Wednesday, February 4, 2009

Creating the Non-Profit Corporation: 4 February 2009

The Global Understanding Institute is presently an unincorporated voluntary association, with the intent to file in 2009 to become a California non-profit public benefit charitable educational corporation, as defined by the U.S. Internal Revenue Service 26 U.S.C. § 501(c)(3). The organization has been functionally operating and growing as a voluntary association since August 2008, when our web site and blog began. Over the past six months it has been an evolving open-ended, informal group of friends and associates, mostly focused around a vision I personally championed for a new global non-governmental organization (NGO). Now, in 2009, it is time to achieve a formal legal structure so that we can bring our ideal goals to fruition and forge many of our plans into reality.

Why Incorporate?

One may wonder, if the organization has operated for nearly half-a-year as an unincorporated entity, why would the Global Understanding Institute need to incorporate at all? In a way, it does not. In existentialist terms, one never really needs to do anything. The world can continue on without another non-profit public benefit corporation. We’ve survived millennia as a species without one so far, after all.

Yet if we wish to accomplish many things, such as entering into contracts, raising funds, maintaining centralized accounts, becoming a credentialed educational facility, and to hold property or carry on activities which may survive the lives of any of the individual members, incorporation is one well-known and logical model to achieve these ends.

However, not everything that happens for the principle of global understanding will be, can be, or needs to be directly part of the corporation’s business. We want people to work for global understanding beyond what we, as an incredible minority of the world population, can accomplish. We want people to adopt and incorporate central principles of pluralistic, peaceful, egalitarian societies into their own lives and communities, regardless of whether that happens independently of our efforts or because of our direct aid.

Therefore, there shall always be one or more unincorporated voluntary associations of people working for global understanding. It would be utterly selfish if not patently absurd to think that we could control or want to control that emergent and deeply-held desire in any human heart.

We would still wish to engendera and help espouse such social organization given common principles, systems, and methods. For the worldwide unassociated voluntary association, we shall use the term Global Understanding Movement.
Global Understanding Institute (Corporation) & Global Understanding Movement (Unincorporated)

The term “Global Understanding Movement” is part and parcel of the Global Understanding Institute. The term will be embedded in various intellectual properties of the Global Understanding Institute: copyrights and trademarks. Yet part of “selling” the idea in in giving it away, and this “movement” is the portion that anyone can use, free of charge, hopefully to the support and not subversion of our principles. It will be far larger than the Global Understanding Institute itself. The GUI will simply be the first operational corporation of that movement. Hopefully it will remain central and relevant to the movement as it evolves over this century.

If you are inspired by our work to create a Global Understanding Movement in your own community, or wish to dedicate part or all of your operations for the cause of Global Understanding, please contact us so we might frame various forms of mutual interdependence, support, affiliation and cooperation.

Why a 501(c)(3)?

Once the decision to become a corporation was established, the decision of what sort of corporation to become is not insignificant. While talking to many advisors and friends, the first question was: Why a non-profit? Why not just make a for-profit corporation and make oodles of money with the idea of global understanding?

To me, as the central principal in the organization, it just seemed entirely counter to the fundamental sense of what we were trying to create.

For a “global understanding” organization to effectively remain global in nature, it seemed more the sense of the organization to ensure that the vast majority, if not potentially everyone in the world, could participate without it expressly benefiting a select few. We may have beneficiaries and paid staff in due time, and every organization needs to be funded for it to survive and operate, yet the organization itself should not be run for the specific private enrichment of a few individuals in the world. It seemed better to remain more modest and focus on a sustainable breakeven economic model.

There are other forms of non-profit organizations, classified as 501(c)(4), for civic leagues and social welfare organizations, which are allowed to perform political campaign efforts and lobbying. Others allow for fraternal organizations,

There are also professional and trade groups, common business or mutual benefit organizations, like a Chamber of Commerce, that share wealth and benefits amongst the members of the corporation. This structure also seemed to be lacking the general concept of being centrally focused on the public benefit. Mutal benefit groups, whether trade or professional organizations, are generally not run for the benefit of those beyond their own membership. Such a path, while good for many forms of local or topical organizations, did not fit the general sense of the movement.

Many public benefit organizations are relgious movements, like the Catholic Worker movement. Yet this might limit the organization to a specific religious worldview, which may preclude it operating well or at all in communities where that religious worldview is unrecognized or not held in the majority. Plus, there are many believers of various faiths, atheists, agnostics, and nondenominational spiritual people in the world for whom organizing a movement for global understanding as a “religion” would seem illogical, unnatural, untoward, or even heretical. Thus, remaining non-denominational seemed to be more appropriate.

There are some corporations that act like a non-profit, but refuse to file as a 501(c)(3) to avoid the onus of Government restrictions on their activities. They pay their taxes, and funds given to them are not tax-deductible, but they do the “good work” anyway.

In the end, the trade-offs of restrictions of activities for a 501(c)(3) seemed to be acceptable, while the benefits of tax deductibility of contributions for supporters, plus the tax-exempt status of the organization was seen as the best possible system to support a new and growing organization founded for charitable and educational purposes. It is the most-expected of the corporate structures and thus, would be the easiest to get momentum behind.

This decision in a way presents a great challenge. Because in 2009, many of the charitable and educational activities of the world will be impacted greatly or will significantly impact public policy and politics. Movements for global understanding may, in due time, topple governments or cause others to rise up or solidify their standing. The Global Understanding Institute will not necessary shy away from the salient political discourse or religious debate of our times. However, we must remain clear that the organization must remain open to differences of opinion, and not fall beholden to any single political or religious agenda.

If, in the future, some subset of the members of the Global Understanding movement wish to create a separate 501(c)(4) to perform political lobbying or to work on political campaigns, or others wish to create an organization that promotes understanding of commerce, or religious beliefs, or create a “global understanding” political party, or other particular subsets of activities that would be better incorporated under other sections of the U.S. code, that would not be procluded from consideration. Yet it would have to be a separate organization than the Global Understanding Institute, which would remain, as a corporate entity, nonpartisan and nondenominational.

The legal review and accounting of such activities would also need to be very firmly established, so that the Global Understanding Institute does not fall befoul of any intentional or unintentional violation of State or Federal law. While we seek a global understanding, we must not delude ourselves to ignore the presence of local law and jurisdiction over our actions.

What is Required?

In order to form a 501(c)(3), the organization must accomplish the following:
  • Draft and approve Articles of Incorporation & Bylaws
  • Attract and appoint an initial Board of Directors
  • Attract and approve initial Officers
  • File for incorporation with the State of California and the U.S. Internal Revenue Service
  • Create an Operations Plan and Budget for 2009, and a 5-Year Business Plan for 2009-2014
All of this, of course, on top of offering or performing any services, creating any works or producing any public goods, which our volunteers and friends are currently undertaking or considering.

State of Affairs

As of 2 February, 2009, the Articles of Incorporation and Bylaws have been drafted. We now need to have them reviewed and approved. I have sent around to a few people for review, and will likely send them around to more people. Once I have a first draft privately reviewed, to make sure there are no glaring errors or omissions, I will then post them for public commentary and discussion.

I am also privately soliciting certain individuals to be members of the initial Board of Directors. Yet I am more than interested to hear from you if you, or someone you know, may make for an excellent member of the Board. The Board has not yet been solidified, either in specific number or list of individuals. This is the precise time in history to step forward, and help alter the fate of an organization, and, hopefully, influence the state of the world.

In due time, I will present more regarding the state of the incorporation. For now, more work awaits.


-Peter Corless.
650-906-3134 (mobile)

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