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Suit Yourself™ International Magazine #65: Islesboro Island A 501(C)(3) Organization

  

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Suit Yourself™ International Magazine #65

 

 

Islesboro Island A 501(C)(3) Organization

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Upon request, reprint permission and an addendum of substantiating resources are available for all articles. When requesting reprint permission or addenda, please include the issue date and full issue title. All articles are copyright © Debra Spencer, Suit Yourself ™ International. All rights reserved. ISSN 2474-820X.
 

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 I hope this is enjoyable and useful to you!

Debra Spencer

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Islesboro Island A 501(C)(3) Organization

   Introduction 

A well known scientific observable is the principle of the change point, a precise moment of change. Any compound substance, in other words any substance made up of one or more parts, will undergo an alteration in atomic structure, and thus a transition in chemical properties, at a precise moment of pressure and temperature. This precise transition point, when the substance changes its' "nature", is referred to as its' change point. Everything about that substance will appear stable up until that precise point, and after that, it's something else entirely, as anyone who has ever welded soldier can tell you.

   

 

Change points are not gradual changes; they are sudden.

 

Change points give a new meaning to the phrase "the last straw on the camel's back." 

 

Islesboro island is approaching just such a change point. It is not the only place that is, but the effects are clearer and easier to observe primarily because the island has a year round population of only 500 people, and a summer population of over 5000, an increase of a factor of ten.  

Islesboro is nearing a change point because the form of democracy used to determine its' infrastructure is radically changing.  Instead of an amalgamation of opportunities presented by migratory families with a dependency on small seasonal businesses, Islesboro's job opportunities, income, wages, and lifestyle have grown increasingly dependent on the proliferation of 501(C)(3) Organizations throughout the infrastructure as the only sustainable option model for living.

The irony is that the proliferation of 501(C)(3) Organizations have as their agenda the protection and preservation of the very "lifestyle" that their presence in quantity undermines. As the saying goes, "My, how the old neighborhood has changed!". 

While WED's Disneylands are run for profit, 501(C)(3) Organizations are not. Equally unfortunately, by definition, 501(C)(3) Organizations are organizations, and organizations  are concerned with agendas, not individual people.  As an example of organizational indifference, the Maine State Ferry Service, a state run organization, recently redefined ferry transport rates to rebalance their system load, ignoring the fact that the new rates for Islesboro end up so high, they exceed the island's year round residents income ability to pay for them.

One can only hope they also factored in the cost of an income boycott producing substantially reduced ferry use.  Corita Kent once said "Everything in moderation, including moderation." 

 

 

   What's a 501(C)(3) Organization?

A 501(C)(3) organization is a corporation, trust, unincorporated association, or other type of organization exempt from federal income tax under section 501(C)(3) of Title 26 of the United States Code. It is the most common type of the twenty nine 501(C) types of nonprofit organizations in the United States. The 501(C)(3) organizations range from charitable foundations to universities and churches. The benefits of 501(C)(3) status in addition to exemption from federal income tax are their eligibility to receive tax deductible charitable contributions.

Several requirements must be met for a charitable organization to obtain 501(C)(3) status.

 

These include the organization being organized as a corporation, trust, or unincorporated association, and the organization’s organizing document (such as the articles of incorporation, trust documents, or articles of association) must limit its' purposes to being charitable, and permanently dedicate its' assets to charitable purposes. The organization must refrain from undertaking a number of other activities, such as participating in the political campaigns of candidates for local, state, or federal office, and must ensure that its' earnings do not benefit any single individual. Most tax exempt organizations are required to file annual financial reports at the state and federal level.

 

There are two different exempt classifications of 501(C)(3) organizations: public charities, and private foundations.  

 

In the United States, a charitable organization is an organization operated for purposes that are beneficial to the public interest. There are different types of charitable organizations. The precise definition of "charitable organization" is determined by the requirements of state law where the charitable organization operates, and the requirements for federal tax relief by the IRS. The requirements and procedures for forming them, and the registration and filing requirements, all vary by state. Every U.S. and foreign charity that qualifies as tax-exempt under Section 501(C)(3) of the Internal Revenue Code is considered a "private foundation" unless it demonstrates to the IRS that it falls into another tax category. "Private Foundation" is the default. 

 

Generally, any organization that's not a private foundation (i.e., it qualifies as something else) is usually a public charity as described in Section 509(a) of the Internal Revenue Code.  A United States public charity, identified by the Internal Revenue Service (IRS) as "not a private foundation", normally receives a substantial part of its' income, directly or indirectly, from the general public or from the government. Public support must be received from fairly broad sources, and may not be limited to only a few individuals or families. Public charities are defined in the Internal Revenue Code under sections 509(a)(1) through 509(a)(4).

 

There are private foundations, and public foundations.

