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FISCAL SPONSORSHIPOr
501(c)(3) TAX EXEMPTION
WHAT’S RIGHT FOR YOU?
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Copyright 2015 * Law Offices of Diana J. Basso
Copyright 2015 * Law Offices of Diana J. Basso
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DIANA J. BASSOInterlochen Arts Academy, Concerto Winner
Eastman School of Music, BM in PerformanceArizona State University, MM in PerformanceNew York University, MBA-core coursework
Cardozo School of Law, JD, focus on intellectual property law
Instructor, Eastman School of Music IML ProgramCLE Instructor, Minnesota Bar Association
INTRODUCTION
Copyright 2015 * Law Offices of Diana J. Basso
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DIANA J. BASSONew Times/Village Voice Media, Classified Ad Director
New York Post, IT & Advertising Sales DirectorRolling Stone & US/Wenner Media, Sales Director
Working Woman Magazine, Sales ManagerYM-The Teen Magazine/Gruner & Jahr – Senior Sales Executive
Family Money/Meredith USA Publishing – Senior Sales ExecutiveParade Magazine/Conde Nast – Senior Sales Executive
Attorney at Law, Beatie & Osborn, PCLaw Offices of Diana J. Basso
INTRODUCTION
Copyright 2015 * Law Offices of Diana J. Basso
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DIANA J. BASSOQuintet – Coleman Competition Honorable Mention
Bowdoin Summer Music Festival Core Musician, Pope John Paul World Tour 1987
Phoenix Little Theater, Music Theater of AZ CompaniesFreelance Flutist/AFM Member – TV, Film, Advertising
Annual Basso Summer Flute Clinic – AZGotham Winds of NY – Founding Member
New York Flute Club – Board MemberNew York Repertory Orchestra – Founding Musician
Spectrum Symphony of New York – Attorney/Board MemberAmerican Modern Ensemble – Attorney/Board Member
Negotiator: Baltimore Symphony and Richmond Symphony
INTRODUCTION
Copyright 2015 * Law Offices of Diana J. Basso
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DIANA J. BASSORenaissance Woman:
Can Look at Your Goals through the eyes ofArtist/Musician
Business EntrepreneurMarketer
Not for Profit Board MemberAttorney
INTRODUCTION
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**DISCLAIMER**I am licensed to practice law in NY State.
Accordingly, information I offer to you today is specific to the NOT FOR PROFIT Laws and
Regulations of New York State.NOTHING IN THIS PRESENTATION
IS INTENDED AS OR OFFERED TO YOUAS LEGAL ADVICE.
INTRODUCTION
Copyright 2015 * Law Offices of Diana J. Basso
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Service
Product
BOTH?
STAGE I – WHAT ARE YOU DOING?
Copyright 2015 * Law Offices of Diana J. Basso
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OFFER A SERVICE?
PerformCompose
TeachResearchProduce
STAGE I – WHAT ARE YOU DOING?
Copyright 2015 * Law Offices of Diana J. Basso
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MANUFACTURE AND/OR
SELL A PRODUCT?
RecordingsSheet Music (or License)
Concert Tickets Masterclass Participation
STAGE I – WHAT ARE YOU DOING?
Copyright 2015 * Law Offices of Diana J. Basso
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BOTH ASERVICE & PRODUCT?
Touring Ensemble that Records
Composer that produces Concerts
Teacher that gives Public Masterclasses
STAGE I – WHAT ARE YOU DOING?
Copyright 2015 * Law Offices of Diana J. Basso
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WHAT’S YOUR ROLE?
Creator * ArtistVisionary
STAGE I – WHAT ARE YOU DOING?
Copyright 2015 * Law Offices of Diana J. Basso
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WHAT’S YOUR ROLE?
Performing Artist/Ensemble
Writer – ComposerConsultant – TeacherProducer – Impresario
FundraiserTalent Booker
Marketer
STAGE I – WHAT ARE YOU DOING?
Copyright 2015 * Law Offices of Diana J. Basso
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PROJECT
Single EffortSpecific AudienceClear Parameters
Beginning and EndTimeframe: One Year - ish
STAGE II – HOW BIG IS YOUR VISION?Do you have a PROJECT or a MISSION?
Copyright 2015 * Law Offices of Diana J. Basso
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PROJECT
Record all the Telemann DuetsSponsor a Visiting Artist from China
Perform all the Brahms chamber works with pianoA Vivaldi series at your house of worship
STAGE II – HOW BIG IS YOUR VISION?Do you have a PROJECT or a MISSION?
