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A Bank for Student Hackers

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Re: A Bank for Student Hackers

#21

Post by zachlatta »

ganoushoreilly wrote: post #20
zachlatta wrote: post #12

Earlier 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.

"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.

Sorry, should definitely clarify better - it comes down to whether you're filing a 1023 or a 1023EZ. Many events need to file 1023 due to expected annual budget being over $50K.

I'm happy you were able to get your status so quickly. It took us about a year. The filing fee for the 1023 alone is $600.

The IRS has an overview of the expected timelines at https://www.irs.gov/charities-non-profits/charitable-organiz..., though they often get backlogged by months. The filing instructions for the 1023 are also a fun read: https://www.irs.gov/pub/irs-pdf/i1023.pdf

Re: A Bank for Student Hackers

#22

Post by soared »

> To do it yourself, you must incorporate and seek non-profit status which can take over a year and thousands of dollars in the United States

Joint business bank account at any major bank solves this. File for an llc in colorado (~$65) and open the account. Tax free, fee-free, and you can get multiple debit cards.

Re: A Bank for Student Hackers

#23

Post by arcdigital »

soared wrote: post #22

> To do it yourself, you must incorporate and seek non-profit status which can take over a year and thousands of dollars in the United States Joint business bank account at any major bank solves this. File for an llc in colorado (~$65) and open the account. Tax free, fee-free, and you can get multiple debit cards.

That wouldn't exempt you from federal tax though.

Re: A Bank for Student Hackers

#24

Post by jpjamipark »

gbear605 wrote: post #19

I'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.

As a FIRST alum, this would've been so helpful when looking for sponsors/donations. When you route your money through a school, it becomes a total pain to get access to it. A parent had to call/email the school for months just to get access to the money we needed to buy parts.

Re: A Bank for Student Hackers

#25

Post by zachlatta »

soared wrote: post #22

> To do it yourself, you must incorporate and seek non-profit status which can take over a year and thousands of dollars in the United States Joint business bank account at any major bank solves this. File for an llc in colorado (~$65) and open the account. Tax free, fee-free, and you can get multiple debit cards.

Keep in mind most of our students are minors and many are in situations where creating new entities that increase reported personal income would put them in a compromising position - ex. push their family over the income threshold for a welfare program and disqualify them.

Sponsors for high school events also typically look for 501(c)(3) status before giving to events that benefit their community. I'm sure an LLC is a great solution for many, but there's a reason high schoolers don't already do this for hackathons.

Re: A Bank for Student Hackers

#27

Post by tomc1985 »

Unless these are hardcore, graybeard-level computer nerds or people doing exploit dev, stop using the word 'hack'! Have they ever heard of Phrack, DEFCON, 2600, CCC, PoC||GTFO?

Unless they mean 'hack' in the authorial sense... carry on

Re: A Bank for Student Hackers

#28

Post by TomMarius »

This problem/market is very interesting and strange to me. In my country, you're able to open a bank account in 15 minutes, the only requirement is to have a parent present if you're under 15, of course you have to present your identity, and you have to deposit just 200 to 1000 CZK (7.5 to 50 dollars, or 5 to ±30 beers). No credit checks, no solvency requirements, no debt-free only policy, nothing like that, you literally walk out with a working bank account (and a debit card will arrive by mail shortly after) that is completely free for everyone and for all use cases that an average person has.

Bank accounts are treated as marketing for other financial services so you will even get free money if you open it in a bank that currently has a promotion (usually around 200 to 500 CZK - 7.5 to 20 dollars, or 5 to 12 beers).

Re: A Bank for Student Hackers

#30

Post by stephen_g »

driverdan wrote: post #7

This 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.

Yeah, this is straight up illegal in my country (Australia) - to call yourself a ‘bank’ referring to financial services you need to be a licensed Authorised Deposit-taking Institution (ADI) with our prudential regulator (APRA). This requires going through a compliance program that would probably take longer than a year, having $50 million (!) of paid up capital, etc.

Just a few months ago they did bring in a new restricted ADI licensing scheme though where you can start with only $3 million and get started quicker but there are a bunch of restrictions.

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