Discounts for Co-ops
Hello Bike Friends,
Does anyone have solid advice on the legality/Restrictions regarding
discounts given to member/volunteers?
We are a California regestered incorperated Member owned Co-operative, not
a Non-Profit(501c3). We want to give a discount, but I heard it may not be
legal. I hope that it is illegal referring to 501c3's.
As I understand it....It's not exactly illeagal to give discounts to non-profit board members i.e. collective members, but it is bordering on paying them, which is illegal...there are ways to get around it, but you should ask a lawyer about that. I don't think it would be illegal for a for-profit to offer discounts to employees/owners, because the reasoning behind no discounts for the board of a non-profit has to do with it being not for the profit of the "owners"... maybe someone can help elaborate on that... beth velocipede bike project baltimore, md
Date: Tue, 18 Nov 2008 19:40:18 +0000 From: GetGern@gmail.com To: thethinktank@bikecollectives.org Subject: [TheThinkTank] Discounts for Co-ops
Hello Bike Friends,
Does anyone have solid advice on the legality/Restrictions regarding discounts given to member/volunteers?
We are a California regestered incorperated Member owned Co-operative, not a Non-Profit(501c3). We want to give a discount, but I heard it may not be legal. I hope that it is illegal referring to 501c3's. _________________________________________________________________ Get more done, have more fun, and stay more connected with Windows Mobile®. http://clk.atdmt.com/MRT/go/119642556/direct/01/
Sadly, with a good lawyer you can do anything you want, sadly even illegal activities. Pretty sad isn't it? Sader still, if you don't have a good lawyer I would play it safe and not do anything that might _force_ you to get a good lawyer.
Smile!
To figure out what to do to play it safe, contact the agency you filed as a "Member owned Co-operative" with such as the California Secretary of State. If you are a 501(c)(3) non-profit than contact the IRS. Calls can be anonymous.
I would also ask established local "member owned cooperatives" what they do.
I haven't heard any conflicts along such lines other than those with neighboring retailers. The result then is that it gets harder and harder for community projects to get QBP accounts.
As far as taxes are concerned, I am not sure of the specifics. As long as you are covering your costs and not spending money/losing money to support your volunteers' parts habit, I don't suspect there is a problem. It is the mission of most of our project to provide for the safe and affordable repair of bicycles and to encourage mechanical self-reliance etc etc and cheap parts are a big part of this.
josh
On Tue, Nov 18, 2008 at 1:29 PM, Jonathan Morrison < jonathan@slcbikecollective.org> wrote:
Sadly, with a good lawyer you can do anything you want, sadly even illegal activities. Pretty sad isn't it? Sader still, if you don't have a good lawyer I would play it safe and not do anything that might _force_ you to get a good lawyer.
Smile!
To figure out what to do to play it safe, contact the agency you filed as a "Member owned Co-operative" with such as the California Secretary of State. If you are a 501(c)(3) non-profit than contact the IRS. Calls can be anonymous.
I would also ask established local "member owned cooperatives" what they do.
-- Sincerely,
Jonathan Morrison Executive Director Salt Lake City Bicycle Collective 2312 S. West Temple Salt Lake City, UT 84115 w: 801-328-2453 c: 801-688-0183 f: 801-466-3856 www.slcbikecollective.org
Get Addicted to Crank! http://www.slcbikecollective.org/crank/
The mission of the Salt Lake City Bicycle Collective is to promote cycling as an effective and sustainable form of transportation and as a cornerstone of a cleaner, healthier, and safer society. The Bicycle Collective provides refurbished bicycles and educational programs to the community, focusing on children and lower income households.
On Tue, Nov 18, 2008 at 12:40 PM, GetGern@gmail.com wrote:
Hello Bike Friends, Does anyone have solid advice on the legality/Restrictions regarding discounts given to member/volunteers? We are a California regestered incorperated Member owned Co-operative, not a Non-Profit(501c3). We want to give a discount, but I heard it may not be legal. I hope that it is illegal referring to 501c3's. _______________________________________________ Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
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This question came up in our 'Getting Incorporated -paperwork to get legit' and it almost seems like paranoia to me and the bici crew in santa barbara. We give volunteer discounts, but we still make a slight amount of profit in the transaction, just like any other shop would offer an employee discount. In a very real sense our volunteers are employees, they simply don't get paid. In the classic non-profit perspective they are donating their time, and I can understand how the idea of quid pro quo (you do something for me, I do something for you) seems to invalidate that. One way to guard against that is to not give away the volunteer discount to quickly or easily. Based on the accounting and legal advice that we have sought with professionals, this is not a significant concern, in other words:
Don't trip.
I feel like other concerns such as paying sales tax and having insurance to prevent an accident from taking down your kitchen and other important neccessities of being a legal entity are far more important concerns. If your collective is currently being reviewed and scrutinized for acceptance as your own 501(c)3 then perhaps board members shouldn't be recieving anything that could look like a kick-back. Even still I'm not convinced that discount pricing to someone involved in an industry, even the not for profit side of an industry, is at all a kick-back. If you volunteered in an orchard should you pay whole foods prices for peices of fruit?
Obviously to the general public new items you sell should be sold at fair retail value otherwise your organization would be using it's non-profit status to undercut local business. those who significantly contribute hours in an endevor, however, aren't members of the general public. They are part of a team that puts a lot of work into making their shop happen. A (in the scheme of things) minor discount as a perk for significant involvement certainly seems fair and, in our opinion, can be justified as legal.
If you live in California, however, any discount purchases should still include sales tax as they are still a taxable transaction, used or new.
-Ed bici Centro Santa Barbara On Tue, Nov 18, 2008 at 1:51 PM, joshua muir muirjoshua@gmail.com wrote:
I haven't heard any conflicts along such lines other than those with neighboring retailers. The result then is that it gets harder and harder for community projects to get QBP accounts.
As far as taxes are concerned, I am not sure of the specifics. As long as you are covering your costs and not spending money/losing money to support your volunteers' parts habit, I don't suspect there is a problem. It is the mission of most of our project to provide for the safe and affordable repair of bicycles and to encourage mechanical self-reliance etc etc and cheap parts are a big part of this.
josh
On Tue, Nov 18, 2008 at 1:29 PM, Jonathan Morrison < jonathan@slcbikecollective.org> wrote:
Sadly, with a good lawyer you can do anything you want, sadly even illegal activities. Pretty sad isn't it? Sader still, if you don't have a good lawyer I would play it safe and not do anything that might _force_ you to get a good lawyer.
Smile!
To figure out what to do to play it safe, contact the agency you filed as a "Member owned Co-operative" with such as the California Secretary of State. If you are a 501(c)(3) non-profit than contact the IRS. Calls can be anonymous.
I would also ask established local "member owned cooperatives" what they do.
-- Sincerely,
Jonathan Morrison Executive Director Salt Lake City Bicycle Collective 2312 S. West Temple Salt Lake City, UT 84115 w: 801-328-2453 c: 801-688-0183 f: 801-466-3856 www.slcbikecollective.org
Get Addicted to Crank! http://www.slcbikecollective.org/crank/
The mission of the Salt Lake City Bicycle Collective is to promote cycling as an effective and sustainable form of transportation and as a cornerstone of a cleaner, healthier, and safer society. The Bicycle Collective provides refurbished bicycles and educational programs to the community, focusing on children and lower income households.
