response 25 of 43:

Oct 22 18:21 UTC 1995

re #21:  Sure.  There are exempt organizations that charge everybody for
         access.  Or nobody.  Or some middle ground.  The sale of
         internet services is a bit touchy, as "commerciality doctrine"
         dictates that if the service has a commercial value its sale
         is a commercial, not a non-profit, venture.  But that's a bit
         misleading.  If the purpose of Grex were to sell internet
         services at their approximate market value, that doctrine might
         come into play, indicating that Grex should (a) make such sales
         an insubstantial part of their otherwise exempt purpose, or
         (b) consider some other category of exemption, e.g., 501(c)(7)
         (social organization).  But the purpose of Grex is much broader,
         and its "sale" price is substantially below market value, so it
         is hard to view Grex as a "commercial" entity.

         The proposal on M-Net to bring about the $20/year membership was
         meant to alleviate two problems.  First, the "customer base" --
         patrons and members who were buying services from M-Net, and
         increasingly adamant about getting "value" for their payment --
         was the same group that controlled the organization.  Second, the
         organization was being supported almost exclusively through such
         sales, at or near commercial rates.  Each of these problems can
         be quite significant to the IRS, in evaluating an organization's
         exemption.

         If Grex were to formulate itself a bit differently in its
         presentation to the IRS -- say, with a purpose of "Bringing a
         community access bulletin board to the Ann Arbor community,
         accessible from around the world through the Internet, with low-
         cost access to the internet available to all interested users,"
         Grex would present a valid charitable goal.  Without changing its
         present appearance or rate structure.  (Suggestion -- get in touch
         with some non-profit "freenets" and find out how they characterized
         themselves to the IRS.)

         The only real change that may be necessary is to separate Grex
         membership from the purchase, even at the discounted price, of
         Grex services.  As Jan pointed out, the biggest failure of M-Net
         in selling $20 memberships is it has failed to tell anybody that
         they are available or why they should be purchased.  I don't
         think Grex would repeat that mistake.

response 27 of 43:

Oct 22 21:57 UTC 1995

I believe you have a copy of the 1023 for HVCN. If not, let me know
and we will send you a copy.

response 29 of 43:

Oct 24 19:15 UTC 1995

I agree with Aarons suggestions as well.  I have read through a IRS Pub#557
(Tax-Exempt Status for Your Organization) and have watched the 'circus' over
this issue at Mnet/Arbornet.

OTOH, I'm a newbie grexer and don't really know how this organization works
yet.  I'm sure that careful consideration of the organizational goals, the
corp 1023, and IRS Pub 557 will lead to an informed decision on which way to
go.  As Aaron points out, 501_c3_ is not the only tax exempt choice.

If the money can be found, I would always come down on the side of consulting
a professional specialist in the area.  If all the leg-work is done before-
hand, and the information is well considered and organized, a professional
consultant would be able to minimize his/her time and maybe even provide a
discounted rate (maybe even pro-bono, who knows?).

response 31 of 43:

Oct 25 12:29 UTC 1995

Wasn't it about a year ago that danr and popcorn met with a 
non-profit consultant or tax attorney, pro bono, and asked
some questions about our status?  I don't ever recall reading
about this person's recommendations.  Was it posted?  I'd
be happy to go back and look through the archives if only I knew
when it was entered, if it was.

response 33 of 43:

Oct 25 18:42 UTC 1995

Dan, did you go with someone else?  Am I totally misremembering 
here and confusing Grex with M-net?

response 35 of 43:

Oct 26 02:30 UTC 1995

I think that we may have talked about meeting with a lawyer, but no one ever
did.

response 37 of 43:

Oct 30 07:14 UTC 1995

rickyb - welcome to this fray ... <g>.

response 39 of 43:

Nov 2 00:33 UTC 1995

Are you thinking of the SCORE program -- can't remember the acronym meaning
for sure, but I think it is Service Corps of Retired Executives. Maybe?

response 41 of 43:

Nov 2 10:34 UTC 1995

Last I heard, they are still alive and in business. Their experince
and perspectives could be valuable.

response 43 of 43:

Nov 2 23:17 UTC 1995

That's it, SCORE, and the unit I contacted was in Detroit.  Didn't know there
was an AA chapter.