The membership needs to be kept up to speed on all the affairs of the club, even the boring legal stuff that is not as interesting as flying stories.
There will be some important voting required to complete our non-profit incorporation process so please take a few minutes to become informed. Feel free to email with questions or come to the Tuesday club meeting. Thanks for participating in club operations!
Overview: The Fellow Feathers of Fort Funston Hang Gliding Club was incorporated as a non-profit mutual benefit corporation in 2007. The main reason for incorporating was to give liability protection to the executive committee and other club members. In addition, an official non-profit corporation has more credibility in the eyes of governmental entities such as the GGNRA.
To avoid paying State and Federal income taxes, we began our non-profit application in late 2008 and found some areas that needed legal attention. In early 2009 I contacted San Francisco attorney Gene Takagi (attorneyfornonprofits.com) and met with him on April 9, 2009 to review our non-profit application and other documents.
Gene found areas that needed editing or modification and I have fixed most of those problems. One issue that requires legal expertise is the fact that our old association bylaws are unsuitable for a corporation. There are so many things that are different or lacking it is better to write our special needs into a fresh set of corporate bylaws, rather than visa versa. Gene has provided a standard set of corporate bylaws for us to customize to our needs. One very important provision we are including is the use of 20 hours flying experience at Fort Funston to define Voting vs. Non-voting members as conceived by Dan Brown.
There are a number of other technical decision points in for us to make and the Executive Committee is working on them now. I will bring copies to the next meetings for review and email a draft copy to anyone upon request. We will vote on their adoption at the May and June meetings.
Every nonprofit mutual benefit corporation must have a board of directors that is ultimately responsible for the governance and management of the organization. (That would be The Fellow Feathers of Fort Funston Hang Gliding Club) The club Officers / Executive Committee serve at the pleasure, and subject to the oversight, of the board of directors so having good directors is vey important!
How it works;
We need to elect a Board of Directors. The number of Directors we want is up to us. There is no maximum but Gene advises a minimum number between 3 and 15. If the number is too low it may seem like a dictatorship so I’m suggesting 5 to 11 members.
A director can resign any time they want, but if their resignation would put the BOD below the minimum number, a replacement Director would have to be appointed.
A Director may also be a club Officer, and a club Officer may also be a director, so the most simple solution is to have concurrent elections where the members vote for five Officers who would also be Directors. There might be a time when someone is willing to serve as an Officer but is not willing to be a Director, so having an extra Director or two would be good thing. The CA Secretary of State will need to be informed of any changes to the BOD so a form will need to be submitted after each election that changes Directors.
The Directors must hold one annual meeting for elections and meet an additional 3 or 4 times a year and document their meetings with minutes. They can call a special Board of Directors meetings or just have the BOD meeting in conjunction with a regular club meeting. There should not be much BOD work so most meetings will be shot and symbolic.
The BOD has to notify each member of the meetings so an authorization to use email for this will be added to the membership form.
It has also been recommended that we maintain our Bylaws strictly for the operations of the corporation and not the hang gliding side of things. We should move anything that applies specifically to hang gliding out of the bylaws and into our Fort Funston rules. One part in particular is Section X that describes the suspension and hearing process. I will make a motion to move this section into the rules at the next meeting.
Lastly, Gene devised a method for us to avoid violation of the IRS rule that limits our income from non-members to 35% of our total. We will enact a flexible membership fee where anyone may become a non-voting member by making a donation between $5.00- and $29.99. A HG pilot will pay $30- and need 20 hours at the Fort to become a voting member that would include storage privileges.
Other tax issues;
We need to keep other income below $1,000.00, which would include income from web ads and T-shirt sales. Based on our past sales, we would break the $1,000.00 threshold. Considering the fact that we will now have to charge sales tax on T-shirt sales and get into more reporting than anyone wants to deal with, I think it’s safe to say that the club should no longer be involved with T-shirt sales. We can’t even offer a “free” T-shirt with a minimum “donation” since this can be seen as a veiled sale. We can of course accept donations, so it is OK for someone to make and sell T-shirts on their own and give the money to the club. We just can’t be involved with it.
Tax reporting: Because our income is so low we can use a simple EZ-990 tax form or an even easier on-line “post card”.
I’m sure more questions will come up but these are the main points for now.