On Tue, Nov 18, 2008 at 12:40 PM, GetGern@gmail.com wrote:
Hello Bike Friends, Does anyone have solid advice on the legality/Restrictions regarding discounts given to member/volunteers? We are a California regestered incorperated Member owned Co-operative, not a Non-Profit(501c3). We want to give a discount, but I heard it may not be legal. I hope that it is illegal referring to 501c3's. _______________________________________________ Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
--
Joshua Muir joshua@santacruzhub.org
Frances Cycles -- francescycles.com Handbuilt cycling framesets Touring, Track, Road,Cross, and Cycletrucks for hauling any distance
The Bicycle Church Collective Community Self-Service Cycle Repair 3pm to 7pm everyday except Sunday 703 Pacific Ave (enter on Spruce St) Santa Cruz, CA 95060 (831) 425-2453
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
One way that I am working on for our biodiesel cooperative ( www.greenguildbiodiesel.org) is to establish an umbrella nonprofit in which the coop is a program. We are currently putting together our 501c3 application, but I have spoken with a lawyer who focuses on coops and nonprofits. Its possible to have a coop that is a nonprofit but there are quite a few potential conflicts of interest that need to be addressed beforehand.
Let's take another tack at this issue - I don't have your legal answer, but this approach will probably get you into very safe territory.
As a non-profit, your organization has been granted special status to pursue your mission. Does providing discounts to members and volunteers fulfill your mission? No. In fact, rewarding your members and volunteers goes against the intention and spirit of the charter of your organizations - which is to pursue your mission rather than create value for your board and membership. We are not buying clubs, we are non-profits. If you follow this logic, you will have nothing to worry about, there will be no question to your intent. IF you get audited, and you follow this approach, you will have nothing to explain. If you provide discounts, you are walking the fine line - the gray area of the law. Why take that chance?
Rather than giving discounts, you should ask members and volunteers to pay retail or better as support to the organization. Make this policy a badge of honor. Stand up and support everyone for doing 'the right thing'. If you loose volunteers because of this, they are not volunteers, they are profiteers. It's not about the money - or is it?
Just my 2 cents worth!
Wilbur Ince Sibley Bike Depot
Edward France wrote:
This question came up in our 'Getting Incorporated -paperwork to get legit' and it almost seems like paranoia to me and the bici crew in santa barbara. We give volunteer discounts, but we still make a slight amount of profit in the transaction, just like any other shop would offer an employee discount. In a very real sense our volunteers are employees, they simply don't get paid. In the classic non-profit perspective they are donating their time, and I can understand how the idea of quid pro quo (you do something for me, I do something for you) seems to invalidate that. One way to guard against that is to not give away the volunteer discount to quickly or easily. Based on the accounting and legal advice that we have sought with professionals, this is not a significant concern, in other words:
Don't trip.
I feel like other concerns such as paying sales tax and having insurance to prevent an accident from taking down your kitchen and other important neccessities of being a legal entity are far more important concerns. If your collective is currently being reviewed and scrutinized for acceptance as your own 501(c)3 then perhaps board members shouldn't be recieving anything that could look like a kick-back. Even still I'm not convinced that discount pricing to someone involved in an industry, even the not for profit side of an industry, is at all a kick-back. If you volunteered in an orchard should you pay whole foods prices for peices of fruit?
Obviously to the general public new items you sell should be sold at fair retail value otherwise your organization would be using it's non-profit status to undercut local business. those who significantly contribute hours in an endevor, however, aren't members of the general public. They are part of a team that puts a lot of work into making their shop happen. A (in the scheme of things) minor discount as a perk for significant involvement certainly seems fair and, in our opinion, can be justified as legal.
If you live in California, however, any discount purchases should still include sales tax as they are still a taxable transaction, used or new.
-Ed bici Centro Santa Barbara On Tue, Nov 18, 2008 at 1:51 PM, joshua muir <muirjoshua@gmail.com mailto:muirjoshua@gmail.com> wrote:
I haven't heard any conflicts along such lines other than those with neighboring retailers. The result then is that it gets harder and harder for community projects to get QBP accounts. As far as taxes are concerned, I am not sure of the specifics. As long as you are covering your costs and not spending money/losing money to support your volunteers' parts habit, I don't suspect there is a problem. It is the mission of most of our project to provide for the safe and affordable repair of bicycles and to encourage mechanical self-reliance etc etc and cheap parts are a big part of this. josh On Tue, Nov 18, 2008 at 1:29 PM, Jonathan Morrison <jonathan@slcbikecollective.org <mailto:jonathan@slcbikecollective.org>> wrote: Sadly, with a good lawyer you can do anything you want, sadly even illegal activities. Pretty sad isn't it? Sader still, if you don't have a good lawyer I would play it safe and not do anything that might _force_ you to get a good lawyer. Smile! To figure out what to do to play it safe, contact the agency you filed as a "Member owned Co-operative" with such as the California Secretary of State. If you are a 501(c)(3) non-profit than contact the IRS. Calls can be anonymous. I would also ask established local "member owned cooperatives" what they do. -- Sincerely, Jonathan Morrison Executive Director Salt Lake City Bicycle Collective 2312 S. West Temple Salt Lake City, UT 84115 w: 801-328-2453 c: 801-688-0183 f: 801-466-3856 www.slcbikecollective.org <http://www.slcbikecollective.org/> Get Addicted to Crank! http://www.slcbikecollective.org/crank/ The mission of the Salt Lake City Bicycle Collective is to promote cycling as an effective and sustainable form of transportation and as a cornerstone of a cleaner, healthier, and safer society. The Bicycle Collective provides refurbished bicycles and educational programs to the community, focusing on children and lower income households. On Tue, Nov 18, 2008 at 12:40 PM, <GetGern@gmail.com <mailto:GetGern@gmail.com>> wrote: Hello Bike Friends, Does anyone have solid advice on the legality/Restrictions regarding discounts given to member/volunteers? We are a California regestered incorperated Member owned Co-operative, not a Non-Profit(501c3). We want to give a discount, but I heard it may not be legal. I hope that it is illegal referring to 501c3's. _______________________________________________ Thethinktank mailing list Thethinktank@bikecollectives.org <mailto:Thethinktank@bikecollectives.org> To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org <mailto:TheThinkTank-leave@bikecollectives.org> To manage your subscription, plase visit: http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.org _______________________________________________ Thethinktank mailing list Thethinktank@bikecollectives.org <mailto:Thethinktank@bikecollectives.org> To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org <mailto:TheThinkTank-leave@bikecollectives.org> To manage your subscription, plase visit: http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.org -- Joshua Muir joshua@santacruzhub.org <mailto:joshua@santacruzhub.org> Frances Cycles -- francescycles.com <http://francescycles.com> Handbuilt cycling framesets Touring, Track, Road,Cross, and Cycletrucks for hauling any distance The Bicycle Church Collective Community Self-Service Cycle Repair 3pm to 7pm everyday except Sunday 703 Pacific Ave (enter on Spruce St) Santa Cruz, CA 95060 (831) 425-2453 _______________________________________________ Thethinktank mailing list Thethinktank@bikecollectives.org <mailto:Thethinktank@bikecollectives.org> To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org <mailto:TheThinkTank-leave@bikecollectives.org> To manage your subscription, plase visit: http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.org-- Ed France Bici Centro 601 E. Montecito St. Santa Barbara, Ca 93103 310 936 0857 Bici Centro is a project of the Santa Barbara Bicycle Coalition
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit: http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
Sorry for the confusion: Regarding discounts for volunteer/members @ The BikeRoWave Santa Monica. Wilbur, I understand your point of view, but, The BikeRoWave is an all volunteer/member owned incorperated co-operative. We are NOT a NON-Profit 501c3. We are incorperated as a for profit company, not a charity. We are all unpaid as well.
On Tue, Nov 18, 2008 at 2:46 PM, Wilbur Ince Wilbur@wilbur.us wrote:
Let's take another tack at this issue - I don't have your legal answer, but this approach will probably get you into very safe territory.