Copyright 2015 * Law Offices of Diana J. Basso
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MISSION
Broad in ScopeMultiple Tasks or Projects
On-going Concern or Longer than One Year
STAGE II – HOW BIG IS YOUR VISION?Do you have a PROJECT or a MISSION?
Copyright 2015 * Law Offices of Diana J. Basso
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MISSION
Found a chamber orchestra in Williamsburg, BrooklynA series of recordings by living composers
Run a Masterclass marketing and promotion service
STAGE II – HOW BIG IS YOUR VISION?Do you have a PROJECT or a MISSION?
Copyright 2015 * Law Offices of Diana J. Basso
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MISSION
Provide instruments/elementary music books to West AfricaFound an Afterschool Chamber Music Program
String Quartet performing/recording music of living composersEthnomusicology Ensemble
Establish a performance venue in the Financial District
STAGE II – HOW BIG IS YOUR VISION?Do you have a PROJECT or a MISSION?
Copyright 2015 * Law Offices of Diana J. Basso
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STRESS MANAGEMENT SKILLS
EXERCISESLEEP
SPIRITUAL FRAMEWORKSUPPORT SYSTEM
CALM IN THE STORM PERSONALITY
STAGE III – WHO ARE YOU?WHAT ARE YOUR SKILLS?
Copyright 2015 * Law Offices of Diana J. Basso
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ORGANIZATIONAL SKILLS
BALANCE CKBOOKCHECK MAIL REGULARLY
FILING IMPORTANT PAPERS
STAGE III – WHO ARE YOU?WHAT ARE YOUR SKILLS?
Copyright 2015 * Law Offices of Diana J. Basso
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SOCIAL SKILLS
WIDE NETWORK OF FRIENDSOUTGOING PERSONALITY
CHARISMATICCOMMUNICATIVEGOOD INSTINCTS*
STAGE III – WHO ARE YOU?WHAT ARE YOUR SKILLS?
Copyright 2015 * Law Offices of Diana J. Basso
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ASKING FOR HELP SKILLS
RADAR FOR UNTAPPED RESOURCESSEEK OUTSIDE SUPPORT
ASK STRANGERS FOR MONEYLOOK FOR / ASK FOR SPECIAL DEALS
FEARLESS IN HUMILITY
STAGE III – WHO ARE YOU?WHAT ARE YOUR SKILLS?
Copyright 2015 * Law Offices of Diana J. Basso
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STANDAND
STRETCH
Copyright 2015 * Law Offices of Diana J. Basso
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**DISCLAIMER**I am licensed to practice law in NY State.
Accordingly, information I offer to you today is specific to the NOT FOR PROFIT Laws and
Regulations of New York State.NOTHING IN THIS PRESENTATION
IS INTENDED AS OR OFFERED TO YOUAS LEGAL ADVICE OR COUNSEL.
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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ANOTHER DISCLAIMER
I am not a Tax Attorney, CPA or Financial Services Professional,
so any tax or financial information shared today is my
personal opinion only.
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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IMPORTANT
CORPORATE ENTITIES ARE FORMED BY A STATE
ANDARE GENERALLY
LEGALLY BOUND BY THE LAWS OF THAT STATE.
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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A. FOR PROFIT CORPORATIONS
AND
B. NOT FOR PROFIT CORPORATION
STAGE II – DIVE INFORM THE CORPORATE ENTITY
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A.FOR PROFIT CORPORATIONS
1. Sole Proprietorship2. Partnership
3. LLP4. LLC
5. Corporation6. The L3C Corp. – NOT
NY
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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The L3C Corporation
The Low-Profit Limited Liability Company (L3C) is a hybrid business form, combining a socially beneficial mission with a for-profit business entity. Please note that only a few states recognize this business form.
States that recognize L3C as of 10/2015: IL, LA, ME, MI, NC, RI, UT, VT, WY
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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************B. THE NOT FOR PROFITCORPORATION************
1. Cannot distribute assets or profits or income to members, directors or officers except as permitted by statute, and2. May not be formed for profit or financial gain, although employees may be reasonably compensated.
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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************B. THE NOT FOR PROFITCORPORATION************
NOTABLY:A New York Not for Profit Corp. has no shareholders or equity holders – it is organized for and on behalf of the citizens of New York State. BE CAREFUL OF IP OWNERSHIP ISSUES.
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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IMPORTANTForming a NFP Corporation &
Receiving Tax Exempt Status under Section 501(c)(3) of the Fed. Tax
Code are
TWO ENTIRELY UNIQUE & DIFFERENT
PROCESSES.
