[Foundation-l] Wikimedia Pennsylvania

Thu Jul 12 15:35:32 UTC 2007

Anthony wrote:
> On 7/11/07, Robert Horning <robert_horning at netzero.net> wrote:
>   
>>  From a legalistic viewpoint, I wonder here if at least trying to get
>> this going in the first place that these chapters could be organized by
>> having them chartered through the WMF itself rather than having to go
>> through the formal process of trying to incorporate as a non-profit
>> corporation in each local area where they are located at.  This does
>> increase legal liability for the WMF if this happens, and has some other
>> drawbacks, but it allows a much more informal process to occur that
>> would allow new regional chapters like this to be created quickly and
>> cut out quite a bit of the red tape normally associated with
>> incorporation.  It would also allow Wikimedia-Penn to use the 501(c)3
>> tax exempt number right away as long as the WMF board accepts the
>> charter and organization.
>>     
>
> I'm not sure what you mean by the "tax exempt number".  If they need
> an EIN for a bank account, all they need is a charter.  Even an
> unincorporated association can get an EIN, and is exempt from most IRS
> reporting requirements if they get less than $25,000/year in gross
> receipts.  I say most because the IRS just instituted a Form 990-N
> which is a postcard sent in annually by 501(c)(3)s who have gross
> receipts of $25,000 or less.
> http://nonprofitmanagement.suite101.com/article.cfm/irs_form_990n
>   
Again, this is also a federal vs. state issue, where some states issue 
explicit tax-excempt ID numbers independent of the EIN, but depend on 
the IRS to designate the organization as a formal tax-exempt 
organization.  This is to avoid paying state taxes as well as federal 
taxes for some items, like a bunch of pizzas for a meet-up.  The WMF 
already has been designated as a non-profit by the IRS, which would be 
at least one route to go in terms of trying to put something like this 
together.

Going through the steps of hiring an attorney and accountant to deal 
with all of these various overlapping laws and political jurisdictions 
can be a rather daunting task, and it is precisely this aspect of formal 
incorporation I'm trying to suggest we might want to avoid if 
possible... if we can put together a way to simplify this process and 
allow interested groups of Wikimedia users in the USA to put together a 
small group of like minded people that can support Wikimedia projects on 
a local level.

If the WMF doesn't want to get directly involved in this game, I can 
understand, but that would mean this process of formal incorporation as 
a non-profit group may have to happen for the Pennsylvania group, and 
may have to be dealt with for other groups in the USA as well to become 
completely different entities independent of the WMF.  This seems like a 
waste of resources and effort, and especially money that could be better 
spent on Wikimedia projects directly than to deal with legal and 
accounting costs.  Requiring any local Wikimedia chapters to seek formal 
incorporation is also going to slow the progress of any new group 
significantly, and raise the bar of talent required to put together any 
such group to the point that many potential groups like this will never 
be started at all.  I'm not convinced that there is a need to formally 
incorporate a Wikimedia San Francisco and Wikimedia Pennsylvania as 
seperate entities.

All of this together with the fact that Wikimedia USA will not get 
started until these more local chapters get organized.... unless there 
is some huge effort put forward to put the national group together that 
just doesn't seem to be happening.

-- Robert Horning