As a non-profit, your organization has been granted special status to pursue your mission. Does providing discounts to members and volunteers fulfill your mission? No. In fact, rewarding your members and volunteers goes against the intention and spirit of the charter of your organizations - which is to pursue your mission rather than create value for your board and membership. We are not buying clubs, we are non-profits. If you follow this logic, you will have nothing to worry about, there will be no question to your intent. IF you get audited, and you follow this approach, you will have nothing to explain. If you provide discounts, you are walking the fine line - the gray area of the law. Why take that chance?
Rather than giving discounts, you should ask members and volunteers to pay retail or better as support to the organization. Make this policy a badge of honor. Stand up and support everyone for doing 'the right thing'. If you loose volunteers because of this, they are not volunteers, they are profiteers. It's not about the money - or is it?
Just my 2 cents worth!
Wilbur Ince Sibley Bike Depot
Edward France wrote:
This question came up in our 'Getting Incorporated -paperwork to get legit' and it almost seems like paranoia to me and the bici crew in santa barbara. We give volunteer discounts, but we still make a slight amount of profit in the transaction, just like any other shop would offer an employee discount. In a very real sense our volunteers are employees, they simply don't get paid. In the classic non-profit perspective they are donating their time, and I can understand how the idea of quid pro quo (you do something for me, I do something for you) seems to invalidate that. One way to guard against that is to not give away the volunteer discount to quickly or easily. Based on the accounting and legal advice that we have sought with professionals, this is not a significant concern, in other words:
Don't trip.
I feel like other concerns such as paying sales tax and having insurance to prevent an accident from taking down your kitchen and other important neccessities of being a legal entity are far more important concerns. If your collective is currently being reviewed and scrutinized for acceptance as your own 501(c)3 then perhaps board members shouldn't be recieving anything that could look like a kick-back. Even still I'm not convinced that discount pricing to someone involved in an industry, even the not for profit side of an industry, is at all a kick-back. If you volunteered in an orchard should you pay whole foods prices for peices of fruit?
Obviously to the general public new items you sell should be sold at fair retail value otherwise your organization would be using it's non-profit status to undercut local business. those who significantly contribute hours in an endevor, however, aren't members of the general public. They are part of a team that puts a lot of work into making their shop happen. A (in the scheme of things) minor discount as a perk for significant involvement certainly seems fair and, in our opinion, can be justified as legal.
If you live in California, however, any discount purchases should still include sales tax as they are still a taxable transaction, used or new.
-Ed bici Centro Santa Barbara On Tue, Nov 18, 2008 at 1:51 PM, joshua muir muirjoshua@gmail.com wrote:
I haven't heard any conflicts along such lines other than those with neighboring retailers. The result then is that it gets harder and harder for community projects to get QBP accounts.
As far as taxes are concerned, I am not sure of the specifics. As long as you are covering your costs and not spending money/losing money to support your volunteers' parts habit, I don't suspect there is a problem. It is the mission of most of our project to provide for the safe and affordable repair of bicycles and to encourage mechanical self-reliance etc etc and cheap parts are a big part of this.
josh
On Tue, Nov 18, 2008 at 1:29 PM, Jonathan Morrison < jonathan@slcbikecollective.org> wrote:
Sadly, with a good lawyer you can do anything you want, sadly even illegal activities. Pretty sad isn't it? Sader still, if you don't have a good lawyer I would play it safe and not do anything that might _force_ you to get a good lawyer.
Smile!
To figure out what to do to play it safe, contact the agency you filed as a "Member owned Co-operative" with such as the California Secretary of State. If you are a 501(c)(3) non-profit than contact the IRS. Calls can be anonymous.
I would also ask established local "member owned cooperatives" what they do.
-- Sincerely,
Jonathan Morrison Executive Director Salt Lake City Bicycle Collective 2312 S. West Temple Salt Lake City, UT 84115 w: 801-328-2453 c: 801-688-0183 f: 801-466-3856 www.slcbikecollective.org
Get Addicted to Crank! http://www.slcbikecollective.org/crank/
The mission of the Salt Lake City Bicycle Collective is to promote cycling as an effective and sustainable form of transportation and as a cornerstone of a cleaner, healthier, and safer society. The Bicycle Collective provides refurbished bicycles and educational programs to the community, focusing on children and lower income households.
On Tue, Nov 18, 2008 at 12:40 PM, GetGern@gmail.com wrote:
Hello Bike Friends, Does anyone have solid advice on the legality/Restrictions regarding discounts given to member/volunteers? We are a California regestered incorperated Member owned Co-operative, not a Non-Profit(501c3). We want to give a discount, but I heard it may not be legal. I hope that it is illegal referring to 501c3's. _______________________________________________ Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
--
Joshua Muir joshua@santacruzhub.org
Frances Cycles -- francescycles.com Handbuilt cycling framesets Touring, Track, Road,Cross, and Cycletrucks for hauling any distance
The Bicycle Church Collective Community Self-Service Cycle Repair 3pm to 7pm everyday except Sunday 703 Pacific Ave (enter on Spruce St) Santa Cruz, CA 95060 (831) 425-2453
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
-- Ed France Bici Centro 601 E. Montecito St. Santa Barbara, Ca 93103 310 936 0857 Bici Centro is a project of the Santa Barbara Bicycle Coalition
Thethinktank mailing listThethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
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Gern, I believe it is KHS that has put this restriction on us. It is not "the law" per se that says we can't discount, however, we might be able to figure out whether it is legal fro KHS to put this restriction on us. Perhaps we should inquire about any policies from KHS regarding minimum pricing (to public) as well as employee discount. I'm sure they have a sheet of info they send all new clients.
Elizabeth
On Tue, Nov 18, 2008 at 3:05 PM, Gern Blanston getgern@gmail.com wrote:
Sorry for the confusion: Regarding discounts for volunteer/members @ The BikeRoWave Santa Monica. Wilbur, I understand your point of view, but, The BikeRoWave is an all volunteer/member owned incorperated co-operative. We are NOT a NON-Profit 501c3. We are incorperated as a for profit company, not a charity. We are all unpaid as well.
On Tue, Nov 18, 2008 at 2:46 PM, Wilbur Ince Wilbur@wilbur.us wrote:
Let's take another tack at this issue - I don't have your legal answer, but this approach will probably get you into very safe territory.
As a non-profit, your organization has been granted special status to pursue your mission. Does providing discounts to members and volunteers fulfill your mission? No. In fact, rewarding your members and volunteers goes against the intention and spirit of the charter of your organizations - which is to pursue your mission rather than create value for your board and membership. We are not buying clubs, we are non-profits. If you follow this logic, you will have nothing to worry about, there will be no question to your intent. IF you get audited, and you follow this approach, you will have nothing to explain. If you provide discounts, you are walking the fine line - the gray area of the law. Why take that chance?
Rather than giving discounts, you should ask members and volunteers to pay retail or better as support to the organization. Make this policy a badge of honor. Stand up and support everyone for doing 'the right thing'. If you loose volunteers because of this, they are not volunteers, they are profiteers. It's not about the money - or is it?
Just my 2 cents worth!
Wilbur Ince Sibley Bike Depot
Edward France wrote:
This question came up in our 'Getting Incorporated -paperwork to get legit' and it almost seems like paranoia to me and the bici crew in santa barbara. We give volunteer discounts, but we still make a slight amount of profit in the transaction, just like any other shop would offer an employee discount. In a very real sense our volunteers are employees, they simply don't get paid. In the classic non-profit perspective they are donating their time, and I can understand how the idea of quid pro quo (you do something for me, I do something for you) seems to invalidate that. One way to guard against that is to not give away the volunteer discount to quickly or easily. Based on the accounting and legal advice that we have sought with professionals, this is not a significant concern, in other words:
Don't trip.
