501(c)3 status

There needs to be a board. It would include people who come to hack night, and people who don't.

Nick,

I think you are proposing this to gain tax exempt status. (please correct me if I'm wrong) I am looking at ChiHackNight as a collective that comes together to do civic hacking. Those are very different starting points and each leads down a path that ends up in a very different place. I want to consider which starting point and path gets us where we want to be. So perhaps we should figure that out first.

Here are three links to start looking at the differences.

*About Co-ops
*Tax-Exempt Organization Reference Chart (rather old, doesn't inlcude latest method that you referenced)
*HOW DO THEY DIFFER: Co-ops, C-Corps, LLCs, Non-Profits, L3Cs, CMGs

DataMade, Code for America, mRelief, CityScape and many others associated with ChiHackNight have found it beneficial to start/continue their relationships with and/or sponsorships of the event. In part,through our work, they have received the energy to build new ventures. I would like to present that as one model for our sustainable future. Here are some of the characteristics that I have in mind when I consider ChiHackNight's organizational structure:

*Open; easy to get started and stay engaged
*Supportive; we're trying to help people that are interested in civic tech achieve this through learning groups and working groups
*Network; a place for people with common concerns and specific skills to gather, meet eachother and work together, sometimes leading to something deeper (friendships, businesses
*Community-minded; we're about putting the civic and technology frames together
*Post-consensus,post-heirarchical; anybody can take up a project and everyone is encouraged to do so. Their success depends their and the other members that they attract to the project resources to complete it.

I am proposing this for use of tax exempt status and the benefits it brings. I am proposing this specifically because of my positive experience gaining 501(c)3 status. I am apart of Urban Rivers (formally Naru), we had skirted for months around applying for this status. I learned about the 1023EZ, a way for small orgs to gain non-profit status quickly.

Since applying we have received many perks, free slack premium being the one that triggered me bringing this up. I tried to search for an old post and realized it was older than 10,000k messages.

In our organization having 501(c)3 status did not effect the culture or structure of our group at all. The benefits have been tremendous. In kind donations have flowed our way quickly, we have $10k in adwords per month, slack premium and the ability to access many grants which can support our vision.

That being said our vision at Urban Rivers is much different from that of Chi Hack Night. What works for one may not necessarily work for the other.

These are all fantastic points. A board seems, on the surface, to naturally lead towards the sort of leadership style I see the Hack Night actively trying to avoid.

There are pros to operating as a non profit, especially in finding revenue to fund operations. If it's a question of keeping ChiHackNight alive or not, then creating the non profit structure would seem to be a positive choice.

However, there are negatives, too, particularly in the reporting and documentation requirements and governance structure. i started two non-profits in the past. One in 1990 and another in 1993. Immediately the first formal bureaucracy was to create a written set of by-laws, governing how the organization operates, its leadership structure, etc. You might want to draft this prior to finalizing a decision on becoming a non profit.

In addition, I did not realize how important and time consuming it was to keep detailed records of all transactions, especially with donors, when I started. Nor the need to have these transactions audited annually. All of this requires time, which could be handled by a volunteer initially, but as the organization grows, would need to be supported by paid staff.

The governance issue may or may not be an issue for ChiHackNight. If you already have a group decision making process, and these people agree to become your official governing board, it's probably a seamless transition. However, if the current leaders are not part of the governing board, a conflict in making decisions can arise. Personalities become an issue.

Finally there is an issue of leadership style. While I've attended HackNight off and on for at least two years, it seems that the drive comes from Derek and Chris and DataMade, Their vision seems to be supported by everyone else. It's very entrepreneurial. In a non-profit structure, with no staff (initially) I assume Derek would be the chairman of the board, and operations would continue pretty much as they have been. However, over time, as new people take roles on the board, would his ability to make decisions be reduced? If the group later requires/or chooses to name an executive director, would Derek want this role? Over time, as board membership changes, they relationship dynamic between founder/leader and the board can also change. In my own case, I've been kicked out of organizations I'd led for 17 years each, when the mix of directors suddenly changed and my support eroded.

Obviously, you're not thinking 10 and 15 years into the future. I encourage you to talk to founder/leaders of small, and newly formed, non profits, to get other perspectives.

This is a great idea, and one I've thought about doing for a while now. Let's discuss it tomorrow during our leadership council meeting.

As per our leadership council meeting on Aug 9, Christopher and Steve will work up a proposal on the steps to exploring organizational models and making a decision.