>>Rather than spending the LLG's money on it, I wanted to see if >>>anyone else was willing to chip in. We need about $150 (not >>>counting the room, which Shoulson and I will pay for). >>> >>>If you'd like to help, please just paypal me the money >>>(rlpowell@digitalkingdom.org). If you don't trust me with your >>>money, you really need to elect a new Sec/Treas for the LLG. :-) >> >>Actually, I suggest that people donate to LLG, specifying the >>"LogFest fund", which will go to pay expenses associated with >>LogFest, which can include the costs of key people attending for >>purposes associated with the organization's charter - Matt's costs >>being among them, since you have made clear that the reason for >>paying for his costs is clearly related to the LLG charter. > > I have no idea what the tax implications are. I am under the vague > impression that you can't do that with a non-profit and still have > it be tax deductible, but I don't actually know, and don't > particularily want to engage the services of an appropriate > proffessional. Have no fear. I have a considerably better idea, because I read the booklets several years ago to know what the rules are. The laws of course may have changed in the past couple of years. The only change that I saw over the course of my tenure of office was the added requirement for receipts for donations above a certain size, and we do need to stay on top of that requirement (and the IRS officially notified us of this change to the law, which leads me to suspect that any significant change in deductibility laws would also get us an official notice). I am far more afraid of us running afoul of the law if we ever get to the income level requiring us to do annual reports, because those reporting forms make the 1040 form look easy (they are more or less the same kind of report that I had to prepare in order to get 501(c)(3) in the first place). But that level was something like $15000 or $25000 and may now be higher, and we didn't even come close in the peak year of CLL sales. I had to do a report the first year, when our finances were trivial and it still took a long time. (On the other hand, if we've set up QuickBooks correctly and tracked our expenses properly, it might be easier than I remember it - I was doing it all by hand). > Specifically, I believe, with little or no actual evidence, that it > is illegal to deduct a donation ear-marked for a particular purpose. It is perfectly legal for LLG to set up donation funds for specific purposes which are consistent with our charter, and which do not violate 501(c)(3) terms. My alma mater is regularly calling me seeking donations to this or that building fund, or scholarship fund, where they state what buildings are to be built from the former, or what types of people will get the latter. A donation to such a fund is tax deductible (in the US) assuming that it would tax deductible in general. That is what the 501 (c) (3) status is all about - we had to convince the IRS that our purposes and practices were such that money spent for those purposes would in fact *always* meet the letter of the law, and not excessively inure to the benefit of directors or officers, and that those "charitable" purposes were among those which the law grants non-profit status for. You can also deduct money that you spend on yourself while working for a for a charitable (i.e. like ours) organization. The deduction rates are not as broad as employee business expenses - I think you can only deduct mileage costs at something like 11 cents a mile instead of the much higher rate for employees. If you (Robin) were keeping careful records, I suspect that you could deduct a goodly sum each year for the costs you incur in running our website (LLG paid for my ISP for the several years when my Internet usage was almost entirely for Lojban, and for long distance calls on my phone that were for LLG purposes. I also think I deducted a portion of my expenses for Worldcon 1989, which I could easily establish that I would not have gone to, except to promote Lojban for the organization). Where it gets tricky is if you donate money *and receive any goods or services in return*, the value of said goods and services is not part of the donations (so you cannot count your subscription cost for National Geographic magazine as a donation to that organization). There are also special provisions of the law against exceeding some percentage of organization proceeds "inuring to the benefit of" directors, who because they control the money-spending, though even with our low budget. Evaluating this fairly and legally is such that I would recommend that any LLG officer or board member be careful about donating money which will be spent in any way to their own personal benefit because of course they are the ones who make the decisions about funds and purposes. Politicians hire people who know what they are doing to separate campaign travel from junket travel associated with the office, and still sometimes run afoul of the law - but I suspect that is primarily when they get abusive of the practice. The rules I read seemed to mostly be common sense to avoid the appearance of abuse. If we set up a donation fund to help people attend LogFest in order to serve on LLG programming in support of our mission, *and that fund does not benefit any of the "committee" who decides how the money will be spent*, there would be no question as to its legality. That means that Matt would recuse himself from any Board vote (or committee membership) that decides that the organization will spend money from a fund for his benefit. (I don't think there would be any question even if he *was* involved in the decision, since there is no question that he is being asked to go for the benefit of the organization and not his personal benefit as evidenced by the way the subject came up). lojbab