I feel like other concerns such as paying sales tax and having insurance to prevent an accident from taking down your kitchen and other important neccessities of being a legal entity are far more important concerns. If your collective is currently being reviewed and scrutinized for acceptance as your own 501(c)3 then perhaps board members shouldn't be recieving anything that could look like a kick-back. Even still I'm not convinced that discount pricing to someone involved in an industry, even the not for profit side of an industry, is at all a kick-back. If you volunteered in an orchard should you pay whole foods prices for peices of fruit?
Obviously to the general public new items you sell should be sold at fair retail value otherwise your organization would be using it's non-profit status to undercut local business. those who significantly contribute hours in an endevor, however, aren't members of the general public. They are part of a team that puts a lot of work into making their shop happen. A (in the scheme of things) minor discount as a perk for significant involvement certainly seems fair and, in our opinion, can be justified as legal.
If you live in California, however, any discount purchases should still include sales tax as they are still a taxable transaction, used or new.
-Ed bici Centro Santa Barbara On Tue, Nov 18, 2008 at 1:51 PM, joshua muir muirjoshua@gmail.comwrote:
I haven't heard any conflicts along such lines other than those with neighboring retailers. The result then is that it gets harder and harder for community projects to get QBP accounts.
As far as taxes are concerned, I am not sure of the specifics. As long as you are covering your costs and not spending money/losing money to support your volunteers' parts habit, I don't suspect there is a problem. It is the mission of most of our project to provide for the safe and affordable repair of bicycles and to encourage mechanical self-reliance etc etc and cheap parts are a big part of this.
josh
On Tue, Nov 18, 2008 at 1:29 PM, Jonathan Morrison < jonathan@slcbikecollective.org> wrote:
Sadly, with a good lawyer you can do anything you want, sadly even illegal activities. Pretty sad isn't it? Sader still, if you don't have a good lawyer I would play it safe and not do anything that might _force_ you to get a good lawyer.
Smile!
To figure out what to do to play it safe, contact the agency you filed as a "Member owned Co-operative" with such as the California Secretary of State. If you are a 501(c)(3) non-profit than contact the IRS. Calls can be anonymous.
I would also ask established local "member owned cooperatives" what they do.
-- Sincerely,
Jonathan Morrison Executive Director Salt Lake City Bicycle Collective 2312 S. West Temple Salt Lake City, UT 84115 w: 801-328-2453 c: 801-688-0183 f: 801-466-3856 www.slcbikecollective.org
Get Addicted to Crank! http://www.slcbikecollective.org/crank/
The mission of the Salt Lake City Bicycle Collective is to promote cycling as an effective and sustainable form of transportation and as a cornerstone of a cleaner, healthier, and safer society. The Bicycle Collective provides refurbished bicycles and educational programs to the community, focusing on children and lower income households.
On Tue, Nov 18, 2008 at 12:40 PM, GetGern@gmail.com wrote:
Hello Bike Friends, Does anyone have solid advice on the legality/Restrictions regarding discounts given to member/volunteers? We are a California regestered incorperated Member owned Co-operative, not a Non-Profit(501c3). We want to give a discount, but I heard it may not be legal. I hope that it is illegal referring to 501c3's. _______________________________________________ Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
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--
Joshua Muir joshua@santacruzhub.org
Frances Cycles -- francescycles.com Handbuilt cycling framesets Touring, Track, Road,Cross, and Cycletrucks for hauling any distance
The Bicycle Church Collective Community Self-Service Cycle Repair 3pm to 7pm everyday except Sunday 703 Pacific Ave (enter on Spruce St) Santa Cruz, CA 95060 (831) 425-2453
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
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-- Ed France Bici Centro 601 E. Montecito St. Santa Barbara, Ca 93103 310 936 0857 Bici Centro is a project of the Santa Barbara Bicycle Coalition
Thethinktank mailing listThethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
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Ooops, I meant to send this to Gern directly. Please disregard!
Elizabeth
On Tue, Nov 18, 2008 at 4:55 PM, Elizabeth Hunter ehhunter@hotmail.comwrote:
Gern, I believe it is KHS that has put this restriction on us. It is not "the law" per se that says we can't discount, however, we might be able to figure out whether it is legal fro KHS to put this restriction on us. Perhaps we should inquire about any policies from KHS regarding minimum pricing (to public) as well as employee discount. I'm sure they have a sheet of info they send all new clients.
Elizabeth
On Tue, Nov 18, 2008 at 3:05 PM, Gern Blanston getgern@gmail.com wrote:
Sorry for the confusion: Regarding discounts for volunteer/members @ The BikeRoWave Santa Monica. Wilbur, I understand your point of view, but, The BikeRoWave is an all volunteer/member owned incorperated co-operative. We are NOT a NON-Profit 501c3. We are incorperated as a for profit company, not a charity. We are all unpaid as well.
On Tue, Nov 18, 2008 at 2:46 PM, Wilbur Ince Wilbur@wilbur.us wrote:
Let's take another tack at this issue - I don't have your legal answer, but this approach will probably get you into very safe territory.
As a non-profit, your organization has been granted special status to pursue your mission. Does providing discounts to members and volunteers fulfill your mission? No. In fact, rewarding your members and volunteers goes against the intention and spirit of the charter of your organizations - which is to pursue your mission rather than create value for your board and membership. We are not buying clubs, we are non-profits. If you follow this logic, you will have nothing to worry about, there will be no question to your intent. IF you get audited, and you follow this approach, you will have nothing to explain. If you provide discounts, you are walking the fine line - the gray area of the law. Why take that chance?
Rather than giving discounts, you should ask members and volunteers to pay retail or better as support to the organization. Make this policy a badge of honor. Stand up and support everyone for doing 'the right thing'. If you loose volunteers because of this, they are not volunteers, they are profiteers. It's not about the money - or is it?
Just my 2 cents worth!
Wilbur Ince Sibley Bike Depot
Edward France wrote:
This question came up in our 'Getting Incorporated -paperwork to get legit' and it almost seems like paranoia to me and the bici crew in santa barbara. We give volunteer discounts, but we still make a slight amount of profit in the transaction, just like any other shop would offer an employee discount. In a very real sense our volunteers are employees, they simply don't get paid. In the classic non-profit perspective they are donating their time, and I can understand how the idea of quid pro quo (you do something for me, I do something for you) seems to invalidate that. One way to guard against that is to not give away the volunteer discount to quickly or easily. Based on the accounting and legal advice that we have sought with professionals, this is not a significant concern, in other words:
Don't trip.
I feel like other concerns such as paying sales tax and having insurance to prevent an accident from taking down your kitchen and other important neccessities of being a legal entity are far more important concerns. If your collective is currently being reviewed and scrutinized for acceptance as your own 501(c)3 then perhaps board members shouldn't be recieving anything that could look like a kick-back. Even still I'm not convinced that discount pricing to someone involved in an industry, even the not for profit side of an industry, is at all a kick-back. If you volunteered in an orchard should you pay whole foods prices for peices of fruit?
Obviously to the general public new items you sell should be sold at fair retail value otherwise your organization would be using it's non-profit status to undercut local business. those who significantly contribute hours in an endevor, however, aren't members of the general public. They are part of a team that puts a lot of work into making their shop happen. A (in the scheme of things) minor discount as a perk for significant involvement certainly seems fair and, in our opinion, can be justified as legal.
If you live in California, however, any discount purchases should still include sales tax as they are still a taxable transaction, used or new.
-Ed bici Centro Santa Barbara On Tue, Nov 18, 2008 at 1:51 PM, joshua muir muirjoshua@gmail.comwrote:
I haven't heard any conflicts along such lines other than those with neighboring retailers. The result then is that it gets harder and harder for community projects to get QBP accounts.
