Mary,

Ryan said it best about the volunteer point system.  

As for selling bikes, we here at the Bicycle Kitchen in LA ran into this same wall when applying for our 501c3.  We had to say that we will not sell bikes, so we continually tell "clients,"  "We are not a retail shop.  We do not SELL bicycles.  What we have our bikes and bike frames that have been donated to us that the public can come and pick out as a Project Bicycle. With the help of a Cook, you learn to build it up.  In exchange we ask for a donation based on the quality of the bike, how much new parts it needed and how much you, the client can afford to contribute.  We never turn anyone away for lack of funds."

It's all about (for us) making sure that any "sales" are based around our education mission.  We also collect sales tax on new items like cables and chains, tubes etc.

Hope this helps.

Kelly
On Aug 15, 2011, at 11:00 AM, Mary Bergeron wrote:

Hi friends, 

I'm a volunteer at Recycle-A-Bike here in Providence, RI. We are in the middle of applying for 501c3 status and have hit a few road blocks. I was wondering if any folks have applied for 501c3 or are also in the middle of it, and can offer some advice. Basically, my questions are:

- Do any 501c3 shops also have a volunteer point system? At RAB, we award volunteers "points" for putting in time, and they can later cash these points in for used parts or time in the shop. We don't want to get rid of this system, but the IRS finds this problematic for 501c3.

- Do any shops sell bikes as a 501c3? Have shops set up both models- such as a for-profit bike shop to sell bikes and an affiliated non-profit to run community programs? So far bike sales keep us sustainable, so we really want to keep this up as a nonprofit. 

Thanks for any insight! Sorry if a similar email was already sent out by another RAB person...we're all trying to collect as much info as we can.

cheers,

Mary

--
Mary Bergeron
Funds/Outreach Coordinator
c: 508.265.2904
p: 508.273.7101
www.recycleabike.org

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