Event:2016/10/17 Fundraising

Omni Fundraising/Finance WG Meeting - 17 Oct 2016

= Attendees =
 * Marcus, Jenny, Brian, Laura

= Updates =
 * Laura: Katie, the appraiser is working and has called me to ask a few questions.
 * Laura: Getting ready to send email to Pat Foley, the tax preparer, to tell her to go ahead and file taxes for 2014 and 2015.
 * Item on lease: Supposed to have contracts for maintenance for roof covering & drains and furnaces/HVAC & fire extinguisher systems now that it's our responsibility. also "clarifiers":
 * 10.5       Service Contracts. Tenant shall, at Tenant's sole expense, procure and maintain contracts, with copies to Landlord, in customary form and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements, if any, if and when installed on the Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof covering and drains, and (vi) clarifiers. However, Landlord reserves the right, upon notice to Tenant, to procure and maintain any or all of such service contracts, and Tenant shall reimburse Landlord, upon demand, for the cost thereof.
 * Fire extinguisher check is due - john@genesis-fire.com - typically ~$500
 * Mary Ann & Laura met with Winston re: grant for capital improvements. He toured the building, going to give us estimates.
 * When to meet with Maureen (nonprofit CPA)?
 * Available Wednesday afternoon?
 * From Grace: I have already written/submitted nominations for BAPS and Global Youth Communications, I have almost finished one for Liberated Lens, and I have CCL and Art Bison in the works.
 * If anyone else wants to be nominated they might have to send me a brief writeup about their org and what they do since I realised I'm not that familiar with the work of the rest of the collectives.
 * Also it would be helpful to know the estimated annual budgets of CCL and Art Bison -- I emailed Patrik and Marcus but didn't hear back. Otherwise I will just put down on the form that I don't know what they are!

Buy the Building

 * Meeting with Jesse tonight at 8pm, add questions / topics to the agenda below!
 * Delegate Consensus on BTB proposal - October 20th - looking likely with current consenso from LibLens, CCL, Sudo, FNB, & BAPS. Awaiting updates from GWS, Chiapas, YES, ABDC, & TIL.
 * Jenny wrote a full building proposal infodump & FAQ and sent to all the collectives: https://docs.google.com/document/d/12412blyXCVLkjJHrKXIipJTRaOzpNbQcB8SddSqnIsk/edit#

Sudo Proposal Consenso'd
Proposal #1:
 * Openly invite, if possible, the other 501(c)3 organizations to join us in our plan for Proposal #2 below:

Proposal #2:
 * Sudo Room will change its name to Sudo Commons
 * Or something more omni related (cleared by our lawyer Jesse)
 * Consist with its mission, Sudo Commons will broaden scope to host its educational public-benefit non-profit activities indefinitely in the omni commons, acting as an organization that participates in managing other organizations' rental and use of Omni Commons.
 * Sudo Commons will fiscally sponsor a project using the old name -- Sudo Room -- to conduct hackerspace activities within Omni Commons.
 * The fiscally sponsored project with the old name shall continue in spirit and in practicalities as before.
 * Sudo Commons will accept a large donation in order to finance the purchase of 4799 Shattuck with 50% ownership with Omni Commons, and therefore provide tax-deductibility to this donor.
 * Sudo Commons will sign a mutually-binding mutually-beneficial well-structured contract that ensures high levels of accountability and oversight for harmonious co-management with Omni Commons of 4799 Shattuck.
 * Functionally speaking, the Sudo Room community will have re-structured its organization to both carry on current (or similar) activities, as well as provide an ownership model for 4799 Shattuck.