As far as taxes are concerned, I am not sure of the specifics. As long as you are covering your costs and not spending money/losing money to support your volunteers' parts habit, I don't suspect there is a problem. It is the mission of most of our project to provide for the safe and affordable repair of bicycles and to encourage mechanical self-reliance etc etc and cheap parts are a big part of this.
josh
On Tue, Nov 18, 2008 at 1:29 PM, Jonathan Morrison < jonathan@slcbikecollective.org> wrote:
Sadly, with a good lawyer you can do anything you want, sadly even illegal activities. Pretty sad isn't it? Sader still, if you don't have a good lawyer I would play it safe and not do anything that might _force_ you to get a good lawyer.
Smile!
To figure out what to do to play it safe, contact the agency you filed as a "Member owned Co-operative" with such as the California Secretary of State. If you are a 501(c)(3) non-profit than contact the IRS. Calls can be anonymous.
I would also ask established local "member owned cooperatives" what they do.
-- Sincerely,
Jonathan Morrison Executive Director Salt Lake City Bicycle Collective 2312 S. West Temple Salt Lake City, UT 84115 w: 801-328-2453 c: 801-688-0183 f: 801-466-3856 www.slcbikecollective.org
Get Addicted to Crank! http://www.slcbikecollective.org/crank/
The mission of the Salt Lake City Bicycle Collective is to promote cycling as an effective and sustainable form of transportation and as a cornerstone of a cleaner, healthier, and safer society. The Bicycle Collective provides refurbished bicycles and educational programs to the community, focusing on children and lower income households.
On Tue, Nov 18, 2008 at 12:40 PM, GetGern@gmail.com wrote:
Hello Bike Friends, Does anyone have solid advice on the legality/Restrictions regarding discounts given to member/volunteers? We are a California regestered incorperated Member owned Co-operative, not a Non-Profit(501c3). We want to give a discount, but I heard it may not be legal. I hope that it is illegal referring to 501c3's. _______________________________________________ Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
--
Joshua Muir joshua@santacruzhub.org
Frances Cycles -- francescycles.com Handbuilt cycling framesets Touring, Track, Road,Cross, and Cycletrucks for hauling any distance
The Bicycle Church Collective Community Self-Service Cycle Repair 3pm to 7pm everyday except Sunday 703 Pacific Ave (enter on Spruce St) Santa Cruz, CA 95060 (831) 425-2453
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
-- Ed France Bici Centro 601 E. Montecito St. Santa Barbara, Ca 93103 310 936 0857 Bici Centro is a project of the Santa Barbara Bicycle Coalition
Thethinktank mailing listThethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
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Is there someone from Neighborhood Bike Works in Philly that could chime in on this? I remember reading on the Wiki that volunteers at the Bike Church can order parts at a discount.
UBP is in the process of getting an account to:
1.) Have cheap access to parts to serve our kids (who pay no money) and to refurbish bicycles which are sold for cheap to the public. 2.) Have easier access to chains, tires, tubes, lights, locks etc. to sell to the general public (we currently get our stuff at a *slight* discount from a bike shop) and finally 3.) Offer discounts to volunteers.
I believe #3 directly affects our mission in that by offering discounts, we keep volunteers happy who are otherwise not compensated at all for their massive effort, which without, we would be unable to accomplish anything at all. These are folks with paid employment that sacrifice a lot of free time from life and family to work in our shops and I think it's perfectly reasonable and within bounds of our non-profit status to give them something back. Mind you, they'll still be paying wholesale plus 10 or 20% or whatever it is, so the shop gets a little money as well (maybe offsetting shipping costs on normal shop orders etc.).
Brian
On Tue, Nov 18, 2008 at 7:56 PM, Elizabeth Hunter ehhunter@hotmail.comwrote:
Ooops, I meant to send this to Gern directly. Please disregard!
Elizabeth
On Tue, Nov 18, 2008 at 4:55 PM, Elizabeth Hunter ehhunter@hotmail.comwrote:
Gern, I believe it is KHS that has put this restriction on us. It is not "the law" per se that says we can't discount, however, we might be able to figure out whether it is legal fro KHS to put this restriction on us. Perhaps we should inquire about any policies from KHS regarding minimum pricing (to public) as well as employee discount. I'm sure they have a sheet of info they send all new clients.
Elizabeth
On Tue, Nov 18, 2008 at 3:05 PM, Gern Blanston getgern@gmail.com wrote:
Sorry for the confusion: Regarding discounts for volunteer/members @ The BikeRoWave Santa Monica. Wilbur, I understand your point of view, but, The BikeRoWave is an all volunteer/member owned incorperated co-operative. We are NOT a NON-Profit 501c3. We are incorperated as a for profit company, not a charity. We are all unpaid as well.
On Tue, Nov 18, 2008 at 2:46 PM, Wilbur Ince Wilbur@wilbur.us wrote:
Let's take another tack at this issue - I don't have your legal answer, but this approach will probably get you into very safe territory.
As a non-profit, your organization has been granted special status to pursue your mission. Does providing discounts to members and volunteers fulfill your mission? No. In fact, rewarding your members and volunteers goes against the intention and spirit of the charter of your organizations - which is to pursue your mission rather than create value for your board and membership. We are not buying clubs, we are non-profits. If you follow this logic, you will have nothing to worry about, there will be no question to your intent. IF you get audited, and you follow this approach, you will have nothing to explain. If you provide discounts, you are walking the fine line - the gray area of the law. Why take that chance?
Rather than giving discounts, you should ask members and volunteers to pay retail or better as support to the organization. Make this policy a badge of honor. Stand up and support everyone for doing 'the right thing'. If you loose volunteers because of this, they are not volunteers, they are profiteers. It's not about the money - or is it?
Just my 2 cents worth!
Wilbur Ince Sibley Bike Depot
Edward France wrote:
This question came up in our 'Getting Incorporated -paperwork to get legit' and it almost seems like paranoia to me and the bici crew in santa barbara. We give volunteer discounts, but we still make a slight amount of profit in the transaction, just like any other shop would offer an employee discount. In a very real sense our volunteers are employees, they simply don't get paid. In the classic non-profit perspective they are donating their time, and I can understand how the idea of quid pro quo (you do something for me, I do something for you) seems to invalidate that. One way to guard against that is to not give away the volunteer discount to quickly or easily. Based on the accounting and legal advice that we have sought with professionals, this is not a significant concern, in other words:
Don't trip.
I feel like other concerns such as paying sales tax and having insurance to prevent an accident from taking down your kitchen and other important neccessities of being a legal entity are far more important concerns. If your collective is currently being reviewed and scrutinized for acceptance as your own 501(c)3 then perhaps board members shouldn't be recieving anything that could look like a kick-back. Even still I'm not convinced that discount pricing to someone involved in an industry, even the not for profit side of an industry, is at all a kick-back. If you volunteered in an orchard should you pay whole foods prices for peices of fruit?
Obviously to the general public new items you sell should be sold at fair retail value otherwise your organization would be using it's non-profit status to undercut local business. those who significantly contribute hours in an endevor, however, aren't members of the general public. They are part of a team that puts a lot of work into making their shop happen. A (in the scheme of things) minor discount as a perk for significant involvement certainly seems fair and, in our opinion, can be justified as legal.
If you live in California, however, any discount purchases should still include sales tax as they are still a taxable transaction, used or new.
-Ed bici Centro Santa Barbara On Tue, Nov 18, 2008 at 1:51 PM, joshua muir muirjoshua@gmail.comwrote:
I haven't heard any conflicts along such lines other than those with neighboring retailers. The result then is that it gets harder and harder for community projects to get QBP accounts.
