Greenbelt Internet Access Cooperative

Monthly Board Meeting November 6, 1997

Conference Room, Greenbelt Police Station

 

M E E T I N G M I N U T E S

 

DIRECTORS:   Anne Andersen (very late arrival), Tom Crompton (late arrival), Matt Elliott, Jim Heagy, Doug Love (late arrival), Neil McLeod, Chris Morris, Nancy Revis (Absent: Clement Lau)

MEMBERS:     Patty Merryman

GUESTS:

 

=== PRELIMINARIES ===

 

1.      The meeting was called to order at 7:00pm, with Nancy Revis presiding.

 

=== MONTHLY REPORTS ===

 

2.      Secretary (Jim Heagy)

-         Minutes of the Monthly Board Meeting October 2, 1997

 

3.      Treasurer (Chris Morris)

         Chris distributed financial statements to each Director present.

 

4.      Membership Committee (Neil McLeod)

         Neil distributed a service payment summary and a membership roster to each Director present.

 

5.      ISP Committee (Matt Elliott)

         Matt reported that a "short list" of prospective ISPs has been compiled and that written proposals are being requested from these ISPs.

 

=== OLD BUSINESS ===

 

6.      Webspace Allocation

         The first item of business was the issue of pooled webspace. Neil explained the mechanics of the problem, much of which can be found on the Service Rate Schedule webpage. At DSI, because each Member is entitled to 0.5MB of webspace, we must presume that at any time we may require ~32MB of pooled space (65 Members x 0.5MB/Member) in addition to the space consumed by the Community and GIAC Websites.

         By next month, we will require an additional 10mb webspace increment at a cost (to GIAC) of an additional $10/month.

 

7.      Nonprofit Status

         Much of the remainder of the meeting was devoted to the profit/nonprofit issue. Chris Morris presented the table below, summarizing the actions required to switch to nonprofit via two possible mechanisms.

 

GIAC Non-Profit Conditions/Comparisons

Condition/Action

Maintain Existing Corporation and Tax Status

Formation of New Corporation (Non-Profit)

Amend Corporate Charter to Conform to Non-Profit Status

Articles of Incorporation

No action needed

New corporation - additional IRS and MD filings

Send amended articles to MD State Dept of Assessments

Funding

No action needed

Transfer funds to new entity

No action needed

Member notification

No action needed

Relinquish member fee to new entity

Relinquish member fee to new entity

Member tax consequences

No consequences

(a) Deemed charitable contribution on member fee transferred to entity.
(b) Taxable gain to member on difference of share value over $50

(a) Deemed charitable contribution on member fee relinquished.
(b) Taxable gain to member on difference of share value over $50

Corporate liquidation

Not required

Required

Not required

IRS notification

Not required

Form 1023

Form 1023

Grants

Not available

Available

Available

Corporate taxes / state taxes

Corporate income & personal property tax

None

None

IRS tax filings

Form 1120

Form 990*

Form 990*

General corporate transition

None

More difficult (Chris's opinion)

Less difficult (Chris's opinion)

* if gross receipts averages $10,000 or higher

 

         The Board voted unanimously to recommend to the membership the change from profit to nonprofit status. Much discussion centered on the $50 membership fee. Options ranged from allowing Members to donate all or part of the fee to GIAC as a tax-deductible contribution, to returning the entire fee to Members. No decision was made on what to do with the fee or how to structure fees if nonprofit status is approved.

         Tom Crompton volunteered to draft a letter to the membership, informing them of the Board's recommendation, the possible restructuring of fees, and the vote on the change to nonprofit status to take place at a combined Board Meeting / Special Membership Meeting on December 4. The letter is to be included in the GIAC November mailing.

 

The letter has since been sent to the membership and is included below:


GIAC Members:

 

The GIAC Board of Directors would like to share with you some exciting news about proposed changes to GIAC organizational structure. But first, a little background information:

 

The original GIAC charter established the organization as a non-stock cooperative. This business structure allowed GIAC to impose a membership fee which was used to help provide the operating capital needed to establish the Greenbelt.com domain and website, to initiate member Internet services, and to cover other start-up expenses (many start-up costs were loaned or donated by GIAC members). The original structure has now successfully fulfilled its purpose. All start-up costs have been recouped and ongoing GIAC operating expenses are now fully covered by ISP service fees charged to members.

 

The Board of Directors has been considering alternative business structures that might offer GIAC new sources of operating capital and new opportunities for growth. The option we feel offers the benefit would be to restructure GIAC as a nonprofit organization, allowing us to receive tax-deductible charitable contributions, grants, etc. Such contributions might include computer equipment or financial funding for specific projects and could be used to expand our services to the GIAC members and our community at large.

 

The Board has recently reviewed several alternatives to accomplish a transition to nonprofit status as outlined in the attached report. Based on the information provided, the Board has concluded that the preferred method of transition would be to realign our existing structure to conform with nonprofit status requirements. This can be accomplished relatively simply by making the required changes to our corporate documents and by submitting the required applications to state and Federal authorities.

 

An important issue involved with transition to nonprofit status involves the disposition of the refundable membership fee initially paid by each GIAC member and now held in reserve. If approved, a change to nonprofit status could require that the refundable fee be converted, in whole or in part, to a non-refundable fee. Any part of the membership fee not so converted would be reimbursed to the member or treated as a tax-deductible donation, at each member's individual option.

 

After careful review, the Board has voted to recommend that GIAC convert to nonprofit status as of January 1, 1998. This issue will be discussed and voted on at the next scheduled meeting, which will take place on December 4, 1997, at the Greenbelt Police Station, located at 550 Crescent Road. As this matter is a major factor in the future of the GIAC, we hope that you will arrange to attend this important meeting.

 

Board of Directors


 

8.      Classes

         The December class is "Internet Relay Chat', taught by Tom and Ranie Crompton, to be held on December 17 at 7:00pm at the Greenbelt Library.

 

=== NEW BUSINESS ===

 

9.      Publicity / Promotions

         Neil was interviewed by The Daily Orbit, a website devoted to promoting Maryland-based Internet organizations. Click here (no longer online) to read the full interview.

 

10.  Transition

         Neil also announced that for health reasons he must cut back on his GIAC workload. From now on he will no longer be doing installation "house calls" or training of Members. He will also be curtailing the time he spends on Webmaster activities.

 

=== CONCLUSION ===

 

11.  Scheduled Meetings

         The next meeting will be held at 7:00pm on Thursday, December 4, in the conference room at the Greenbelt Police Station.

-         Minutes of the Monthly Board Meeting December 4, 1997

 

12.  The meeting was adjourned.

 

 

- 11/__/97 Posted by Jim Heagy
- 05/15/00 Edited by Neil McLeod

- 09/01/05 Reformatted by Neil McLeod