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Revision of Fiscal Sponsorship FAQ from Wed, 2011-06-22 22:57

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Fiscal Sponsorship FAQ


New questions:

Make a paypal button; can send checks from the School Factory account that ear marked for AHA

Can we get fiscal sponsorships for donations under $250? Well, taxman doesn’t really care about below $250 - we don’t have to give them a receipt and they can still claim it. If the total over a year is more than $250, we send a receipt at the end of the period.

Member dues do not go to School Factory. Those are not deductible. If you trade for something, it’s not deductible. Membership is a benefit, you’re giving people something in exchange for their money which means it’s not a gift. But anything on top of what they do IS a gift, even if it’s all on one check.

Physical donations. Fair market value over $250 gets a receipt. They get form [number] if it’s a big donation. Create a case in atrium so we can prepare and do receipts quickly. Do we take 10% of that value?

What is our status in relation to School Factory? You are a member of the Space Federation (a program of School Factory). Considered a fiscally sponsored program of School Factory. But you only need to tell people about that when you’re asking people for money to be given to you. And we’ll talk about AHA more often than SF. Only really relevant when people are giving you things, then there’s small print that says this organization is sponsoring us. Also useful when applying for a grant - you often have to be tax exempt to apply for one, esp as we’re established. [Don’t these grants go to SF and then pass onto the space?]

Where do donation checks be sent to? It’s the same address as Bucketworks. 706 S 5th St MKE. Who are they made out to?

Separate out your space operations from what you want from the collaborative effort of Space Federation when it comes to what Atrium group you post to

Xander mentioning Maker Faire Detroit SpaceCamp - AHA would like to be a part of that as well

Grants questions are one thing, donations are another. Create a case in Atrium about what you’re applying for and we’ll help guide you through process.

What if the item is more than $5000? Then the Donor will need to fill out form 2023(Ithink).

What if we want to join a site or a service that benefits from non-profit status or calls for a 501(c)3?

Create a case in Atrium and assign to James, we will then sign up for the service on behalf of the organization or user you specify.

What if a tech vendor offers a non-profit discount for a product or software?

We can order it and bill you for the price, and have it shipped to you.

What are topics for regular meetings between facilitators?
* fresh blood on board and succession planning
* going from founders to leaders
* managing members
* women in spaces
* more spaces nearby
* creating infrastructure (your first board, governance, not having Founder’s Syndrom)
** hiring an operations manager
** hiring a cleaning person
* being an Area Host or using concept of Area Hosts
Have you had a chance to check out the following? What do you still have questions on?

The School Factory

The Space Federation

Erin QL: When will the Make-A-Space kit be completed?
Content is complete, currently being ported into Atrium.

Fiscal Sponsorship


James Carlson - founder of Bucketworks. Started BW in 2002 (along with The School Factory). TSF is the parent non-profit to Bucketworks. Connected with Willow and her group in 2009 to see how to replicate the group.

Willow Brugh - connected with people from the Two Hands Project and James. James is her mentor and helped her set up Jigsaw Renaissance. Gave advice on insurance, etc., to help her get set up. Getting ready for their 3rd move in 1.5 years to make sure they’re providing their members with the best space possible.

Sue Carlson - met James at startup accelerator, intrigued by BW and SA. Since then, became co-owner of business accounting firm called Acceed. Providing services to School Factory, potential board member for School Factory. Excited for potential and direction of all these spaces and events going on. Place for people who aren’t necesarily experts in any given field having a place to go, and getting help

Erin Quick-Laughlin - Distributed Hacker/Maker Network (DHMN). Tracking, tracing what’s going on across the country. Fell in love with a couple books by Daniel Swarez: Daemon and Freedom ™. Got together to see if there was interest in Appleton, WI. Bob Waldron said you should check out Bucketworks, Sector67, meet James. Pete P reiterated to talk to James and ended up in touch with Willow. Want our own physical space.  Currently we meet weekend to weekend for different making sessions, meet once a month for a lunch. Went from 6 people in August to 38 people on the list now. 14 ready to pay dues. 20 are pretty active. Applying for non-stock corp, getting some bylaws started (want to ratify by 18th of April), getting checking account, collecting dues, starting on space. Whole idea of leveraging the power of a 501c3

Joe Pugh, founding member and board at LVL1, been around for a year and a half. Spoke with Willow and James before, reevaluating the School Factory deal.

Dan Bowen at LVL1, representing White Star Balloon. Formed our own corp to absorb legalities of AHABs. Potential for damage costs is much higher than normal spaces, insurance is scant or non existance. Working on a transatlantic balloon project, ready to launch. Want to continue doing research that’s beyond an iPhone on a balloon. Need to raise more money to fund these balloons - they can be pretty expensive. Having the NPO enables that to move forward.

