Gen FAQ

Before reading any of the FAQs, the key to understanding this process is that whenever you create a nonprofit group, it takes two steps: incorporate with the state, which gives you legal protection but does not give you tax exempt charity status, then apply with the IRS, which gives you the tax exempt charity status.

So we are no longer going to be a part of National?

You are still a part of National. National is one umbrella organization with 120 (give or take) chapters, and you are one of the chapters. This is the set up we use now, we are just creating a legal structure of chapters.

How does my event benefit from National getting a GEN?

• • Legal Protection. Right now, if Anytown USA Pagan Pride got sued, the Plaintiff could take your money too. All the "assets", the money, technically belong to one corporation - National. "National" grossed $60,000 last year (totaling the money raised at all your events). ALL OF THAT is up for grabs if any ONE of you gets sued. All your local event bank accounts are at risk. The GEN breaks that up. So under the GEN, and assuming you did the proper paperwork, if one event folds under a lawsuit, it would be terrible of course, but the entire Project - including you - won't be bankrupted.

  • More accountability to your community, which they will appreciate. They have a Board of Directors to consult instead of a sole LC when they have suggestions or requests for changes.

  • Easier turnover, because when one LC quits, other experienced LC's stay behind. And you don't have to worry about training a newbie.

  • Multiple people control the money, which is always a good thing.

National is already a nonprofit. Why should I have to do any paperwork at all?

The IRS requires each chapter to have its own Articles of Incorporation or Articles of Organization to get a GEN number.

Why join the Project at all if I am still doing paperwork?

Joining National gives you automatic tax-exempt, nonprofit charity status.

You have to do much less paperwork if you join National, than if you did it on your own. To create a nonprofit, you need to file two sets of paperwork - one with the state, which is short and costs $10-$100, and one with the IRS, which is long and can cost $500. If you join the Project, you do not have to file the long, expensive IRS application, you only have to file the short, cheap state paperwork - and we have done a form for you and you only have to fill in the blanks!

Joining a GEN is a substitute for applying for 501(c)3 status with the IRS. Local chapters in the GEN don't have to do that.

Joining the GEN means less yearly paperwork to submit to the IRS, and National will help with that.

Legitimacy. A lot of things will go a lot easier as you plan your event, if you are able to tell people (like city officials) that you are backed by a national organization.

You get to tap into all the knowledge and experience on this issue that the National Project has developed over the years.

Best of both worlds: getting to be a charity, without having to do all of the charity paperwork.

How often do I have to do this?

ONCE! In fact, a past LC might have ALREADY done it for you! If you are unsure, check with the National President who has a record of all local organization's "entity" information. This only needs to be done once, and lasts until a local "revokes" it. If a past LC did it once, future LCs can rely on that as long as a past LC did not "revoke" it.

I don't have time to do handle a whole bunch of new paperwork!

It is only two forms, which we have developed for you to fill in. This will take far less time than getting city permits or insurance. And filing this paperwork and becoming a real "entity" or "Corporation" will probably make it easier to get city permits and insurance. There is a lot of paperwork involved in running an event. This is only a small part of it. Plus you will have to do this paperwork anyway, and more.

A good explanation is here: http://www.suite101.com/blog/ekennen/getting_a_group_tax_exemption

Incorporating

So do I have to incorporate?

Generally, yes, you have to incorporate in your state. You can be an unincorporated association in some states, but not in others (see below). But you don't have to fill out the 501(c)3 application and spend the $500.

Why do I have to incorporate? Why isn't joining the GEN enough?

Because the IRS requires chapters of a GEN to incorporate or be unincorporated associations.

Incorporating prevents the people who run the event from getting sued as individuals if something happens at your event. If someone gets hurt, and you have incorporated and done all the other things you are supposed to do, then an injured person can only sue the event's corporation, not you. Basically, incorporating protects your house (if you own one) and your own money.

It also makes your organization more legitimate, and therefore makes it easier to deal with the city and the suppliers you will need to deal with to put on your event.

Why do I have to deal with all this paperwork?

For legal protection, so you don't get sued if an accident happens at your event. So the person suing can't come after your house.

Also, this paperwork is really short. It is shorter than the IRS application for tax exemption, which you would have to do if you do not "Join the GEN." It is also shorter than the paperwork you will have to do to rent a park for your event. This is one of the easiest parts of being an LC. The paperwork is done for you and you just have to fill it in.

My state requires information in our Articles of Incorporation that the National form does not have. What should I do?

Add the information your state requires to the National form. Do not remove anything from the National form; everything on the National form is an IRS requirement.

Am I done after filing all this paperwork?

No. There are other things you need to do to maintain the Corporation, like have semi-annual Board of Directors meetings, electing Officers, keep good minutes, and not commingling personal money with event money.

We are too small to incorporate!

