Scott's Views

We have created a FAQ page to answer questions about Coolstreams' Tax-Exempt / Public Charity Status, including explanations of what portions of Membership payments and Donations are tax deductible. You can find the FAQ, plus a link to see a copy of our determination letter from the IRS, at:

Coolstreams Non-Profit FAQ >>>

Please consider an extra tax-deductible donation to support us - see our Donations page at this link:
Support Our ongoing Fundraising Campaign >>>

Why this took so long:

As many long term listeners know, we have been working on obtaining Non-Profit status for over 3 years. While there was a backlog at the IRS that added some time (we submitted our application in May, 2006), the bulk of the delay came about as a result of consulting too many "experts." Here's a quick summary:

Back in 2002-2003, when first planning this change, we were advised to seek legal assistance because we did not originally incorporate as a non-profit (making the application more complicated). With very limited financial resources, we sought pro-bono legal assistance from a local Volunteers For The Arts service. The first independent lawyer assisting us felt such an application would be difficult, but possible. We incorporated as a non-profit in February, 2004, and began to set up the Non-profit company. Before we were ready to complete the Exempt application, this Lawyer retired. We requested another Lawyer through the same service. This took another 5 months to obtain. One of the largest law firms in our area offered the services of two people on their staff (a lawyer and assistant). We forwarded all information immediately. 3 months later, they requested more information. About 3 more months later, the Lawyer informed us that the application was essentially hopeless and would almost certainly never be approved, complete with a multi-paged explanation with dozens of reasons detailing why not. We discussed this and explained more for about 2 weeks, then decided to try again (as frustrating as that seemed at the time, the most significant overall impact was that it wasted almost 9 months of valuable time).

Our Board of Directors then reluctantly approved taking a loan to hire a Lawyer to work on completing the application. We interviewed several Lawyers who felt it could be accomplished, but the cost typically quoted was near one full year of our revenues. Spending more than you earn is a difficult decision anytime, but worse when you have been advised that it may be fruitless anyway.

In January, 2006, we decided to try to use the power of the Internet to assist us. We researched as much as we could about similar organizations who achieved tax exempt status, found examples of ways to improve our corporate documents and required policies, and then decided to make an attempt to file the application on our own. We researched other Organizations' applications, found and learned from both those who were successful and who made mistakes, and incorporated these ideas into how we structured our application. We completed all of this and filed the application in 4 months from the start (May, 2006). In January 2007, we received a reply from the IRS with a 4 page list of questions. While a large list of questions is a bit intimidating, the majority of the questions were ones that we were very comfortable in answering. We replied within 3 weeks, received a few more follow up questions, answered those quickly, and received approval of our application on March 9, 2007. I should also add that the IRS agent reviewing our application was very clear and straightforward with what information he was looking for, and that made our ability to answer these inquiries much easier than we might have expected (based on all that prior advice).

The primary point here is that we believed in (and fully understood) our mission and motives, while the outsiders apparently did not. It's hard to predict how it would have gone had we skipped the pain and delays of consulting the experts in between, perhaps those experiences helped us prepare a better case and be more determined to see the process through. But we do regret the delays in accomplishing our objectives, and the resulting impact on developing our service and mission.

One other good outcome, as I mentioned in the prior post, is that we accomplished this without spending excessive Membership funds (both present and future) on the process.

We are also not bashing Lawyers here either (even to the large firm that employed the Lawyer who told us to give up, we at least appreciate their initial interest in assisting us). We know some nice Lawyers. We just didn't know one who could assist us with these specific issues.

However, we are always looking for assistance in any area. If you are a fan/supporter of our efforts and have a specific skill or knowledge that you can help us with occasionally, please let us know. Use our Members tab for the links to get in touch with us, and we'll be forever thankful!

Thanks to all of our members and supporters for your patience during this process, and most of all, for your continued support of our efforts!

Labels: 501(c)(3), donations, membership payments, memberships, tax deductions, volunteering