Message-ID: <882@topaz.ARPA>
Date: Tue, 5-Mar-85 21:47:34 EST
Article-I.D.: topaz.882
Posted: Tue Mar  5 21:47:34 1985
Date-Received: Thu, 7-Mar-85 04:03:39 EST
Sender: daemon@topaz.ARPA
Organization: Rutgers Univ., New Brunswick, N.J.
Lines: 42

From: "Don't worry, I'll tell you later." 

     In a recent issue, a reader commented that the phrase "NESFA, Inc."
implied that the group exists to make a profit, since they're incorporated.
Sorry, but that's an unfounded assumption, as they may well be a non-profit
corporation, as most faanish institutions tend to be (e.g., the WorldCons now
incorporate in this fashion, as do many local clubs, esp. if they intend to
own property/libraries/mimeo machines or to spend large amounts of money, as in
putting on a con).  The purpose of incorporating as a non-profit is simple: it
protects the individuals who work for the group.
     For instance, if a convention were put on by an unincorporated group, and
it lost money, *every* individual who could be proven to have worked on that
con -- even in an unpaid volunteer position -- could be hauled into court by
the convention's creditors.  If the group is incorporated, then no individual
is liable for the group's debts.  (However, if an individual associated with
the group commits a crime with the group's funds -- embezzlement or fraud, for
instance -- then that person can be tried.)
     The precise mechanism by which a group becomes a non-profit corporation
is defined by state law.  Once a group has incorporated, though, they can also
apply for tax-exempt status at both the state and federal levels.  In most
cases, this is done on the grounds that the group is, in some way, serving an
educational or cultural purpose, as defined in section 401(c)(3) of the
Internal Revenue Code, though there are lots of other legal reasons for being
considered tax-exempt -- fraternal groups, religious organizations, and so on.
     By the way, being a "non-profit" corporation doesn't mean that you're\
trying to lose money.  Rather, if the group makes money, the profit is not
then distributed to the corporation's "owners", but used to further the pur-
pose that was stated in the groups Articles of Incorporation.  So, if NESFA
feels that setting up a permanent structure for their clubhouse  will help
in some way to fulfill the formally-stated goals that are in their charter
(and this is almost certainly the case, since such goals are usually stated
in a manner that allows broad interpretation), then their stated plan of using
any Boskone profits to help build/buy/furnish such a clubhouse is not only
reasonable, but laudable -- they're doing exactly what they told you they were
going to do.
     If you don't like the way NESFA goes about setting and fulfilling its
goals, the best thing you can do is to join and raise your voice at meetings.
Using sf-lovers as a forum is probably a waste of time, since this tends to
be a collection of readers, not of faans -- the typical total attendance at
the annual sf-lovers party at Worldcon, from what I've seen, is less than
a hundred, and there are many, many more readers out there . . .
--Dave Axler