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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BASSO’S NFP CORPORATIONCHECKLIST
1. Choose a name – Reserve It. $10 2. Select your board of directors (3 people minimum.)
3. Develop a mission statement. Broad yet sufficiently specific.*
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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NFP CORPORATIONCHECKLIST
4. Develop a nonprofit operating plan, which is like a business plan for nonprofit organizations, including a description of the organization’s location, staffing, activities, funding, fundraising plan and budget.
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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NFP CORPORATIONCHECKLIST
5. Create NFP Articles of Incorporation, Bylaws and **Conflict of Interest Policy.**NEW: NFP REVITALIZATION ACT OF 2013
6. Incorporate pursuant to Section 402 of NY Not-for-Profit Corporation Law. 10/2015: $75.00 filing fee.
You are not done yet…
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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NFP CORPORATIONCHECKLIST
7. Receive your EIN number (Employer ID number), open a bank account, and assign check writing privileges and protocols.
8. Hold your first meeting with all board members in attendance (no proxy votes allowed) to elect corporate directors and adopt bylaws.
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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NFP CORPORATIONCHECKLIST
And finally…THE CHOICE9.1 FEDERAL TAX EXEMPTION 501(c )(3)
a. Form 1023-EZ (for domestic orgs w under $50,00 annual budget and under $250,000 in assets.) $400 filing fee. 3 pgs.
b. DELEGATE/PARTNER WITH A FISCAL SPONSOR
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2015 * Law Offices of Diana J. Basso
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NFP CORPORATIONCHECKLIST
9.2 FILE FOR STATE TAX EXEMPTIONFile for state and local tax exemptions: (Form CT-247 at www.tax.state.ny.us/pdf/2005/fillin/corp/ct247_805_fill_in.pdf); New York State and local sales tax (Form ST-119.2 at www.tax.state.ny.us/pdf/2008/fillin/st/st119_2_1108_fill_in.pdf); and the New York City General Corporation Tax.
STAGE IV – DIVE INFORM THE CORPORATE ENTITY
Copyright 2012 * Diana J. Basso, Esq.
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ONE LAST STRETCH
Copyright 2015 * Law Offices of Diana J. Basso
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FISCAL SPONSORSHIP
Fiscal sponsorship enables a NON-EXEMPT charitable organization or project to raise tax-deductible donations and operate through/with the assistance of a TAX EXEMPT organization (the Fiscal Sponsor) with similar mission.
STAGE V – DELEGATE?
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Fiscal Sponsorship is a financial and legal system by which a legally recognized 501(c)(3) public charity provides financial and legal oversight for a project initiated independently by an artist. That "project" might be a one-time project for an independent artist or another arts organization that does not have its own 501(c)(3) status. Once sponsored in this way, the project is eligible to solicit and receive grants and tax-deductible contributions that are normally available only to 501(c)(3) organizations.
STAGE V- DELEGATE?
Copyright 2015 * Law Offices of Diana J. Basso
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CAUTIONIt’s of critical importance to pursue fiscal sponsorship with a organization that is experienced and savvy regarding its legal structure and accounting systems. If a fiscal sponsorship is not administered properly and the IRS reviews or audits the entity, the sponsor could lose its 501(c)(3) status, and sponsored projects such as yours could be forced to return any money raised.
STAGE V – DELEGATE?FISCAL SPONSORSHIP
Copyright 2015 * Law Offices of Diana J. Basso
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MANY FORMS OF FISCAL SPONSORSHIP
EXAMPLE 1New York Foundation for the ArtsSEE HANDOUT
STAGE V – DELEGATE?
Copyright 2015 * Law Offices of Diana J. Basso
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MANY FORMS OF FISCAL SPONSORSHIP
EXAMPLE 2FRACTURED ATLASSEE HANDOUT FA sponsored projects are separate legal entities responsible for their tax returns, employment taxes, insurance, debts, liabilities and other legal obligations.
STAGE V – DELEGATE?
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YOUR CHOICEDIVE IN - ALL IN ORDELEGATE TO FISCAL SPONSOR
REFLECTSYOUR WORKTHE WORK’S SCOPE & TIMELINEYOU & YOUR SKILLYOUR PERSONALITY
SUMMARY
Copyright 2015 * Law Offices of Diana J. Basso
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RESOURCES
NY State’s Division of Corporations http://www.dos.ny.gov/corps/
Citizen Media Law Project http://www.citmedialaw.org/legal-guide/forming-corporation-new-york
Nonprofit Coordinating Committee of New Yorkwww.npccny.org
New York Foundation of the Arts - www.NYFA.org
THE FOUNDATION CENTER – www.foundationcenter.org
FRACTURED ATLAS - www.fracturedatlas.org
Law Offices of Diana J. Bassowww.DJBassoLaw.com
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