Re: [Gnu-arch-users] NPO Time?

[Tom Lord]

    > From: Andrew Suffield <address@hidden>

    > On Thu, Jan 29, 2004 at 09:45:28AM -0800, Tom Lord wrote:
    >> * How much money do you need?

    >>   I was hoping you'd ask that.

    >>   Unfortunately, the honest answer has to be: "Uh....I'm not sure."

    > I was actually going to ask "Do you know?", 'cause I suspected
    > that you don't.

I don't with precision -- as with many complex endevors, it makes
sense to pursue _some_ details in an on-demand way rather than wasting
effort speculatively.

I do have more of an idea than revealed in the post.  A few (roughly
8) years back I explored the topic of California NPOs in some depth.
Not all but much of that knowledge is still valid.

Part of the issue today, in this context, is non-determinism.  There
are opportunity-based design-decisions that can make substantial
differences: for example, pie-in-the-sky-wise, hiring professional
executive and fundraising staff earlier rather than later can greatly
increase the chances of success -- but also would increase the
necessary start-up costs and is only possible if both funding for that
and appropriate people for the positions are determined.



    >>   Fees for filing for NPO status are pretty cheap.

    > I think you've underestimated it a little. In total, in the US, you're
    > going to need a few thousand dollars to do the administrative stuff
    > (varies depending on state).

If on a shoestring, you can get by for quite a bit less than "a few
thousand" dollars in California.  "A few thousand" is realistic for
minimal professional help with the matter, as nearly as I can tell.


    > This might not be the best time to sink that much money into a
    > startup.

"startup" implies, to me at least, a for-profit venture investment.
That is not what this is.


    >>   Recruiting executives and seed funding?   I'm not an expert in those
    >>   matters.   I can only (wildly) guess -- so I won't.   Other
    >>   successful NPOs have grown from pretty small seeds, though setting a
    >>   record in that regard isn't one of my goals.

    > Since you want it to do actual, practical work, I'd say that you'd
    > need $50k-100k seed money, for initial capital expenses, and you'll
    > either need people who will take an IOU in lieu of salary or some form
    > of regular revenue on top of that.

It gets more complicated than that for a number of reasons.  Depending
on your particular corporate form, executive officers may be
required.  Their feduciary relationship to the NPO may be sharply
constrained in some ways.   If substantial funding _can_ be raised,
the best way to manage it is in two stages: some prior to formation
and some following.

NPOs can be eligable for loans although that is only a realistic route
to take if confidence in the prospects of the organization are quite
high.


    > That's assuming you can make do on a shoestring budget for at least a
    > few months. These things *eat* money at the very start, and most of
    > it goes on irrelevant crap that you wouldn't even think of, not
    > anything really germane to the objectives.

Like: advertising requirements, money to open bank accounts, fees for
legal advice, intial fund-raising activities, stationary, paid labor
for administrative help, ISP services, postal box office services,
stamps and express package deliveries, travel expenses, costs
associated with meeting sites, trademark registration, printing
mailers, and on and on and on.  And heaven forbid we'd want actual
office space early on.  Yes, I'm aware.


    > Unlike a regular corporation, it wouldn't have the option of
    > taking out a hefty loan. That's how most startups do it, that
    > don't take venture capital.

    > [I don't have any direct experience in this stuff, but my uncle
    > does, so I have a general idea what is involved.]

I have a general idea, too, though not from your uncle.


    > You might want to make a temporary arrangement with an existing
    > organisation, like the FSF or SPI, to handle arch for now. That
    > way you get tax-free donations and payment systems that won't
    > make corporations scream and run away (they really hate personal
    > cheques and paypal), without having to wait.

In actual practice, such approaches are being attempted and obstacles
are arising.   That's part of the inspiration to raise this topic at
this time.

    > Collecting enough money to set up something like this is not
    > going to happen in the short term. Think months, maybe years,
    > depending on the sort of contributions you get and how much you
    > personally drain from the fund in that time. (It's not
    > unreasonably optimistic to think that you could get it up and
    > running by the end of the year, but not in 1Q and probably not
    > in 2Q either)

Excellent points generally.  The timeframe really depends on what
opportunities do or don't arise.

-t