There is an IRS distinction between non and not for profit in that the IRS doesn't even acknowledge not for profit as a thing you apply to them as, a not for profit is just like any other c-corp except that in our mission statement and Bylaws we include language forbidding individuals from making a profit off us. We pay standard business taxes and the like. There are benefits to doing this as mentioned by Jim. Some of the downsides include the significant one of finding starting capital. We had a founding member give us a loan of a significant amount of money to get started. Another is that we've ran into some hurdles in developing a relationship with other organizations, especially in seeking bike donations from municipalities. 
I think the Kitchen had a particularly hard time getting their 501. I don't think that is the case everywhere and I know of more than a few that have gone the 501 route and haven't had much trouble/ haven't had as many restrictions put on them. The Santa Cruz bike church would be a prime example. 

Enzo Loconte
Board Secretary
Bikerowave

On Jul 26, 2013, at 8:39 AM, "Martin, Eric Vance" <evmartin@indiana.edu> wrote:

I don't think the IRS technically distinguishes "nonprofit" and "not for profit." Are you talking about the distinction between a 501(c)(12) cooperative and a 501(c)(3) public charity or private foundation?

Can anyone else talk about good/bad experiences with each legal form of organization?

From: thethinktank-bounces@lists.bikecollectives.org [thethinktank-bounces@lists.bikecollectives.org] on behalf of james bledsoe [jamesbleds0e@yahoo.com]
Sent: Friday, July 26, 2013 11:11 AM
To: The Think Tank
Subject: Re: [TheThinkTank] Recycle-a-bike program: seeking other models, successes, failures and suggestions!

i would suggest that you if it possible form the root of your organization as a Not for Profit.  Not for profit is different than nonprofit.  The Bikerowave in Los Angeles is set-up this way.  They are still a collective still putting bicycles on the street and serving a public good.  But they are not held under the nonprofit strictures and thereby allowed much grater flexibility in how they handle their money.  They cannot give a tax credit for receiving donations but from my experience at the Bicycle Kitchen where i have volunteered for nearly ten years most of our donating patrons don't ask for an in-kind receipt.  When the kitchen formed we considered forming as a coop where we could operate something like REI  but already having 50g s in the bank and an excellent set of tools when we approached the non-profit umbrella we were working under they said we could become a coop simply by donation our cash to a charity of our choice and then buy back our tool for slightly higher than market price.   So when the Bikerowave founders came to see how we had done it  we suggested that they not become a nonprofit and they built there shop outside the nonprofit realm.   Take a look here http://bikerowave.org/

jim
From: Jennifer Kay <jen.louise.kay@gmail.com>
To: Vernon Huffman <vernonhuffman@yahoo.com>; The Think Tank <thethinktank@lists.bikecollectives.org>
Sent: Monday, July 22, 2013 3:12 PM
Subject: Re: [TheThinkTank] Recycle-a-bike program: seeking other models, successes, failures and suggestions!

Thank you Stephen and Vernon, very helpful info (and checklist)

A thought on one of your comments Vernon:  were thinking of establishing some criteria for the donation bikes so we are not overwhelmed with unusable donations.   Have you considered this, do you think it is a realistic approach, and, if so, do you have any suggestions for clear criteria?

Jennifer


On Fri, Jul 19, 2013 at 10:47 PM, Vernon Huffman <vernonhuffman@yahoo.com> wrote:
If you only have capacity for 15 bikes, don't let people know you're looking for unused bikes. Every effort I've been part of has been overwhelmed by donations. As they come in, decide which are worthy of your efforts, which have components you can use, and which go straight into recycling. Your standards will slide, depending upon what's donated. Disposing of unusable bikes & components should be part of the plan.

Sorting stripped parts is always a challenge. Plan early, but stay flexible. Shelving units with reusable containers of various sizes can be very handy. Have a way to decide what you'll actually be able to use, so you don't end up storing junk that nobody wants. Selling parts has historically accounted for about half our income.

You might want to get started now on a long term goal of finding a location with more storage. I suspect space will be your biggest constraint.

From: Jennifer Kay


Hi!  I am with La Bikery in Moncton, New Brunswick.  We are in the initial
stages of starting up a small scale recycle - a - bike program (storage
capacity = 12-15 bikes).  I am sure there are plenty of success stories
already out there, so I am hoping to draw on some of your expertise.  If
you have any functioning models to share (or examples of what NOT to do!),
I would be grateful to hear from you.

Thank you,
Jennifer
Recycle-a-bike Coordinator,
La Bikery


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