As far as taxes are concerned, I am not sure of the specifics. As long as you are covering your costs and not spending money/losing money to support your volunteers' parts habit, I don't suspect there is a problem. It is the mission of most of our project to provide for the safe and affordable repair of bicycles and to encourage mechanical self-reliance etc etc and cheap parts are a big part of this.
josh
On Tue, Nov 18, 2008 at 1:29 PM, Jonathan Morrison < jonathan@slcbikecollective.org> wrote:
Sadly, with a good lawyer you can do anything you want, sadly even illegal activities. Pretty sad isn't it? Sader still, if you don't have a good lawyer I would play it safe and not do anything that might _force_ you to get a good lawyer.
Smile!
To figure out what to do to play it safe, contact the agency you filed as a "Member owned Co-operative" with such as the California Secretary of State. If you are a 501(c)(3) non-profit than contact the IRS. Calls can be anonymous.
I would also ask established local "member owned cooperatives" what they do.
-- Sincerely,
Jonathan Morrison Executive Director Salt Lake City Bicycle Collective 2312 S. West Temple Salt Lake City, UT 84115 w: 801-328-2453 c: 801-688-0183 f: 801-466-3856 www.slcbikecollective.org
Get Addicted to Crank! http://www.slcbikecollective.org/crank/
The mission of the Salt Lake City Bicycle Collective is to promote cycling as an effective and sustainable form of transportation and as a cornerstone of a cleaner, healthier, and safer society. The Bicycle Collective provides refurbished bicycles and educational programs to the community, focusing on children and lower income households.
On Tue, Nov 18, 2008 at 12:40 PM, GetGern@gmail.com wrote:
> Hello Bike Friends, > Does anyone have solid advice on the legality/Restrictions regarding > discounts given to member/volunteers? > We are a California regestered incorperated Member owned > Co-operative, not a Non-Profit(501c3). We want to give a discount, but I > heard it may not be legal. I hope that it is illegal referring to 501c3's. > _______________________________________________ > Thethinktank mailing list > Thethinktank@bikecollectives.org > To unsubscribe, send a blank email to > TheThinkTank-leave@bikecollectives.org > To manage your subscription, plase visit: > > http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o... > >
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
--
Joshua Muir joshua@santacruzhub.org
Frances Cycles -- francescycles.com Handbuilt cycling framesets Touring, Track, Road,Cross, and Cycletrucks for hauling any distance
The Bicycle Church Collective Community Self-Service Cycle Repair 3pm to 7pm everyday except Sunday 703 Pacific Ave (enter on Spruce St) Santa Cruz, CA 95060 (831) 425-2453
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
-- Ed France Bici Centro 601 E. Montecito St. Santa Barbara, Ca 93103 310 936 0857 Bici Centro is a project of the Santa Barbara Bicycle Coalition
Thethinktank mailing listThethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
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Brian's #3 analysis is exactly the same as what our (California non-profit specializing) CPA said.
Dave Bourgeois Bici Centro of Santa Barbara
On Wed, Nov 19, 2008 at 8:23 AM, Urban Bike Project Wilmington, DE urbanbikeproject@gmail.com wrote:
Is there someone from Neighborhood Bike Works in Philly that could chime in on this? I remember reading on the Wiki that volunteers at the Bike Church can order parts at a discount.
UBP is in the process of getting an account to:
1.) Have cheap access to parts to serve our kids (who pay no money) and to refurbish bicycles which are sold for cheap to the public. 2.) Have easier access to chains, tires, tubes, lights, locks etc. to sell to the general public (we currently get our stuff at a slight discount from a bike shop) and finally 3.) Offer discounts to volunteers.
I believe #3 directly affects our mission in that by offering discounts, we keep volunteers happy who are otherwise not compensated at all for their massive effort, which without, we would be unable to accomplish anything at all. These are folks with paid employment that sacrifice a lot of free time from life and family to work in our shops and I think it's perfectly reasonable and within bounds of our non-profit status to give them something back. Mind you, they'll still be paying wholesale plus 10 or 20% or whatever it is, so the shop gets a little money as well (maybe offsetting shipping costs on normal shop orders etc.).
Brian
On Tue, Nov 18, 2008 at 7:56 PM, Elizabeth Hunter ehhunter@hotmail.com wrote:
Ooops, I meant to send this to Gern directly. Please disregard!
Elizabeth
On Tue, Nov 18, 2008 at 4:55 PM, Elizabeth Hunter ehhunter@hotmail.com wrote:
Gern, I believe it is KHS that has put this restriction on us. It is not "the law" per se that says we can't discount, however, we might be able to figure out whether it is legal fro KHS to put this restriction on us. Perhaps we should inquire about any policies from KHS regarding minimum pricing (to public) as well as employee discount. I'm sure they have a sheet of info they send all new clients.
Elizabeth
On Tue, Nov 18, 2008 at 3:05 PM, Gern Blanston getgern@gmail.com wrote:
Sorry for the confusion: Regarding discounts for volunteer/members @ The BikeRoWave Santa Monica. Wilbur, I understand your point of view, but, The BikeRoWave is an all volunteer/member owned incorperated co-operative. We are NOT a NON-Profit 501c3. We are incorperated as a for profit company, not a charity. We are all unpaid as well.
On Tue, Nov 18, 2008 at 2:46 PM, Wilbur Ince Wilbur@wilbur.us wrote:
Let's take another tack at this issue - I don't have your legal answer, but this approach will probably get you into very safe territory.
As a non-profit, your organization has been granted special status to pursue your mission. Does providing discounts to members and volunteers fulfill your mission? No. In fact, rewarding your members and volunteers goes against the intention and spirit of the charter of your organizations - which is to pursue your mission rather than create value for your board and membership. We are not buying clubs, we are non-profits. If you follow this logic, you will have nothing to worry about, there will be no question to your intent. IF you get audited, and you follow this approach, you will have nothing to explain. If you provide discounts, you are walking the fine line - the gray area of the law. Why take that chance?
Rather than giving discounts, you should ask members and volunteers to pay retail or better as support to the organization. Make this policy a badge of honor. Stand up and support everyone for doing 'the right thing'. If you loose volunteers because of this, they are not volunteers, they are profiteers. It's not about the money - or is it?
Just my 2 cents worth!
Wilbur Ince Sibley Bike Depot
Edward France wrote:
This question came up in our 'Getting Incorporated -paperwork to get legit' and it almost seems like paranoia to me and the bici crew in santa barbara. We give volunteer discounts, but we still make a slight amount of profit in the transaction, just like any other shop would offer an employee discount. In a very real sense our volunteers are employees, they simply don't get paid. In the classic non-profit perspective they are donating their time, and I can understand how the idea of quid pro quo (you do something for me, I do something for you) seems to invalidate that. One way to guard against that is to not give away the volunteer discount to quickly or easily. Based on the accounting and legal advice that we have sought with professionals, this is not a significant concern, in other words:
Don't trip.
I feel like other concerns such as paying sales tax and having insurance to prevent an accident from taking down your kitchen and other important neccessities of being a legal entity are far more important concerns. If your collective is currently being reviewed and scrutinized for acceptance as your own 501(c)3 then perhaps board members shouldn't be recieving anything that could look like a kick-back. Even still I'm not convinced that discount pricing to someone involved in an industry, even the not for profit side of an industry, is at all a kick-back. If you volunteered in an orchard should you pay whole foods prices for peices of fruit?
Obviously to the general public new items you sell should be sold at fair retail value otherwise your organization would be using it's non-profit status to undercut local business. those who significantly contribute hours in an endevor, however, aren't members of the general public. They are part of a team that puts a lot of work into making their shop happen. A (in the scheme of things) minor discount as a perk for significant involvement certainly seems fair and, in our opinion, can be justified as legal.
If you live in California, however, any discount purchases should still include sales tax as they are still a taxable transaction, used or new.
-Ed bici Centro Santa Barbara On Tue, Nov 18, 2008 at 1:51 PM, joshua muir muirjoshua@gmail.com wrote:
I haven't heard any conflicts along such lines other than those with neighboring retailers. The result then is that it gets harder and harder for community projects to get QBP accounts.
