As we learned through the Panama Papers, establishing a corporation is not difficult. Especially, when you have occasion to dodge your tax obligation or launder illegal profits. In contrast, when you want to raise money for community development incorporating draws more scrutiny, at least in the U.S.
The U.S. government allows tax deductible donations to socially beneficial organizations incorporated as non-profits. However, the Internal Revenue Service needs proof that the non-profit corporation is actually operating to benefit society. (Apparently, no such scrutiny is applied to anonymous, for-profit corporations operating in known tax havens).
As a result, a small group of people intending to develop a blighted neighborhood, or provide job training to unemployed adults faces a huge obstacle. They cannot attract tax deductible donations without incorporating and filing voluminous tax documentation annually.
Ioby (In Our Back Yard) provides non-profit, incorporated status to ordinary people who want to do good. It enables accountantless and lawyerless groups to conduct crowdsourcing that is tax deductible for donors.
Ioby is, well, your very own shell corporation.
Extracted from https://www.ioby.org/about
What we do
ioby helps neighbors grow and implement great ideas one block at a time. Our crowd-resourcing platform connects leaders with funding and support to make our neighborhoods safer, greener, more livable and more fun.
ioby believes that it should be easy to make meaningful change “in our backyards” – the positive opposite of NIMBY.
How we do it
ioby uses the concept of crowd-resourcing (a term we coined) to drive projects to success:
crowdfunding + resource organizing = crowd-resourcing
Crowdfunding is the pooling of small online donations for a cause or project.
Resource organizing is a core tenet of community organizing that considers activists and advocates the best supporters to ensure the success and long-term stewardship of a cause or project.
As a combination of these two, ioby’s platform gives everyone the ability to organize all kinds of capital—cash, social networks, in-kind donations, volunteer time, advocacy—from within the neighborhood to make the neighborhood a better place to live.
Extracted from http://www.shareable.net/blog/iobys-erin-barnes-on-the-nonprofit-advantage-in-civic-crowdfunding
This was really part of our founding initiative. The US Forest Service had done all this research in 2007 on the grassroots groups that stewarded open green space in New York City. They inventoried these groups, and they found that about seventy percent of them are volunteer-run and more than half had annual budgets of less than a thousand dollars.
Our interest was in supporting this civic vanguard in this grassroots, mobilized network of people who just were responding to the urge to protect and care for open spaces and public spaces in cities. By being able to extend our 501(c)3 status through fiscal sponsorship, we’re allowing those groups a couple different things.
One is their donors can write off their donations to those projects. The other is the groups don’t have to feel forced to incorporate because they can use ioby as a fiscal sponsor up to a certain point so they don’t have to have that urge to incorporate. They can stay unincorporated for longer periods of time or possibly even consider incorporating in a different way.
Then I guess the third part is, and I think that this varies depending on groups, so I would say some groups have said that being able to operate under ioby’s fiscal umbrella has, in some ways, legitimized their work in the eye’s of some of their potential donors or supporters. It’s about people’s perceptions of where they’re putting their funding or who they’re throwing their weight behind.