 

Foundations are, in general, grantmakers, and they're usually called "grantmakers" or "non-operating" foundations.

 

 Private foundations usually use their endowment to make grants to other organizations, which in turn carry out the foundation's goals. 

 

 

There are, however, some private foundations that engage in service activities directly on their own, achieving their goals directly, using the funds and grants they receive. As this is also true for most public charities, the various types of foundations, and what they do and don't do, can be confusing. 

 

Private foundations, a.k.a.non-operating foundations, don't solicit funds from the public. Their principal funding comes from an individual, family, corporation, investments, endowments, or some other single source.

 

This income is used to make grants to other organizations, rather than being disbursed directly for charitable activities, and thus private foundations are more often grantmakers than funds solicitors. Private foundations are defined in the Internal Revenue Code under section 509(a) as 501(C)(3) organizations, which do not qualify as public charities. A private, nonprofit organization called GuideStar also provides information on 501(C)(3) organizations.

 

In contrast, a public foundation, or public charity, generally receives grants from individuals, government, and private foundations. Some public charities also engage in grantmaking activities, however most conduct direct service or other tax-exempt activities.

 

Churches, incidentally, must meet specific requirements in order to obtain and maintain tax exempt status; these are outlined in "IRS Publication 1828: Tax guide for churches and religious organizations". That guide outlines activities allowed and not allowed by churches under the 501(C)(3) designation. 

 

Many different organizations can qualify for 501(C)(3) status; Islesboro's volunteer fire department is one example.

 

Other examples include, but aren't limited to organizations for religious, scientific, literary and educational purposes, testing for public safety, or fostering national or international amateur sports competitions, for the prevention of cruelty to children or animals, relief of the poor, distressed, or underprivileged, working to eliminate prejudice and discrimination, defending human and civil rights secured by law, combating juvenile delinquency,

 

for construction or maintenance of public buildings, monuments, or works,

 

and for combating community deterioration.

 

As a result of the Johnson Amendment enacted in 1954, section 501(C)(3) organizations have a political-activity prohibition. They're prohibited from supporting political candidates, and are subject to lobbying limits, having a choice between two sets of rules establishing an upper bound for their lobbying activities. They are prohibited from conducting political campaign activities to intervene in elections to public office.

 

However, when every basic service in a town is either a 501(C)(3) organization, or supported by one, or funded by one, or employed by one, or somehow related to one,

 

this makes voting useless.

 

 

   How Times Have Changed

 

In the past, while the island was establishing its' infrastructure as a viable community, it needed schools, churches, a town office,

 

a fire department, medical and emergency protocols, 

 

and all the other basic services taken for granted in American towns.

 

 Funds were openly solicited primarily through holding local community events such as knitting circle sales and bake sales,

performances of plays and music, dances, afternoon tees, and puppet shows.

 

The entire community was actively involved in raising whatever was needed to accomplish well-known goals, and this included donations of materials as well as specialized services. 

 

Today, funds are raised primarily via non-profit 501(C)(3) corporations, and solicitations for substantial funds for their organizations are mostly private.

Events supporting these endeavors are held primarily over the summer months, to maximize attendance.  

 

Modern "donations" take modern forms, including but not limited to stocks, bonds, tax shelters, brokerage accounts, interest, property, matching funds, co-purchase agreements, grants, and US dollars.

The Islesboro Pre-school, for example, no longer mails a solicitation request letter to residents, but instead solicits directly to a select few and via their web site, successfully obtaining larger amounts from fewer donors.

 

The values of commitment and dedication have been replaced by valuing return on investment.

 

In spite of these non-profit 501(C)(3) corporations' best-intentions claims, the island's year round residents feel increasingly ignored and discarded.

The infrastructure supporting island community is going to hell in a 501(C)(3) hand-basket. 

 

 

501(C)(3)s have trade-offs that are not a win-win for all. When they dominate a community, their agendas also dominate.

 

En masse, they have the potential to eclipse community ventures whose sole focus and purpose is weaving together disparate personalities into a community through mutual action, united in the community's causes. 

 

501(C)(3)s are not about people, they're about making money go farther than it might otherwise, and as a result, 501(C)(3)s support "endeavors" not people; they're clueless about people.

 

501(C)(3)s, while courteous, just don't find it profitable to "engage" with year round residents, who are worthless as financial contributors. You can call 501(C)(3) indifference by any name you want, but it still adds up to discrimination.

 

Those who settle here year round with modest incomes have very few opportunities to become directly involved with the island's infrastructure and its' welfare. There are fewer and fewer opportunities to directly support.

 

The summer season offers the majority of opportunities for meeting others if one is not a member of the exclusive seasonal Tarratine Club.

 

The larger fundraising events are usually privately held or expensive to attend.

 

There are few opportunities for average islanders to work together year round in support of a common cause.