Space kit is essentially there. It just needs to structured in a way that works for the community.

Have a lot of the steps and details worked out.

Also have a four-phase plan of how to build up a space. Can share out. Added to Space Kit atrium as a to-do

Have been doing mentoring calls to help people set up spaces. Also sends out sample forms for customization, etc., for individual spaces to use. These are baseline docs. Not interested in creating a franchise empire, but do want to enable the individual communities to build what they want and do what they want.  A lot of the non-profit related stuff, non-stock corporate setup, etc., are common across groups, which we see as a commodity layer (operating system). We are trying to build that basic layer that we can share with others so they don’t have to recreate the wheel each time a new space is set up. This could include group insurance, group grants, etc., once the infrastructure is set up.

Erin - intrigued by this idea. Wants to encourage creativity and collaboration in the space, so will use any forms, checklists, etc., that are useful.

James - TSF is bringing 9 years of experience to the table to help set up space.  Accountability in collaboration.  This will be open-sourced. Wants to practice radical transparency in all aspects of this, including accounting, insurance coverages, etc.

Accede has created a very generic chart of accounts use by member spaces (non-stock corporations), which allows the members of the group exemption to act as their own non-profits.

Two models of gaining access to non-profit status:  fiscal sponsorship and group exemption.

Fiscal sponsorship:  Funds are raised and used for specific projects, which are routed through The School Factory’s 501c3 and then to the project less a small administrative fee.  TSF will monitor the use of the funds raised to ensure they were used properly.  The sponsored space isn’t a 501c3 and can’t act like one. It goes to SF, is accounted for via SF, then transferred to space. Member organizations responsible for their taxes, doing them, filing, etc.

Group exemption:  Allows the members of the group exemption to submit their financial information to the School Factory, which combines the data for 990 (non-profit) tax reporting purposes.  Allows much more nimbleness on the part of the member group. You raise your own money, write grants, etc.

The School Factory has two components:  The Space Federation and Schools for Communities. An example is the high school student who gained a full scholarship to film school and who now has his own independent documentary project. He did a fundraiser, raised money, and is making his documentary.  Fiscal sponsorship is established one project at a time.

High Altitude Balloons go up, and stop and float for up to 3 days. Due to the nature of our goal of crossing the Atlantic in 3 days we have to float in a high speed wind band. Unfortunately, the airlines have chosen to do the same thing.
This project fits the fiscal sponsorship model

Is there an advantage to using the standard chart of accounts if you start with fiscal sponsorship and may go to group exemption?  Yes. The standard chart of accounts will work for any space and it would make it much simpler to move to a group exemption.  We have example budgets, etc., that might be helpful in setting up a space, whether it is a fiscal sponsorship space or a member of the group exemption.

The future may bring other systems, such as a web based accounting system everyone is able to log into.

Today, we can find out where you are in the process?  Discovery, Formation, Launch and Outreach (becomes the perpetual state of existence).  A growing population is necessary for a sustainable space, which requires outreach.

Wrote a proposal to facilitate the growth of a space for communities that don’t have people to launch the space, but want a space. It’s a very generic plan. It could be used to make any type of space you wish. Would like to go through the steps and deliverable in each phase to find out where each group is. Have found that many groups have not built a map of the assets in a community. This involves mapping physical assets, people assets, political leadership and business leadership who might want to be involved, etc. Community leaders can help with permits, bureaucracies, etc.  Educational and Commercial leaders may want to become involved to help create a more vibrant and productive community. The map helps determine where the space should be located for now and into the future, etc.  

Joe: possibility of support for the balloon project. The other is about if LVL1 - doesn’t do much fundraising, mostly supported by members. We do get a lot of people who want to donate equipment but would prefer to get a tax deductible status on the donations. LVL1 is a nonstock, already filed for 501c3, but haven’t heard back yet.

James: our estimate on how much time, energy it takes to properly be in compliance. Bunches of kinds of insurance etc. Don’t need to be fiscally sponsored or on the group exemption to participate and share knowledge. If we sign you up for group exemption now, you’ll be able to get practice and have the advantages while you wait on your approval.

Dan: we’re a scientific non profit, we did this so if we cause a car accident, LVL1 won’t lose all its assets. We couldn’t afford the insurance, though. Directors and officers insurance? Can you do that for the fiscal sponsorship or just for group exemption?
James: it’s an option either way. 9 years of practice means we know how to talk to the insurance agents. One of our clients during our for-profit stage are insurance agents. So we can talk to them about how to protect all the spaces. Tomorrow is a collaboration bootcamp about no more emails or crappy meetings. They’re pretty progressive, don’t shut down the conversation at the terms “balloon” or “tablesaw” or “lasercutter”. They’ll help find the underwriters and help you package your verbage so you explain what you’re doing and minimize your risk. What are the edges around different policies?

