FAN Donations and Raising Money

FAN currently doesn’t have a bank account or take donations or money. I was hoping that we might want to change this. There are a lot of things that we could do with even small amounts of money collected that could help improve FAN. Currently, a few members pay for the forum hosting ($10/month) and the web hosting. It’d be great if we didn’t have that expense anymore. Beyond that we could gain more members with small amounts of money spent on advertising to targeted groups of people that might not ever hear about FAN otherwise in order to get them signed up and involved as members. Some places that we’ve wanted to have social hours at also require that we put some money down to make the reservation. We could use money to host events and have FAN parties in the future. This would also allow us to sell ad space in our newsletter.

If we did want to start doing this, what kind of donation policy do we want to have, if we want to have one? FAN is already accused by NIMBYs to be “funded by the Koch brothers” and other ridiculousness even without having any funding, money, or bank account in any way, so I don’t see a reason related to that to not have some mechanism for donations setup. A lot of neighborhood associations in Austin receive money from real estate agents, developers, etc. and have over $30,000 in the bank, like the Hyde Park Neighborhood Association. Having some kind of policy about who we accept money from might be a good idea though so there’s no serious person that would think we’re being influenced in any way for the things we advocate for.

This could also allow us to provide a great benefit to FAN NA members. FAN NA members could raise money without having to have their own bank accounts by depositing any money directly into FAN and having that money earmarked for their neighborhood. Forming their own non-profit, which can be complicated, expensive, and discourage new NAs from forming. FAN could provide this as a free benefit of being a FAN NA or could take a small percentage like 10% in order to cover costs associated with maintaining the accounts, etc. I know Friends of Hyde Park would love to have this benefit so our members can have some way to contribute and we can have some small amount of money to cover costs sometimes.

Most similar organizations have a membership fee to join in order to raise money. By donations I mean asking our members to contribute whatever they feel comfortable with as a donation when they sign up or ask once a year, but leave it completely optional. Membership fees are barriers to joining, but asking for a donation isn’t. People might also give more if they aren’t forced to and they can come back and donate something at a later time where they want.

Gut reaction - I would rather not have ANY pressure or expectations be put on FAN at large members regarding dues, so would prefer any statements on contribution opportunities be characterized accordingly

Ultimately we would like to see at-large members from an area come together to form member neighborhood associations - at that point is resources allow, a contribution would be welcomed. Starting up is a big task, and should be recognized as such.

I really like the idea of FAN being a conduit, taking a % to handle member NA’s funds (if any). In the Community Gardener space we do the same with Austin Parks Foundation. That would be a great service to provide the community, and in recognition of all the infrastructure support FAN has provided for JHCC and others, I do not see an issue with crowd sourcing JHCC to make a contribution to recognize same.

I agree. I wouldn’t want it to be perceived that we were pressuring people to make donations or anything. Maybe just having a link on our site that says “Donate” or “Contribute” or would all that we would need. Or we could possibly just post on facebook sometimes if there’s some kind of goal that we are trying to raise money for.

I think it would be a great idea to provide member NAs support if they need anything. That could be one of the things that we could use the % of money collected from the other member NAs or just from the contributions that we receive.

@Phil_Wiley Do you think JHCC would use the FAN account for their funds if that was an option? I think Friends of Hyde Park would. I don’t think we’d ever get to the point to where we were collecting money or raising money in any way otherwise and it’d be great to have that option.

@Pete_Gilcrease, the option to use FAN as a conduit for collecting donations and processing expenses has value in that it provides new possibilities. JHCC does not have any “funds”, none have been collected - people have contributed time and skills to get things set up, and I am remiss in keeping the website that we have for free through FAN partnership updated to best leverage all those contributions.

FAN support for that member NA website, and support for starting up a new NA have value. It is easy to justify recognizing that through a FAN contribution for those NA’s with the ability to do so…

As things progress it is easy to visualize scenarios where member NA’s have FAN as a “Treasuror” has value For a member NA to align with some non-profits to pursue a visible community sponsorship, there is a requirement that the check come from a non-profit account. Member NA’s may also want to sponsor some neighborhood activities that require funds, but have no way to do so currently, other than an individual funding it. I anticipate this to be a low volume high impact activity.

It is also likely to lead to a more transparent and fair outcome - in my small “neighborhood”, around $10,000 was spent to fund historic district work, which most did not support, and very few knew about, including myself, and I had done much earlier to support general fund collections. I don’t see that happening in a FAN NA, and we can better ensure it does not through checks and balances.

Since the topic of endorsing in upcoming City Council elections arose in another thread, what are the preclusions of taking donations vs dues and also being able to endorse candidates in official elections for the City?

@alyshalynn What’s standard in other organizations? I know most NA and other groups have dues, they also receive donations, and they also usually sell something that people could buy that could be considered contributing to the group. I looked over some bylaws of other groups and the only thing that I really see is that if someone has “any direct financial or material benefits from business before” the group, that person would recuse themselves from voting on the issue. Is there anything else that we would need to do beyond that?

I’m speaking about the legalities of endorsing candidates and also taking contributions (or being a conduit for other non-profits).

Here are the IRS Rules that would preclude us from endorsing a candidate if we also want to form as a non-profit and be a pass-through for other non-profit organizations:

501©(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity.

So the question comes down to which is more important: endorsing candidates, or taking donations?

Excellent catch @alyshalynn!

So it’ sounds like it is okay to promote positions on issues that will or may be voted on, but not individuals running for public office? I don’t think anyone ever suggested FAN might make a contribution to a candidates political campaign, but the point on “indirectly participating” does bring up the question of whether a questionnaire would count, or whether individuals expressing their support for a candidate in this forum would count - and should be deleted - I certainly hope not in both cases - but understand we can not use others behavior as proof conclusive.

Being inclusive, including providing the ability to vote for free (denied to so many), has always been a very important part to me of FAN’s value proposition to Austin. If FAN is providing infrastructure support for my member NA website that I would otherwise have to pay for in the open market, it seems like that could be an expense that JHCC shares in legitimately, instead of being classified for IRS purposes as a “donation”. If FAN is looking to develop a treasury to fund growth and support for causes, that would be a different analysis.

For me, striving to implement “Imagine Austin” is more important than endorsing candidates, or setting up a pass through structure to support member NA’s. I misspoke earlier - a non-profit that JHCC considered teaming up with needed a check from an “organization”, not an individual - it did not need to be non-profit. As JHCC does not have a bank account, it was an inhibitor, but not an important enough issue to influence FAN strategy.

This is getting too complicated and unfocused. Let’s look at this simple scenario:

  • FAN distributes a questionnaire to City Council candidates, and candidates answer it.
  • FAN takes donations from the public and doesn’t pay taxes on them.
  • FAN publicly takes positions in support of some of the City Council candidates.
  • FAN does NOT donate to any political candidates.

Can we legally fulfill this scenario? If so, what IRS designation or other steps do we need to take, if any?

@harren @Mateo_Barnstone @jeboyt

1 Like

This is the general idea I was leaning toward, @rcauvin

I don’t think posing a questionnaire to all candidates is in any way a form of endorsement, but I’d defer to the lawyers amongst us.

If we wanted to score those questions and the answers to them objectively to come up with some sort of index for each candidate, I think that’s as far as we could go as an organization to comparing them against our existing policy positions and without making an official endorsement of particular candidates.

Yeah, I was asking to focus on the entire sequence of steps, which culminates in an endorsements of candidates but no donation. Would it be legal and compliant with the rules of our tax status to do so?

Still looking for guidance from @harren, @Mateo_Barnstone, @jeboyt.