 

Fewer year round residents are bothering to rent tables to sell wares at fundraising events held during the year,

 

and as a result,

 

fewer people are attending these small fairs to find finds.

 

Small fairs held in the ICC building find their upstairs tiny tables competing directly with the ICC's own gift shop, open for business on the ground floor.

 

The reaction of the average islander to 501(C)(3) corporate invasions may or may not be conscious, but it's apparent nonetheless,

 

most visibly in the formations of local committees wanting to raise awareness of some locally impacting issue, who send flyers via snail mail.

 

 

 

 

 

 

 

 

In the past, this sort of home grown media was accomplished far more directly, and more reliably, by a knowledgable person simply writing an article about it for the trusted local paper.

 


 

 

 

 

 

 

 

A person's word was their bond, and they thought a lot before speaking. Trusted news went fastest by word-of-mouth.

 

Raising awareness is never enough; people have to care about an issue in the first place, before any increase in understanding leads to tolerance of others, common ground, and solutions. Ultimately, all individual action stems from emotion. Community is less about why some issue is important, than it is respect and comprehension of the emotional consequences to everyone when no solutions are found. 

 

According to Islesboro's own published history, people were more "plain speaking" then, with fewer hidden agendas, and less likely to buy anything they didn't need. They communicated to inform, simply, and directly, without jargon, corp-speak, or merde. Almost no one can do this today, on any subject, in any media format; obfuscation through reframing is the current fashion because it sells things, without considering whether or not this is honest.  This ubiquitous dishonesty has made the world skeptical, and most of us suspect things that don't add up.

 

Most people are not so easily mislead when their lives are at stake, and any uncertainty over where something's been means don't drink it, don't sit on, don't eat it, and don't bet on it either.

 

Unfortunately, many of us also doubt our own bewilderment. Don't. Believe your instincts. When you're driving, your instincts are breaking your car, at least until AI takes over your car.

 

In the past, island news came from trusted friends, neighbors, town meetings, and local papers, probably in this order. This is still true, and in spite of television and the internet, which has affected church attendance and dampened local issue awareness.

 

In the past, year round residents were fully aware of the important issues, in possession of accurate facts and priorities, and quickly informed about what was being done.

 

Now it seems everyone is confused, there are an increasing number of unpleasant surprises, and it's not that we don't trust our friends, neighbors, town meetings, and local papers; it's just that we know they're as confused as we are.

 

A community forms because like-hearted individuals want to accomplish a goal, and know their best shot at answers and solutions comes from cherishing their differences.  Islanders in particular want to feel they contribute to their infrastructure.

 

Clarity versus conflation: you can't have it both ways; you can't get there from here.

 

When a community has no ways to overcome its' own struggles, no activities to help join efforts in common purpose, then it ceases to function as a community.  

 

In a community, every effort matters, no matter how small, no matter how large, and this is why communities take pride in solving their own problems, because solving their own problems together increases commitment and dedication, and thus the strength of the community.  

 

When a non-profit organization solves your problems for you, you don't profit from learning to solve your own problems, you cease functioning as a community, and instead, function as an indifferent 501(C)(3) non-profit corporation.

 

Community and self-respect are earned, as is community self-reliance, and this is hampered by too many free rides, no matter how well intentioned their make over of you may be.

 

Some of us don't want to be Cinderella in a palace, or join a committee formed to make a simple decision; we would much rather invest in friendship than funds, dress comfortably, and clean our own homes. In the future, however, the question of how to earn a living while living on an island may well change from "What do you do for a living there?" to "For which 501(C)(3) do you work?"
 


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Thanks for reading.
 
Best Wishes,
Debra Spencer

 

 

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All Content is © Debra Spencer, Suit Yourself™ International. Technical Library FAQ Index ISSN 2474-820X. All Rights Reserved. Please do not reproduce in part of in whole without express written consent. Thank you.

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All Content is © Debra Spencer,Suit Yourself™ International.Technical Library FAQ Index ISSN 2474-820X. All Rights Reserved. Please do not reproduce in part or in whole without express written consent. Thank you.
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All Content is ©2019 Debra Spencer, Appanage™at www.suityourself.international Suit Yourself ™ International, 120 Pendleton Point, Islesboro Island, Maine, 04848, USA 44n31 68w91 Technical Library FAQ Index ISSN 2474-820X. All Rights Reserved. Please do not reproduce in part or in whole without express written consent. Thank you.

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All Content is ©2019 Debra Spencer, Appanage™at www.suityourself.international Suit Yourself ™ International, 120 Pendleton Point, Islesboro Island, Maine, 04848, USA 44n31 68w91 Technical Library FAQ Index ISSN 2474-820X. All Rights Reserved. Please do not reproduce in part or in whole without express written consent. Thank you.
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