> An underlying bank account with 501(c)(3) status, so donations to events are tax deductible
I'm not sure why the bank's tax status is relevant, since the bank doesn't own the funds. Also, most credit unions are nonprofit.
A Bank for Student Hackers
11–20 of 46 posts
Re: A Bank for Student Hackers
#12> An underlying bank account with 501(c)(3) status, so donations to events are tax deductible I'm not sure why the bank's tax status is relevant, since the bank doesn't own the funds. Also, most credit unions are nonprofit.
Important thing here is that events working with us can offer tax deductions to donors through our 501(c)(3) tax status.
Most sponsors for high school events want to see some sort of non-profit status when giving and it takes over a year and thousands of dollars to create a new entity in the US. With Hack Club Bank, they can get set up under our parent entity in under a week.
Re: A Bank for Student Hackers
#13> An underlying bank account with 501(c)(3) status, so donations to events are tax deductible I'm not sure why the bank's tax status is relevant, since the bank doesn't own the funds. Also, most credit unions are nonprofit.
Important thing here is that events working with us can offer tax deductions to donors through our 501(c)(3) tax status. Most sponsors for high school events want to see some sort of non-profit status when giving and it takes over a year and thousands of dollars to create a new entity in the US. With Hack Club Bank, they can get set up under our parent entity in under a week.
I see, donations are technically made to Hack Club. That's a cool hack, though I believe that you need some level of oversight over spending.
Re: A Bank for Student Hackers
#14Some people here might not like it but Cryptocurrencies can come in handy in this area.
It can provide transparency too.
Re: A Bank for Student Hackers
#15Earlier quoted context omitted.
Important thing here is that events working with us can offer tax deductions to donors through our 501(c)(3) tax status. Most sponsors for high school events want to see some sort of non-profit status when giving and it takes over a year and thousands of dollars to create a new entity in the US. With Hack Club Bank, they can get set up under our parent entity in under a week.
I see, donations are technically made to Hack Club. That's a cool hack, though I believe that you need some level of oversight over spending.
Yeah, absolutely. This is really where the automation comes in - there's no way we could run this if we had to manually approve every transaction.
All the debit cards are pre-paid from event account balances and have a system in place to collect receipts and restrict categories that can be spent in, if needed.
We're planning on doing a gradual roll out where we can be extraordinary careful to make sure we catch all the kinks early on.
Re: A Bank for Student Hackers
#16This is a great idea. Have you discussed this with a lawyer? It seems like this would qualify you as a money transmitter which has very strict requirements in many states. There are restrictions on the word "bank" and how that term can be used too.
Fortunately we're not acting as a money transmitter, but rather as a fiscal sponsor - see https://en.wikipedia.org/wiki/Fiscal_sponsorship . A very common practice in the non-profit world, but very much not something that is accessible to students. Most fiscal sponsors out there are very bureaucratic and not set up to handle short-term engagements like hackathons.
You've had an attorney with experience in this area confirm and help establish (e.g., by drafting the sponsorship contract) this arrangement?
Re: A Bank for Student Hackers
#17Earlier quoted context omitted.
Fortunately we're not acting as a money transmitter, but rather as a fiscal sponsor - see https://en.wikipedia.org/wiki/Fiscal_sponsorship . A very common practice in the non-profit world, but very much not something that is accessible to students. Most fiscal sponsors out there are very bureaucratic and not set up to handle short-term engagements like hackathons.
You've had an attorney with experience in this area confirm and help establish (e.g., by drafting the sponsorship contract) this arrangement?
Yup, we're working with a non-profit law firm here.
Re: A Bank for Student Hackers
#18Earlier quoted context omitted.
Fortunately we're not acting as a money transmitter, but rather as a fiscal sponsor - see https://en.wikipedia.org/wiki/Fiscal_sponsorship . A very common practice in the non-profit world, but very much not something that is accessible to students. Most fiscal sponsors out there are very bureaucratic and not set up to handle short-term engagements like hackathons.
You've had an attorney with experience in this area confirm and help establish (e.g., by drafting the sponsorship contract) this arrangement?
Hard work and innovation vs Government monopolies written by the establishment...
Oh please government keep me safe from these nice people....
Re: A Bank for Student Hackers
#19I'm not positive, but it seems like a natural direction to look toward would be FIRST robotics teams. New teams face a lot of challenges, one of which is getting to a place where they can get donations and have access to their funds.
Re: A Bank for Student Hackers
#20> An underlying bank account with 501(c)(3) status, so donations to events are tax deductible I'm not sure why the bank's tax status is relevant, since the bank doesn't own the funds. Also, most credit unions are nonprofit.
Important thing here is that events working with us can offer tax deductions to donors through our 501(c)(3) tax status. Most sponsors for high school events want to see some sort of non-profit status when giving and it takes over a year and thousands of dollars to create a new entity in the US. With Hack Club Bank, they can get set up under our parent entity in under a week.
"takes over a year and thousands of dollars to create a new entity in the US" This is a very misleading statement. 4 years ago I setup a 501(c)3 non profit and was able to get state and federal recognition, as well as all licensing necessary handled in a 4 month period from start to finish for under $400. What it does take is persistence and patience.