We have been working for the last few weeks on Form 1023 for the IRS which, if approved, would designate us as a 501(c)(3) public charity, allow us to operate as a tax exempt non-profit, and most importantly, start accepting tax-deductible donations from our community. Form 1023 is no joke: 26 pages 11 parts and additional Schedules A-H. According to the Journal of Accountancy, "the IRS estimates taxpayers will need an average of almost 15½ hours to prepare the form and all schedules, plus another almost 185 hours of record keeping and learning about the law or form."1. Frustratingly, after some wasted hours, we realized that we could actually fill out Form 1023-EZ, a much more streamlined form, that can be submitted online and doesn't require the work of 1023. Most importantly, the EZ form reduces the turnaround time of the IRS from 6 months to a few weeks, and since we met all the requirements of the streamlined form, it really was a no-brainer. However, the work we did for Form 1023 was definitely not a wasted effort 2. One requirement was drafting a "Narrative Description of Activities". We wanted to share that here to provide some insight to our work towards our mission of improving access to technology in Old Town Goleta.
- See more at: http://www.journalofaccountancy.com/issues/2016/mar/irs-form-1023-ez.html
- I would be remiss to not mention the HUGE help that was provided by the website 1023.org. If you ever need to fill out the long form, that website will be your MVP. Don't forget to donate to them so they can keep it running!
Equalitech Form 1023 Narrative Description of Activities
EqualiTech was founded with a singular mission: to bridge the growing digital divide in the city of Goleta by expanding free public computer access. Daniel Fitzgibbons, our founder, is a Certificated Tutor at Kellogg Elementary School in Goleta, CA. While teaching Math in the Learning Center, Mr. Fitzgibbons became acutely aware of the gap that begins to grow as early as Kindergarten between students with access to technology in their home and those without. He further realized that many of the students that lacked access to technology in their home, lived in Old Town Goleta. Old Town Goleta is one of the most populous areas of Goleta and home to many low-income and minority families. Despite this, the area has no free public computer access, and the closest library is a 40 minute walk away.
Our primary goal at EqualiTech is to open a state of the art computer center in the heart of Old Town. Use of these computers as well as the center’s WiFi will be free of charge for community members and allow students, parents, and the community at large critical access to technology. We hope to expand our activities in the near future to include technology education and after school programs however we believe the first year will be focused entirely on opening the computer lab and all fundraising activities will be directed towards that goal. The only activity we foresee charging for in the first year is possibly printing.
Our activities up to this point have been primarily focused on networking with other local non-profits working in similar areas as well as securing support from local government officials, the community center, and several local businesses including but not limited to:
- Goleta Valley Community Center: We have secured support from the General Manager who has committed to providing us with space for the Technology Center in kind (no agreements/contracts have been signed yet)
- Cox Communications: Have agreed to provide wired internet access in kind (no agreements/contracts have been signed yet)
- Computers for Families: CFF is a program in partnership with the Santa Barbara County Education Office which provides computers and Internet access to local students lacking these tools at home. In 2015, CFF handed out a survey that we had written to assess the demand for a public computer lab in Old Town Goleta. 92% of their respondents that lived in Old Town Goleta believed they would benefit from such a project.
- Synergy, Inc, Curvature, Inc: We have talked with Scott Phillips, the CEO of Synergy who has offered to connect us with their vendors. Curvature encouraged us to apply for their annual grants offered through their corporate giving program, Curvature Cares.
- Boys and Girls Club of Santa Barbara: The BGCSB is one of the most popular after school programs and they are located directly behind the Community Center in Old Town. They have recently opened up a Computer Lab but it is only for use of members and not parents. We feel our offerings are complementary and have been in touch with the President of their Board who supports the idea.
In addition to the parties mentioned above, we have spoken with the Mayor, several City Council members, and the City Manager all of whom are supportive of our idea.
- Section 1.501(c)(3)-1(d)(2) of the Income Tax Regulations states that the term “charitable” is used in section 501(c)(3) of the Code in its generally accepted legal sense and includes the advancement of education and the promotion of social welfare both of which are primary goals of EqualiTech
- Section 501(c)(3) of the Internal Revenue Code provides tax exemption for organizations organized and operated exclusively for charitable and/or educational purposes.
The sources of the corporation’s income currently derive from personal resources. It is currently an all volunteer organization, having no paid staff. Additional income sources will include public donations, grants, sponsorship and fundraising. The corporation allocates its income through the decisions made by its board of directors or through the decisions of the duly elected treasurer, whose power to pay expenses is set out by the board or the corporation’s bylaws in accordance to the corporation’s purpose. Expenses paid by the corporation include, but are not limited to: equipment purchases and rentals, internet web site fees, advertising, and miscellaneous board expenses.