[Clipart] How to deal with donations?

[Jonadab the Unsightly One]

Jon Phillips <jon at rejon.org> writes:

> How shall we deal with donations? I could setup a business account
> on paypal for the project:

Paypal annoys me because of a number of practices and policies they
have that I view as questionably-ethical at best.  In any case, paypal
is still only a method for transferring the funds; it does not deal
with the question of what legal entity receives them, which is the
real issue.

At this time, I don't think we are large enough, or will be dealing
with enough funds, to mess around with a 501(C)3.  It's not like we're
paying anything substantial for our hosting or any other regular
bill.  The largest individual sum is probably for the domain
registration, and it's not really enough that any normal person would
be concerned about whether he could write it off on his taxes.

At this time, I would think that large donations (such as the
tax-writeoff kind, or just general big benevolence), as well as
smaller donations from people who don't know us, should be directed
toward our hosting provider, freedesktop.org.  Smaller donations
intended to be earmarked for things like the domain registration can
probably be handled informally on an interpersonal basis, without
anyone on the list getting worried that you're going to take the money
and run instead of renewing the domain (or whatever).  Frankly, having
the domain itself in an individual person's hands is a larger concern
than the money, and probably the first reason to set up a legal
entity, when we get to the point of being large enough to mess with
that.  

But setting up one of those is sufficiently a pain that many small or
transient groups opt for using an affiliated or parent organization's
501(C)3 umbrella.  The Friends of the Library, a small nonprofit group
benefitting my employer, does not have its own legal entity, but uses
the library as an umbrella organization.  (The Clerk-Treasurer keeps
their money in a separate fund.)  As another example, the CGBCI (a
fellowship of churches, to which mine belongs, and a much larger
organization than the Friends of the Library) does not have its own
legal entity, but funnels funds through individual churches -- e.g.,
any given missionary has a sending church that receives funds on their
behalf; funds related to national conference are handled through the
bank account of whichever church has their pastor serving as the
national moderator that year; and so on.  So what the Gimp people did
is by no means unusual.

However, I'm not sure we even need that at this point.  How much money
are we talking about dealing with?  I don't know about anyone else,
but if it's not more than a couple hundred bucks total in any given
fiscal quarter, I'm comfortable letting an individual person handle
it, rather than go through the hassle of setting up a better system.

-- 
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