End of Year Fundraising Letter
Things to include:
 * 501c3 Status acquired
 * Capoeira festival celebrating women in Capoeira, Biohack the Planet conference, Vegan MacDown, IWOC national meeting, IWW Planning meetings, Sihasin show (first stop on tour), Bonfire Makers 'Plac to Land', BASTARD conference, Ferment Change! event, 16th Antika Bulgaria Kick-Off, Catalyst Project’s Anti-Racism for Collective Liberation workshop,
 * New collectives: ABDC, YES, Agua Viva
 * Groups meeting here: Community Democracy Project, Land Action, Homes Not Jails, Bay Area Trans Writers Workshop, Green Windows creative writing workshop, Open Circle, Bay Area Applied Mycology, Oakland Jericho, BACE Timebank, Anti-Eviction Mapping Project, Real Vegan Cheese, Open Insulin,

Finances

 * Currently $11,182 in the bank, pending -$4,800 from appraisal and +$6,000 from community lenders = $12,382
 * Incoming: $2,000 from sudo, $564 from GWS, $200 chiapas, $300 TIL, $254 YES, $50 CDP, $195 donations, $650 Agua Viva, $300 BAPS, $570 open event invoices for $2,464 = $17,456
 * Total due 11/1: $15,687 (rent) + $165 (internet) + $374 (EBMUD) + $170 (D&O Insurance) = $16,396
 * See 'Will Omni Make It' doc: https://docs.google.com/spreadsheets/d/1PU2CZbjRDOccfu9drVvU52xYbLl640ahbPornJkTqAs/edit#gid=694248746

= Action Items =
 * Send in Vanguard application for sudo room [Jenny]
 * Send in community resolution form to Vanguard for Omni [Laura] - I need to include a board resolution on the signatories. Who should they be - Jose, Jenny, and ? Will write and send to the pad.
 * Check that donor-lender is willing to donate to sudo room/Omni2 [Jesse]
 * Call for annual board meetings for sudo (10 day notice) and Omni (?? day notice) [Jenny]
 * Draft TIC agreement [Jesse]
 * RVC promissory note & account switchover [Jenny/Marc]
 * Commons income review & implement finance item in commons wg agenda [Julio?]
 * Check into maintenance contracts

= Action Items pending 10/20 consensus =
 * Sign the promissory note between donor-lender and Omni and have those funds deposited in our account
 * Inform John we're pulling our option and open escrow

= Misc. Link Dump =
 * Full Building Proposal & FAQ: https://docs.google.com/document/d/12412blyXCVLkjJHrKXIipJTRaOzpNbQcB8SddSqnIsk/edit#
 * Pro Forma w/ budget for two org split: https://docs.google.com/spreadsheets/d/1rvkMc5lmd8PovoViNLdvlrv0tSyvrH7iB0SmGqaFec8/edit#gid=1281242457
 * Will Omni Make It Next Month? - https://docs.google.com/spreadsheets/d/1PU2CZbjRDOccfu9drVvU52xYbLl640ahbPornJkTqAs/edit#gid=694248746

-

Meeting w/ Jesse - 17 Oct 2016

= Attendees =
 * Laura, Jenny, Marcus, Robb, Marc, Brian, Jesse

= Agenda =
 * Go over remaining issues
 * Construct Timeline of next steps

= Notes =
 * Will have unexpected costs and events (eg groups leaving)

= Questions =
 * How much more or less work to do an LLC with unequal ownership?
 * Keeping two sets of books complex, want to minimize complexity.
 * Jesse: Bookkeeping not all that complex to do it that way


 * Any IRS restrictions on Omni2 donating $30K annually to Omni1? Why isn't that a pass through?
 * Donation from Omni2 is voluntary
 * JEsse: There are not hard limits on 50/50 split, but we need someone reading it to interpret it as close to a 50/50 split.  We could make an argument for why we are splitting it in a certain way and as long is it seems reasonable that will likely be ok. Of course reasonable minds can disagree on this.
 * $30,000 donation, must be voluntary. AS long as there are not agreements that this would happen beforehand.
 * LLC Option information: an uneven split would still be considered an implicit earmark
 * Jesse: LLC does not reduce complexity, and adds a third org on top of the other two.  Tax-exempt LLC operating agreement - more difficult to write from Jesse's POV


