FRC Team-ing
Well, what does it mean to be an FRC team? Turns out, unlike many of my other similar rhetorical questions, that the answer is rather simple: a number. Once you register with FIRST, you get a number and become a team, able to go to competitions and whatever you want! Simple enough, right? Well, there’s a catch. You need a couple things to actually register, or rather three: a mentor, a mentor, and 6,000 dollars. Yeah, little annoying; and then there’s a whole host of other complications that govern stuff like rookie status– for which we do not qualify, given that we have over five (thirty) veteran members, meaning we’re not eligible for several grants as well as the Rookie All-Star Award.
Still, that’s not really the core of the problem. That honor lies in the last component of the three requirements: the money. 6,000 dollars is a lot, even when we’ve already had 2,000$ worth of donations; as you might guess, this is where your membership fees are going to go. Well, I say that, but… where do they go? We can’t just take the checks and throw them at FIRST, or at least not nicely; we need a bank account! And do do that, we need something to peg that account to.
Banking
And why not someone like me, or our head mentor? Well, it turns out that being attached to large sums of money not strictly in your control is a rather bad idea. First of all, it’d mean that all debt from the team would be attached to that of the other: if one had trouble, the other would liable, and if one went bankrupt, well, all the funds from the other would have to be drained. Not fun. So we attach it to a corporation: but which?
Turns out there are a bunch of ways we could incorporate, assuming the metaphorical we, of course. The type you’re probably most familiar with is the C-Corporation, which is listed as a wholly separate entity on tax returns and such like that, where all shareholders are fully insulated from creditor claims. S-Corporations have all profits and losses reported on their owner’s personal tax return (or fractionally represented on each of their shareholders’). LLCs, or Limited Liability Corporations, are slightly different in that while S-Corporation owners are employees of the corporation, LLC owners are considered self-employed. Now, due to the amount of paperwork involved and our personal needs as a team, we’ll be going for a LLC, but with a rather specific appelation.
Non-Profits
If you remember from MVRT, everything you gave the team was considered tax-deductible on your parent’s tax forms- basically, since you were donating to a non-profit rather than using the money for your own good, the government allows to to use that to fulfill part of your obligation to the community normally met by taxes. Turns out there are a bunch of types of non-profits, enumerated in section 501 of the federal tax code; the one we want is known as a 501c3.
501c3s are are non-profits whos activities have any of the following purposes: “charitable, religious, educational, scientific, literary, testing for public safety, fostering amateur sports…” et cetera. For various reasons, we’re going for the ‘educational’ line of this clause, which qualifies us just fine for the designation. And what does that mean, exactly? Well, first of all, we’re tax-exempty, meaning that nothing we get in donations or grants goes to the government. Anything donated to us is similarly tax-deductible for the donator; and while this is definitely nice for private donators, corporations won’t even think of giving us money if they’re not assured of the same. The one problem is that we can’t use the profits of the company to benefit any specific individuals overtly; of course, this isn’t really a problem, for a multitude of rather obvious reasons.