Greenbelt Internet Access Cooperative

Special Membership Meeting December 4, 1997

Conference Room, Greenbelt Police Station

 

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

 

=== NONPROFIT STATUS ===

 

1.      Background

         Neil McLeod started the discussion by reviewing the original intent of the GIAC financial structure and our current financial situation. Much of this is explained in the letter sent in the November mailing, the text of which can be found in the November minutes. The main points are:

-         The original cooperative structure, with its $50 membership fee (redeemable upon termination of membership), was put in place to encourage participation and to establish initial operating capital.

-         We have been operating in the black for several months now, i.e., our share value is above $50/member.

-         The membership fees have given us a substantial reserve, but we cannot use this money for operating expenses or for capital expenditures (buying a computer, for example) without lowering the share value below $50/share.

-         It is generally agreed by the Board that using reserve money for expenditures (thereby lowering the share value below $50/share) is not fiscally responsible.

         The primary motivation for seeking nonprofit status is to increase GIAC's access to funds and equipment. Currently, our sources of income are limited to the margin on monthly access fees, extra webspace fees and extra mailbox fees. Furthermore, donations to GIAC are not tax-deductible.

 

Following Neil's introduction, several discussions took place. These are summarized below by topic:

 

2.      Cooperative Status

         Concern was expressed as to whether GIAC could remain a cooperative if nonprofit status was granted. Chris Morris explained one major difference; in the event that the GIAC entity was dissolved, as a nonprofit organization, assets would be required by law to be distributed to other nonprofit agencies. This is contrary to the existing structure, which requires assets to be distributed among cooperative members. Other business operations would remain essentially unchanged.

         The question arose as to whether there are any nonprofit cooperatives in existence. Neil McLeod and Patty Merryman cited a pilot's group they had read about, but did not recall the exact name of the group. There was general agreement in sustaining a cooperative mentality.

 

3.      Membership Fee

         The question of what to do with the $50 membership fee, should nonprofit status become adopted, was raised. Suggestions were varied, but the general consensus was that a membership fee would still be required for new Members. This would be a nonrefundable fee. No amount was agreed upon. No decision was made on how to handle membership fees for current members, although it was generally agreed that some portion of the $50 would be retained and Members could choose the balance to be refunded or donated to GIAC as a tax-deductible charitable contribution. It was finally decided that all formal decisions regarding the membership fee would be made if and when nonprofit status was established.

 

4.      Nonprofit Eligibility

         Questions were raised about GIAC's eligibility for nonprofit status and its obligations if and when nonprofit status was established. Chris Morris explained that GIAC would apply as a nonprofit educational organization with 501(c)(3) status. In addition to our Internet outreach and education activities, our monthly class series at the Library would be cited on nonprofit changeover documents required by the state of Maryland and the IRS. Clement Lau, who helps run a nonprofit school, explained that ultimately we are the ones asserting nonprofit eligibility and it is up to state and federal officials to approve or reject our assertion. Chris Morris added that, in the eyes of the IRS, GIAC would not be viewed with impropriety, since all GIAC Directors and Officers are volunteers.

 

5.      Other Concerns

         Another concern was the possibility of other businesses taking advantage of GIAC's nonprofit status ... (Can someone please help here? I cannot reconstruct this line of discussion. I thought I understood this at the meeting, but it appears now that I didn't! I'm having a hard time constructing a scenario where another business takes advantage of GIAC solely because of its nonprofit status. -Secretary)

 

Following these discussions, the motion to apply for nonprofit status was approved by the Members present by a vote of 8 to 1, with 1 abstention.

 

Chris Morris explained that the Articles of Incorporation would have to be amended before applying for nonprofit status. Chris and Neil agreed to work on this so that we could apply before the end of the calendar year.

 

BACK TO MONTHLY BOARD MEETING

 

 

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

- 09/01/05 Reformatted by Neil McLeod