GIAC 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
PRELIMINARIES The meeting was held in the Greenbelt Police Department conference room. Nancy Revis, President, presided over the meeting. The meeting began at 7 p.m. Board Members present: Anne Anderson (very late arrival), Tom Crompton (late arrival), Matt Elliott, Jim Heagy, Doug Love (late arrival), Neil McLeod, Chris Morris, Nancy Revis Others present: Patty Merryman WEB SPACE The first item of business was the issue of pooled web space. Neil explained the mechanics of the problem, much of which can be found on the GIAC Website Services Page. Because each member is entitled to 0.5 MB of space we must presume that at any time we will require ~ 32 MB of pooled space (65 members x 0.5 MB/member). Next month we will require an additional 10 MB at a cost (to GIAC) of $10/month. PROFIT/NONPROFIT 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 NONPROFIT CONDITIONS/COMPARISONS ================================================================================ Maintain Existing Formation of Amend Corporate Corporation and New Nonprofit Charter to Conform Condition/Action Tax Status Corporation to Nonprofit Status ================================================================================ Articles of No action needed New corporation - Send amended Incorporation Additional IRS articles to MD State and MD filings Dept of Assessments -------------------------------------------------------------------------------- Funding No action needed Transfer funds to No action needed new entity -------------------------------------------------------------------------------- Member No action needed Relinquish member Relinquish member notification fee to new entity fee to new entity -------------------------------------------------------------------------------- Member tax No consequences (a)Deemed charitable (a)Deemed charitable consequences contribution on contribution on member fee member fee transferred to transferred to entity. entity. (b)Taxable gain to (b)Taxable gain to member on difference member on difference of share value over of share value over $50.00 $50.00 -------------------------------------------------------------------------------- Corporate Not required Required Not required liquidation -------------------------------------------------------------------------------- IRS notification Not required Form 1023 Form 1023 -------------------------------------------------------------------------------- Grants Not available Available Available -------------------------------------------------------------------------------- Corporate taxes/ Corporate income None None state taxes and personal property tax -------------------------------------------------------------------------------- IRS tax filings Form 1120 Form 990* Form 990* -------------------------------------------------------------------------------- General corporate None More difficult Less difficult transition (Chris's opinion) (Chris's opinion) -------------------------------------------------------------------------------- * if gross receipts average $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 all of the 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 Boards' recommendation, the possible restructuring of fees, and the vote on the change to nonprofit status to take place at the next meeting (Dec. 4). The letter is to be included in the November GIAC 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 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 non-profit 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 non-profit 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 non-profit status requirements. This can be accomplished relatively simply by making the required changes to our and by submitting the required documents to state and Federal authorities. An important issue involved with transition to non-profit 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 non-profit 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 non- profit 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 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ CLASSES The December class is "Internet Relay Chat', taught by Tom and Ranie Crompton. The class is Dec. 17, at 7 PM in the basement auditorium of the Greenbelt Public Library. ISP COMMITTEE The ISP committee reported that a "short list" of prospective ISPs has been compiled and that written proposals are being requested from these ISPs. MISCELLANEOUS ITEMS Neil was interviewed by The Daily Orbit, a website devoted to promoting Maryland-based internet organizations. Click here to read the full interview. Neil also announced that he is cutting 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 reducing the time he spends on Webmaster activities. Jim Heagy, Secretary November 1997 [CLOSE WINDOW TO GO BACK]