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gj Michelob -> RE: ForoFlamenco Small Prize Fund -Non For Profit Org.? (Apr. 2 2009 5:56:18)
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Thank you Ron for the very sound and clear outline of rules and recommendations.
TRANSPARENCY: this is probably the most time consuming part, particularly if we can hope in a lot of contributions. I agree, however, that I will
1. share a periodic Accounting with the Forum
2. allow general/public Viewing Access to the bank-account hosting the contributions (Fund).
DISCIPLINE OF BANK ACCOUNT: by allowing viewing access, I am afraid I would forfeit the opportunity to host the Fund in my attorney’s escrow. These accounts are strictly disciplined by the certifying state (NY) and solely attorneys are permitted to administer them, with serious disciplinary consequences. It would probably represent the best solution, but wouldn’t allow the extent of transparency the Forum deserves and which would protect me (as you prudently cautioned) from allegations of mishandling or embezzling funds.
Instead, I suppose we should have an ordinary account.
TAX CONSEQUENCES: I need to research this item, so to avoid any tax on the account.
SOLUTIONs:
Registering an entity as a Non-For-Profit (hereinafter “NFP”) would indeed resolve many problems. There would be a serious initial investment of time but it would afford me and the Forum a formidable vehicle to:
1. avoid any tax consequences
2. allow transparency
3. receive government controlled and insured accounts
4. afford tax deductions to contributors [US tax payers certainly, foreigners –in certain qualified jurisdictions- to be determined];
a. this could be become interesting when and we will allow more substantial contributions from individuals and entities. Without complicating matters, this effort (setting up the NFP) may indeed create a thee layered contributory plan, to:
i. acquire and distribute competition prices –this could be the basic $3 donation;
ii. benefit the administration of the Forum;
iii. attract any other contribution to organize and sponsor members’ activities and events (such as a Video, CD or Concert, research and tutorial material)
While I share Ron’s concern that no one should develop a sense of privileged entitlement based on contribution, stringent rules of anonymity could be sanctioned unless the contribution is made to further or promote the contributor agency, notoriety or product (the Gov.of Spain, Vicente Amigo’s CDs or One’s website or Guitars).
If we choose this option, it would require an executive committee of some sort. Obviously Simon and Ron would be the automatic selection, perhaps supported by an Advisory committee –including Lawyers and Accountants wishing to devote some pro-bono time.
If there is a consensus I recommend this option. Although a modest contribution, its demands and issues wouldn’t differ from any other NFP type fund. It would be more work for me, but it would pay off in the long run.
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