Some events are really small, and the risk of something happening at their event that would lead to a lawsuit is low. But the risk is never zero. This process will not take long, and it might be worth it someday. Also, you can rent a city park in the corporation's name instead of your own.

If you are truly too small to handle this, and there are other small events in your state, consider banding together and forming one corporation or association that oversees two or more events in the same state.

So, not only does each event need an EIN, we must also incorporate in our state?

Yes. But you do not have to apply for charity status with the IRS. See above.

I sent our paperwork to Brian. Were we also supposed to file incorporation papers with our state?

If you are a corporation, yes. If you are an unincorporated association, maybe yes and maybe no. Check with your state. You might find the answer on your state Secretary of State or Department of Corporations website.

My state asked me if we are a Sole Proprietorship, a Tax Exempt Organization, or as Limited Partnership/Limited Liability Partnership. Which are we?

Tax Exempt Organization.

Charity Status

So incorporating does not give us charity status?

No, it does not. Only the IRS grants charity status. You will incorporate with the state as a nonprofit, but that does not actually prove to the IRS that you are a nonprofit or that you deserve to be exempt from corporate tax. Again, think of two angles: the state angle and the IRS angle. You still have to show the IRS that you will operate as a charity, by completing their 30 page application, unless you join the GEN. If you are part of the GEN, the IRS accepts PPP National's representation to the IRS that you are operating as a charity.

So we can no longer use PPP's 501(c)3 status?

Our 501(c)3 status is our charity status, and yes you are using National's charity status. You just are forming your own corporation and getting your own EIN. But after that, you still use National's charity status and bypass the IRS application.

Do we have to file our own tax forms now?

A short tax form will be required. The form just asks for some basic information about your local organization. National will assist with this when the time comes.

Getting an EIN

So we can no longer use National's EIN?

You are supposed to stop using National's EIN and get your own, but this only takes a few minutes. See GEN paperwork and SS-4 answers.

How do I fill out Form SS-4?

Answers are posted here.

When I called to get an EIN, the IRS asked for my Social Security number and I do not want to give it.

Getting an EIN for your corporation will NOT affect your personal credit, your personal tax forms, or your personal bank accounts in any way. They are asking for your own Social Security Number for identification reasons.

Existing Corporations/Affiliated events

We already have our own EIN.

Great! You've done half the work.

My event also already incorporated. Do I have to do anything more?

If you have NOT applied to the IRS for charity status, then send Brian the corporate paperwork and the consent to join the GEN so you can be part of National's GEN, using National's 501(c)3 status.

My event already has 501(c)3 charity status. What do I do?

If your event, or the group that sponsors the event, has a letter from the IRS that gives your event an "initial determination of 501(c)3 exempt status" or a "final determination of 501(c)3 exempt status", then you do not need to do anything except send certain information to Brian for National's records. See this page for the info you need to send.

Another organization "runs" our PPD. What do I need to do?

Most likely, National will declare you an affiliate and you will have to do nothing. But you need to write to your RC and Brian to inform them of the details about who sponsors your event and how, so we can figure out how best to set it up. Some events only receive money from their sponsoring organization, and therefore have formed their own corporation to accept the money and run the event. Other organizations have been willing to assume legal responsibility for the PPD event (for example, by signing for their insurance policies and renting space for them).

I thought that for separately incorporated events joining the GEN was optional?

Separately incorporated events who HAVE done paperwork with the state, but have NOT applied for charity status from the IRS, should join the GEN. That way, you do not have to apply to the IRS, because we've done it for you. They should note that they have already done steps one through four on http://www.paganpride.org/lc/GEN.html, so they should just send me their Articles of Incorporation (with the state stamp on them) along with the form required in step five. 

Separately incorporated events who HAVE applied for charity status from the IRS, and have received a "determination" letter from the IRS, would have to rescind that to join the GEN. It is easier to just remain the way you are. You already have your IRS charity status. So events with IRS letters should not join the GEN and should do nothing in this process except send Brian their info by using this webpage 

The GEN is what gives you your IRS "tax exempt" status, if you do not already have it.

Forming a Board of Directors

I only have one LC, and no one else has stepped up to be co-LC?

The National Board approved a plan to allow neighboring events to band up and form one Board and one Corporation. If you are having this problem, *please* write to your RC, Brian, and your neighbors. Your neighbors might be willing to help you by including your event in their Corporation.

We only have two LC's and our state requires 3 to incorporate. What do I do?

You can band together with another event in your state (see the answer above this one), be an unincorporated association (but this is not preferred, because it might give less legal protection, as outlined above), or find a third volunteer to be a Director.

Should all our officers/Directors be LC's?

Eventually, yes. But we will request that they apply to be LC's at some later time, not now.

How many people do I need on my Board of Directors?

National requires at least two, one a President, one a Treasurer, so that no one person has total control of the event funds. Your state might require more than 2. Pleaser check Secretary of State or Department of Corporations website for this answer, or ask Brian for help.