Alexander: Collaborate on sharing information so we can all tell where we are along this path.
Willow: will get the survey in line
Sue and Willow: get group exemption, fiscal sponsorship overview on the website
Alexander: happy to help go through stuff. Want to do group exemption and find insurance
Erin: want to share document with other directors, want to move onto next steps of identifying where we’re at compared to everone else, how can we help each other out?
Joe: want to look at more stuff on group exemption. Fiscal sponsorship was enticing but wasn’t what will be the best for LVL1
Willow: set up a call for the proposal thing. (maybe even ustream to multiple spaces simultaneously?)
Excerpt from the proposal:General TimelineFrom experience, the School Factory divides the work of creating a new space into four phases:
PhaseHigh-level Description
DiscoveryLearning about the community, forming the founding team, determine feasibility, plan location and requirements
FormationLegal setup, process setup, invite community input, create physical environment, prepare environment for use
LaunchOpening event, community invitations, broad-scale marketing, identify additional partners, recruit members
OutreachLink with community partners, involved educational partners, develop brand awareness, invite outsiders, grow population

Each of these phases contains specific actions and projects that are undertaken in concert between the School Factory Space Facilitator and the Founding Team in Madison. Some of the steps required have already been taken by the Madison Founding Team, so the initial work of the Space Facilitator will be to understand the past work that has taken place and identify any gaps in the overall timeline.
Deliverables for each PhaseDiscovery: 8-12 weeksWhat is learned in this first and most important phase is fundamental to the success of the remaining phases. Through Discovery, we ensure that the community can launch and sustain the co-working space and focus the enthusiasm of the community into structured action towards a shared goal.

The Discovery phase involves
  • determining the size, roles, and make-up of the Founding Team
  • facilitating the creation of the Founding Team to establish a shared vision, norms for communication, and infrastructure for tracking commitments and work towards the goal
  • learning about the community resources, partnerships, and people that can help create and sustain the co-working space
  • defining the criteria for neighborhoods and locations that work for the project
  • identifying potential sources of revenue and funding and determining a budget and revenue model for the environment
  • establishing a fiscal sponsorship arrangement between the School Factory and the project

School Factory deliverables for this phase include:
  1. Evaluating and understanding existing work that has been done by the Madison Team and plugging the results into the overall timeline
  2. Setting up a web-based collaboration and communications environment for the Madison Team as well as on-boarding and training on its use
  3. Hosting a Value Gathering between Founding Team members--a half-day event that generates a shared understanding of the vision of the project between team members, defines the roles team members will play in achieving the goals, and establishes a common protocol for communications between team members
  4. Facilitating the creation of a Community Asset Map, an online database of potential partners, collaborators, and community organizations with which this project can partner. The Madison Team will populate the map through direct research, personal knowledge, and their social networks
  5. Facilitating the creation of a Location Criteria Guide, which is used by Madison Team members to 'test' areas and neighborhoods in the Madison community as potential locations for the space, including zoning, neighborhood trends, public transportation and entertainment options, and the overall health of the community
  6. Facilitating the creation of a Financial Model for the space, which broadly defines the budget requirements and identifies potential funding sources across a spectrum of sustainability including private, public, member, fee-for-service, and foundation sources
  7. Facilitating the Selection of the Location by applying the Criteria to spaces identified by the Madison Team.
  8. Reviewing the Lease Terms and Agreements

The Discovery phase concludes with the Selection of a Location by the Team.
Formation: 12-24 weeksDuring Formation, the Founding Team will build on the learning of the Discovery phase and establish the legal, administrative, and operational structures of the business as well as selecting the physical location and preparing it for member and community use. The duration of this phase varies widely as factors such as ideal location, funding, and volunteer team availability all affect the timeline.

Formation involves:
  • Assembling an Administrative Team who will oversee the day-to-day operations of the space and become responsible for defining its operational policies including money management, marketing and communications, facility management, and member coordination
  • Forming a Legal Container for the organization, including filing articles of incorporation, obtaining a tax identification number, bank account, and legal name
  • Creating a Usability Structure for the space, including
    • formats for meetups, events, and member activities
    • floor planning
    • storage and materials management
    • access control and security
    • cleaning and maintenance
    • scheduling and space management
  • Making the Space Legal, including inspections, occupancy permits, local laws and zoning requirements, liability insurance requirements
  • Creating the Membership Model which includes the Membership Agreement, Membership Levels, Member On-Boarding process, and Tour Guidelines
  • Public launch of the project, including social media outreach to potential members, groups, and partners and expanding the number of people involved in the project
  • Event planning for the Opening Event
  • Establishing relationships with utilities and service providers who will support the space
  • Initial move-in, setup, configuration, and decoration