 * Transferring the option to buy to Omni2/sudo
 * Sudo gets loan and donation, sudo room board amends its bylaws & board to be equal to Omni's. Name change is doable.
 * A significant difference between an acquisition of the assets and liabilities of a nonprofit versus a for-profit can relate to the purchase price. If the acquisition involves two nonprofit entities, it may not be necessary for the acquiring nonprofit to pay fair market value (or anything) for the assets. Instead, the transaction can be structured as a gift of assets from the selling nonprofit to the acquiring nonprofit. Such gift should be permissible as long as the “selling” nonprofit corporation’s creditors are paid in full upon liquidation of the nonprofit. ( http://www.americanbar.org/publications/blt/2014/06/02_boyd.html }
 * Why isn't this an earmark?
 * Sudo not getting any earmarked funds. If all donated funds go to a nonprofit that has no problem accepting an unusual grant, no transfer from one to the other (no earmarked problem). Only problem is where donor gives to a nonprofit that then gives it to another nonprofit.
 * Still counts as 'unusual grant' as sudo has existed (qualifies to IRS)
 * Only concern is with the 1023EZ - still an 'unexpected' and 'unusual' grant


 * Could we ask the IRS directly re: EZ form?
 * Yes, say we'd like to accept this unusual grant and request an advanced ruling (takes 180 days)
 * Check Document IRS 557 on 'Unusual Grants'
 * Jesse can try to call and talk to them directly
 * Administrative Procedures Act rulemaking procedures (balance of Exec & Legislative branches)


 * Would just need to file a long-form 990 in the spring noting our change in activities, bylaws, income & name
 * IRS doesn't closely examine these, hasn't heard of issues with changing bylaws/activities etc


 * Issue with sudo taking on Omni's name?
 * IRS looks mainly at EIN number
 * May want to make the name slightly different to avoid issues
 * eg; 'Omni Commons' rather than Omni Oakland Commons
 * Omni becomes Sudo Space, or we dissolve it by year's end...


 * Concept of 'common control' needs to be further researched
 * If Disqualified Person for one org, does that transfer to another org with the same board
 * New board will look very different, as some groups have left, new groups have joined
 * Bylaws would also need to shift
 * When to file name change?
 * Use the husk of the Omni as sudo room
 * Better for sudo to become a fiscally-sponsored project rather than another nonprofit


 * Insurance - should cover all projects' activities?
 * Add those activities to the policy
 * Keep separate if Project has edgy activities


 * Repaying promissory notes
 * All unsecured
 * New Omni gives money to old Omni to cover loans repayment
 * Danger of private foundation status is after 6 years, we'd shut it down before then
 * May need to pay back a good chunk of these over time
 * New Omni transfers funds to Old Omni over time
 * Would need to keep Old Omni alive long enough to pay back the loans
 * Could write a new note
 * Could sell option to New Omni including the loan amounts


 * May need to consult with someone who does international law re: the loan from Labitat

= Timeline =
 * Omni Delegate consensus on Thursday
 * Submit Vanguard brokerage application for sudo - 30 days
 * Any special language to use?

For brokerage accounts only: A current copy of your organization’s secretary’s certificate, operating agreement, board minutes, or a similar document.


 * Call Special Meeting for Omni
 * Remove board & replace with placeholder board
 * Call Special Meeting for Sudo
 * action by unanimous written consent
 * Amend bylaws
 * Nominate new board & directors
 * Adopt Omni's fiscally-sponsored projects
 * Amend to change the name to 'Omni Commons' - will need to send current articles
 * When to amend?
 * Before you buy the property
 * Get sewer lateral estimate
 * Inform community loaners about how their loans will be paid by new Omni. Check who needs money back sooner.
 * Exercise option & open escrow within 10 days w/ $5,000 initially deposited, close escrow after 90 days max
 * Rent will be prorated based on funds in escrow
 * Settlement sheet when you open escrow
 * Apply for advance ruling of Unusual Grant from IRS
 * WOuld be slightly easier to stop operating OOC before the end of the year.
 * Apply for Property Tax Welfare Exemption

= Action Items =
 * Look at option with John [Jesse]
 * Send in Vanguard application for sudo room [Jenny]
 * Send in community resolution form to Vanguard for Omni [Laura] - I need to include a board resolution on the signatories. Who should they be - Jose, Jenny, and ? Will write and send to the pad.
 * Call for annual board meetings for sudo (10 day notice) and Omni (?? day notice) [Jenny]
 * Call IRS to ask about Sudo accepting unusual grant after haivng filed 1023 EZ - Jesse