As far as taxes are concerned, I am not sure of the specifics. As long as you are covering your costs and not spending money/losing money to support your volunteers' parts habit, I don't suspect there is a problem. It is the mission of most of our project to provide for the safe and affordable repair of bicycles and to encourage mechanical self-reliance etc etc and cheap parts are a big part of this.
josh
On Tue, Nov 18, 2008 at 1:29 PM, Jonathan Morrison jonathan@slcbikecollective.org wrote: > > Sadly, with a good lawyer you can do anything you want, sadly even > illegal activities. Pretty sad isn't it? Sader still, if you don't have a > good lawyer I would play it safe and not do anything that might _force_ you > to get a good lawyer. > > Smile! > > To figure out what to do to play it safe, contact the agency you > filed as a "Member owned Co-operative" with such as the California Secretary > of State. If you are a 501(c)(3) non-profit than contact the IRS. Calls > can be anonymous. > > I would also ask established local "member owned cooperatives" what > they do. > -- > Sincerely, > > Jonathan Morrison > Executive Director > Salt Lake City Bicycle Collective > 2312 S. West Temple > Salt Lake City, UT 84115 > w: 801-328-2453 > c: 801-688-0183 > f: 801-466-3856 > www.slcbikecollective.org > > Get Addicted to Crank! > http://www.slcbikecollective.org/crank/ > > The mission of the Salt Lake City Bicycle Collective is to promote > cycling as an effective and sustainable form of transportation and as a > cornerstone of a cleaner, healthier, and safer society. The Bicycle > Collective provides refurbished bicycles and educational programs to the > community, focusing on children and lower income households. > > > On Tue, Nov 18, 2008 at 12:40 PM, GetGern@gmail.com wrote: >> >> Hello Bike Friends, >> Does anyone have solid advice on the legality/Restrictions regarding >> discounts given to member/volunteers? >> We are a California regestered incorperated Member owned >> Co-operative, not a Non-Profit(501c3). We want to give a discount, but I >> heard it may not be legal. I hope that it is illegal referring to 501c3's. >> _______________________________________________ >> Thethinktank mailing list >> Thethinktank@bikecollectives.org >> To unsubscribe, send a blank email to >> TheThinkTank-leave@bikecollectives.org >> To manage your subscription, plase visit: >> >> http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o... >> > > > > > _______________________________________________ > Thethinktank mailing list > Thethinktank@bikecollectives.org > To unsubscribe, send a blank email to > TheThinkTank-leave@bikecollectives.org > To manage your subscription, plase visit: > > http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o... >
--
Joshua Muir joshua@santacruzhub.org
Frances Cycles -- francescycles.com Handbuilt cycling framesets Touring, Track, Road,Cross, and Cycletrucks for hauling any distance
The Bicycle Church Collective Community Self-Service Cycle Repair 3pm to 7pm everyday except Sunday 703 Pacific Ave (enter on Spruce St) Santa Cruz, CA 95060 (831) 425-2453
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
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-- Ed France Bici Centro 601 E. Montecito St. Santa Barbara, Ca 93103 310 936 0857 Bici Centro is a project of the Santa Barbara Bicycle Coalition
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-- Urban Bike Project of Wilmington -a 501(c)3 non-profit bike shop- 1908 N. Market Street (entrance is in the parking lot behind the building) Wilmington, DE 19801
Hours: Thursday 6:30-9:00 Saturday 1:00-4:00
Visit us online at http://urbanbikeproject.org
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THE QUESTION IS NOT UNDERSTOOD BIKE-RO-WAVE is NOT a NON PROFIT !!!!? IT is a NOT FOR PROFIT member owned co op please reset and try this thread again
Still painting the roads Jim
--- On Tue, 11/18/08, Wilbur Ince Wilbur@Wilbur.us wrote:
From: Wilbur Ince Wilbur@Wilbur.us Subject: Re: [TheThinkTank] Discounts for Co-ops To: "The Think Tank" thethinktank@bikecollectives.org Date: Tuesday, November 18, 2008, 2:46 PM
Let's take another tack at this issue - I don't have your legal answer, but this approach will probably get you into very safe territory.
As a non-profit, your organization has been granted special status to pursue your mission. Does providing discounts to members and volunteers fulfill your mission? No. In fact, rewarding your members and volunteers goes against the intention and spirit of the charter of your organizations - which is to pursue your mission rather than create value for your board and membership. We are not buying clubs, we are non-profits. If you follow this logic, you will have nothing to worry about, there will be no question to your intent. IF you get audited, and you follow this approach, you will have nothing to explain. If you provide discounts, you are walking the fine line - the gray area of the law. Why take that chance?
Rather than giving discounts, you should ask members and volunteers to pay retail or better as support to the organization. Make this policy a badge of honor. Stand up and support everyone for doing 'the right thing'. If you loose volunteers because of this, they are not volunteers, they are profiteers. It's not about the money - or is it?
Just my 2 cents worth!
Wilbur Ince Sibley Bike Depot
Edward France wrote: This question came up in our 'Getting Incorporated -paperwork to get legit' and it almost seems like paranoia to me and the bici crew in santa barbara. We give volunteer discounts, but we still make a slight amount of profit in the transaction, just like any other shop would offer an employee discount. In a very real sense our volunteers are employees, they simply don't get paid. In the classic non-profit perspective they are donating their time, and I can understand how the idea of quid pro quo (you do something for me, I do something for you) seems to invalidate that. One way to guard against that is to not give away the volunteer discount to quickly or easily. Based on the accounting and legal advice that we have sought with professionals, this is not a significant concern, in other words:
Don't trip.
I feel like other concerns such as paying sales tax and having insurance to prevent an accident from taking down your kitchen and other important neccessities of being a legal entity are far more important concerns. If your collective is currently being reviewed and scrutinized for acceptance as your own 501(c)3 then perhaps board members shouldn't be recieving anything that could look like a kick-back. Even still I'm not convinced that discount pricing to someone involved in an industry, even the not for profit side of an industry, is at all a kick-back. If you volunteered in an orchard should you pay whole foods prices for peices of fruit?
Obviously to the general public new items you sell should be sold at fair retail value otherwise your organization would be using it's non-profit status to undercut local business. those who significantly contribute hours in an endevor, however, aren't members of the general public. They are part of a team that puts a lot of work into making their shop happen. A (in the scheme of things) minor discount as a perk for significant involvement certainly seems fair and, in our opinion, can be justified as legal.
If you live in California, however, any discount purchases should still include sales tax as they are still a taxable transaction, used or new.
-Ed bici Centro Santa Barbara
On Tue, Nov 18, 2008 at 1:51 PM, joshua muir muirjoshua@gmail.com wrote:
I haven't heard any conflicts along such lines other than those with neighboring retailers. The result then is that it gets harder and harder for community projects to get QBP accounts.
As far as taxes are concerned, I am not sure of the specifics. As long as you are covering your costs and not spending money/losing money to support your volunteers' parts habit, I don't suspect there is a problem. It is the mission of most of our project to provide for the safe and affordable repair of bicycles and to encourage mechanical self-reliance etc etc and cheap parts are a big part of this.
josh
On Tue, Nov 18, 2008 at 1:29 PM, Jonathan Morrison jonathan@slcbikecollective.org wrote:
Sadly, with a good lawyer you can do anything you want, sadly even illegal activities. Pretty sad isn't it? Sader still, if you don't have a good lawyer I would play it safe and not do anything that might _force_ you to get a good lawyer. Smile! To figure out what to do to play it safe, contact the agency you filed as a "Member owned Co-operative" with such as the California Secretary of State. If you are a 501(c)(3) non-profit than contact the IRS. Calls can be anonymous. I would also ask established local "member owned cooperatives" what they do.