School Factory deliverables for this phase include:
  1. Facilitation and project planning for the Administrative Team, including definition of roles and responsibilities, creation of a marketing strategy, financial management procedures, and facility/operational management published as the Operating Manual for the space
  2. Project management and mentoring on the creation of the Legal Container, including articles of incorporation, tax ID, and bank account selection and setup
  3. Bi-monthly in person and weekly remote co-working sessions for Administrative/Founding Team members to determine the Usability Structure and Compliance of the space
  4. Facilitating a half-day Member Modeling Workshop between the Administrative Team, Founding Team, and wider community to develop and document the initial Membership Agreement, Levels, and On-Boarding process using School Factory provided templates and creative discussion
  5. Creating an Opening Marketing and Event Plan as well as a Social Media Release for the event
  6. Mentorship and guidance on the physical configuration of the environment, decoration, and accessibility
  7. Mentorship and guidance on the overall publicity and marketing of the project, including technical guidance

The Formation phase concludes with the public launch of the space and an Opening Event that brings the wider community to the space--but there is still much more to do to ensure the space is sustainable.
Launch: 12-16 weeksThe first weeks after opening a new space are very exciting--all of the systems that we have created are now being put to the test by real life use. Members of the Founding and Administrative Teams will be elated and exhausted from their hard work. The Launch phase helps transition the energy of ownership from the Founding Team and Administrative Teams to the membership itself, to bring the space to financial and cultural sustainability--while building a strong community between members of the space.

Launch involves:
  • Forming an Advisory Team of members and community leaders to sustain and nurture the future growth of the space
  • On-boarding members rapidly to reach the membership level targets defined by the financial model
  • Promoting individual member activities
  • Modifying the Operating Manual with learnings from the experience of the space being open
  • Engaging members in taking ownership of the environment
  • Engaging members in collaboration with each other

School Factory deliverables include:
  1. Facilitate and host a half-day Value Gathering in the new space, with the first new members and the Founding/Administrative teams to build an internal community and culture for the space, establish strong personal bonds between participants, and transition the energy of responsibility for space growth to members
  2. Form an Advisory Team who will act as custodians for the sustainability and growth of the space
  3. Host and facilitate weekly conference calls between Founding/Administrative/Advisory team members to monitor and measure membership growth and the health of the internal community
  4. Facilitate the revision and modification of the Operating Manual, Membership Model, and other administrative and operational structures based on the real-life experience of the space
  5. Provide training for Advisory/Administrative team members on how to manage and operate the environment and foster a healthy community, including exercises that engage members in collaborative projects, giving tours of the space to potential members (sales) and how to facilitate the member on-boarding experience
  6. Assess the health of the community by creating and issuing a Member Survey at the end of this phase; we will share and evaluate the results with the Advisory/Founding Team

The Formation phase concludes with Reaching Financial Sustainability--the number of members and fees they pay completely covers the cost of operations, and there is a cash reserve--and Reaching Community Stability--members are actively and consistently engaged with the space, their own projects, and each other and there is at least one collaborative project shared by multiple members.
Outreach: 12 weeks and beyondHaving launched a successful space and populated it with a thriving community of members, it is possible to look outside the four walls towards the wider community and form the partnerships and relationships that keep people engaged. Outreach brings the new co-working space into relationship with a diverse array of local and national community organizations, initiatives, and events and represents the final and on-going state of a co-working space.

Outreach includes:
  • Forming collaborations with other community organizations that leverage the space and its community of members
  • Inviting the wider community to schedule events and meetups in the space
  • Building a broader audience for the activities and community in the space
  • Creating events and activities that are unique to the space
  • Developing a culture of celebration
  • Ensuring continuing diversity of new members and outbound members, to keep the population varied and vibrant
  • In-sourcing community events from other cities and regions
  • Forming relationships with other national co-working spaces and putting Madison on the map for co-working

School Factory deliverables include:
  1. Facilitating the Advisory Team development of a standard Partnership Model and Criteria
  2. Providing templates and training for Community Celebration events that bring members together to form connections and social bonds
  3. Providing templates and training on Technology and Entrepreneurship events such as BarCamp, StartupAccelerator, and other meetups that engage members with guests and the wider community
  4. Facilitate Monthly Advisory Team meetings on the health of the space, the community, and its leadership as well as financial review
  5. Final Report to Founding, Advisory, and Administrative Teams on the overall success of the project
Space Federation
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