____________ FISCAL SPONSORSHIP Or 501(c)(3) TAX EXEMPTION WHAT’S RIGHT FOR YOU? 1 Copyright 2015 * Law Offices of Diana J. Basso

____________

FISCAL SPONSORSHIPOr

501(c)(3) TAX EXEMPTION

WHAT’S RIGHT FOR YOU?

1

Copyright 2015 * Law Offices of Diana J. Basso


2

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


3

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


4

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


5

DIANA J. BASSORenaissance Woman:

Can Look at Your Goals through the eyes ofArtist/Musician

Business EntrepreneurMarketer

Not for Profit Board MemberAttorney

INTRODUCTION


6

**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


7

Service

Product

BOTH?

STAGE I – WHAT ARE YOU DOING?


8

OFFER A SERVICE?

PerformCompose

TeachResearchProduce



9

MANUFACTURE AND/OR

SELL A PRODUCT?

RecordingsSheet Music (or License)

Concert Tickets Masterclass Participation



10

BOTH ASERVICE & PRODUCT?

Touring Ensemble that Records

Composer that produces Concerts

Teacher that gives Public Masterclasses



11

WHAT’S YOUR ROLE?

Creator * ArtistVisionary



12

WHAT’S YOUR ROLE?

Performing Artist/Ensemble

Writer – ComposerConsultant – TeacherProducer – Impresario

FundraiserTalent Booker

Marketer



13

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?


14

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



15

MISSION

Broad in ScopeMultiple Tasks or Projects

On-going Concern or Longer than One Year



16

MISSION

Found a chamber orchestra in Williamsburg, BrooklynA series of recordings by living composers

Run a Masterclass marketing and promotion service



17

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



18

STRESS MANAGEMENT SKILLS

EXERCISESLEEP

SPIRITUAL FRAMEWORKSUPPORT SYSTEM

CALM IN THE STORM PERSONALITY

STAGE III – WHO ARE YOU?WHAT ARE YOUR SKILLS?


19

ORGANIZATIONAL SKILLS

BALANCE CKBOOKCHECK MAIL REGULARLY

FILING IMPORTANT PAPERS



20

SOCIAL SKILLS

WIDE NETWORK OF FRIENDSOUTGOING PERSONALITY

CHARISMATICCOMMUNICATIVEGOOD INSTINCTS*



21

ASKING FOR HELP SKILLS

RADAR FOR UNTAPPED RESOURCESSEEK OUTSIDE SUPPORT

ASK STRANGERS FOR MONEYLOOK FOR / ASK FOR SPECIAL DEALS

FEARLESS IN HUMILITY



22

STANDAND

STRETCH


23

**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


24

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.



25

IMPORTANT

CORPORATE ENTITIES ARE FORMED BY A STATE

ANDARE GENERALLY

LEGALLY BOUND BY THE LAWS OF THAT STATE.



26

A. FOR PROFIT CORPORATIONS

AND

B. NOT FOR PROFIT CORPORATION

STAGE II – DIVE INFORM THE CORPORATE ENTITY


27

A.FOR PROFIT CORPORATIONS

1. Sole Proprietorship2. Partnership

3. LLP4. LLC

5. Corporation6. The L3C Corp. – NOT

NY



28

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



29

************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.



30

************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.



31

IMPORTANTForming a NFP Corporation &

Receiving Tax Exempt Status under Section 501(c)(3) of the Fed. Tax

Code are

TWO ENTIRELY UNIQUE & DIFFERENT

PROCESSES.



32

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.*



33

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.



34


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…



35


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.



36


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



37


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.


Copyright 2012 * Diana J. Basso, Esq.

38

ONE LAST STRETCH


39

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?

Copyright 2012 * Diana J. Basso, Esq.

40

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?


41

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


42

MANY FORMS OF FISCAL SPONSORSHIP

EXAMPLE 1New York Foundation for the ArtsSEE HANDOUT



43

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.



44

YOUR CHOICEDIVE IN - ALL IN ORDELEGATE TO FISCAL SPONSOR

REFLECTSYOUR WORKTHE WORK’S SCOPE & TIMELINEYOU & YOUR SKILLYOUR PERSONALITY

SUMMARY


45

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

Documents

____________ FISCAL SPONSORSHIP Or 501(c)(3) TAX EXEMPTION WHAT’S RIGHT FOR YOU? 1 Copyright 2015 * Law Offices of Diana J. Basso