Josh,
How do community projects get QBP accounts? Every site we run into requires us to have a certain number of operating hours, where we can accept deliveries at our shop. Unfortunately, we are only open eight to ten hours a week. How do you do it?
Lucia MoBo Bicycle Co-op Cincinati, OH
On Tue, Nov 18, 2008 at 4:51 PM, joshua muir muirjoshua@gmail.com wrote:
I haven't heard any conflicts along such lines other than those with neighboring retailers. The result then is that it gets harder and harder for community projects to get QBP accounts.
As far as taxes are concerned, I am not sure of the specifics. As long as you are covering your costs and not spending money/losing money to support your volunteers' parts habit, I don't suspect there is a problem. It is the mission of most of our project to provide for the safe and affordable repair of bicycles and to encourage mechanical self-reliance etc etc and cheap parts are a big part of this.
josh
On Tue, Nov 18, 2008 at 1:29 PM, Jonathan Morrison < jonathan@slcbikecollective.org> wrote:
Sadly, with a good lawyer you can do anything you want, sadly even illegal activities. Pretty sad isn't it? Sader still, if you don't have a good lawyer I would play it safe and not do anything that might _force_ you to get a good lawyer.
Smile!
To figure out what to do to play it safe, contact the agency you filed as a "Member owned Co-operative" with such as the California Secretary of State. If you are a 501(c)(3) non-profit than contact the IRS. Calls can be anonymous.
I would also ask established local "member owned cooperatives" what they do.
-- Sincerely,
Jonathan Morrison Executive Director Salt Lake City Bicycle Collective 2312 S. West Temple Salt Lake City, UT 84115 w: 801-328-2453 c: 801-688-0183 f: 801-466-3856 www.slcbikecollective.org
Get Addicted to Crank! http://www.slcbikecollective.org/crank/
The mission of the Salt Lake City Bicycle Collective is to promote cycling as an effective and sustainable form of transportation and as a cornerstone of a cleaner, healthier, and safer society. The Bicycle Collective provides refurbished bicycles and educational programs to the community, focusing on children and lower income households.
On Tue, Nov 18, 2008 at 12:40 PM, GetGern@gmail.com wrote:
Hello Bike Friends, Does anyone have solid advice on the legality/Restrictions regarding discounts given to member/volunteers? We are a California regestered incorperated Member owned Co-operative, not a Non-Profit(501c3). We want to give a discount, but I heard it may not be legal. I hope that it is illegal referring to 501c3's. _______________________________________________ Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
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--
Joshua Muir joshua@santacruzhub.org
Frances Cycles -- francescycles.com Handbuilt cycling framesets Touring, Track, Road,Cross, and Cycletrucks for hauling any distance
The Bicycle Church Collective Community Self-Service Cycle Repair 3pm to 7pm everyday except Sunday 703 Pacific Ave (enter on Spruce St) Santa Cruz, CA 95060 (831) 425-2453
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lucia,
we've (community cycles in boulder) have an undogly amount of operating hours, and if i recall correctly, it was not as much of a hassle for us to get an account as i've heard it's been for other shops...
i have heard of smaller operations, those with fewer hours, or unable to get an account directly going to a friendly local retailer and piggybacking your orders onto their orders. someone else has already mentioned the danger of creating competition for local retailers, and at this point in the discussion, i think it warrants another mention.
On Tue, Nov 18, 2008 at 4:51 PM, MoBo Bicycle Co-op < mobobicyclecoop@gmail.com> wrote:
Josh,
How do community projects get QBP accounts? Every site we run into requires us to have a certain number of operating hours, where we can accept deliveries at our shop. Unfortunately, we are only open eight to ten hours a week. How do you do it?
Lucia MoBo Bicycle Co-op Cincinati, OH
On Tue, Nov 18, 2008 at 4:51 PM, joshua muir muirjoshua@gmail.com wrote:
I haven't heard any conflicts along such lines other than those with neighboring retailers. The result then is that it gets harder and harder for community projects to get QBP accounts.
As far as taxes are concerned, I am not sure of the specifics. As long as you are covering your costs and not spending money/losing money to support your volunteers' parts habit, I don't suspect there is a problem. It is the mission of most of our project to provide for the safe and affordable repair of bicycles and to encourage mechanical self-reliance etc etc and cheap parts are a big part of this.
josh
On Tue, Nov 18, 2008 at 1:29 PM, Jonathan Morrison < jonathan@slcbikecollective.org> wrote:
Sadly, with a good lawyer you can do anything you want, sadly even illegal activities. Pretty sad isn't it? Sader still, if you don't have a good lawyer I would play it safe and not do anything that might _force_ you to get a good lawyer.
Smile!
To figure out what to do to play it safe, contact the agency you filed as a "Member owned Co-operative" with such as the California Secretary of State. If you are a 501(c)(3) non-profit than contact the IRS. Calls can be anonymous.
I would also ask established local "member owned cooperatives" what they do.
-- Sincerely,
Jonathan Morrison Executive Director Salt Lake City Bicycle Collective 2312 S. West Temple Salt Lake City, UT 84115 w: 801-328-2453 c: 801-688-0183 f: 801-466-3856 www.slcbikecollective.org
Get Addicted to Crank! http://www.slcbikecollective.org/crank/
The mission of the Salt Lake City Bicycle Collective is to promote cycling as an effective and sustainable form of transportation and as a cornerstone of a cleaner, healthier, and safer society. The Bicycle Collective provides refurbished bicycles and educational programs to the community, focusing on children and lower income households.
On Tue, Nov 18, 2008 at 12:40 PM, GetGern@gmail.com wrote:
Hello Bike Friends, Does anyone have solid advice on the legality/Restrictions regarding discounts given to member/volunteers? We are a California regestered incorperated Member owned Co-operative, not a Non-Profit(501c3). We want to give a discount, but I heard it may not be legal. I hope that it is illegal referring to 501c3's. _______________________________________________ Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
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--
Joshua Muir joshua@santacruzhub.org
Frances Cycles -- francescycles.com Handbuilt cycling framesets Touring, Track, Road,Cross, and Cycletrucks for hauling any distance
The Bicycle Church Collective Community Self-Service Cycle Repair 3pm to 7pm everyday except Sunday 703 Pacific Ave (enter on Spruce St) Santa Cruz, CA 95060 (831) 425-2453
Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit:
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-- MoBo Bicycle Co-op a project of The Village Green Foundation 1415 Knowlton Ave Northside Cincinnati, OH
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Hey Gren, You guys are in the drivers seat. not being a non profit means that you can sell your stuff to your self for what ever you want to. Just be sure to keep track of your sales tax obligations?!!?! Jim --- On Tue, 11/18/08, GetGern@gmail.com GetGern@gmail.com wrote:
From: GetGern@gmail.com GetGern@gmail.com Subject: [TheThinkTank] Discounts for Co-ops To: "The Think Tank" thethinktank@bikecollectives.org Date: Tuesday, November 18, 2008, 11:40 AM
Hello Bike Friends, Does anyone have solid advice on the legality/Restrictions regarding discounts given to member/volunteers? We are a California regestered incorperated Member owned Co-operative, not a Non-Profit(501c3). We want to give a discount, but I heard it may not be legal. I hope that it is illegal referring to 501c3's._______________________________________________ Thethinktank mailing list Thethinktank@bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit: http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
participants (14)
-
adam schwartz -
Beth Wacks -
Dave Bourgeois -
Edward France -
Elizabeth Hunter -
Gern Blanston -
GetGern＠gmail.com
-
james blesdoe -
Jonathan Morrison -
joshua muir -
MoBo Bicycle Co-op -
Urban Bike Project Wilmington, DE -
veganboyjosh＠gmail.com -
Wilbur Ince