Accounting for the Resistance and Budgeting for Resilience

Starting a radical project in a stodgy world

This post is about what it’s like to try to have a radical project – a beautiful project grounded in justice and equity – only to come up against the constructed realities of our current world.

It’s also a miniguide on what to do when your project needs to face the realities of dealing with money – though, as with everything you read on this blog or that comes out of my mouth, it’s not Tax Advice, for which you need to talk to someone who does taxes. Ok? Onwards!

I’m writing it because: 

  1. So many of you are starting up mutual aid and grassroots projects right now,
  2. I too have started up grassroots projects, and
  3. I got another one of the notes, which I get versions of regularly. 

This one reads:

“I’m a member of a collective called {fill in a collective name here}. We provide mutual aid to {a specific group}. We are about a year old now and have been wrestling for about 6 months with how to set up the necessary banking we need, but stay true to radical values that are against the typical non-profit models. 

Here is a brief overview of the issues we are trying to resolve: 

We need a bank account so that we aren’t using personal venmo/paypal anymore. This will make donations easier to accept and money easier to track. We really don’t want to have to become a 501c3 or get a Fiscal Sponsor. Becoming an LLC seems too expensive and like the taxes and tax filings are a nightmare. We would be okay with becoming a 501c4. What are the liability ramifications of a person getting an EIN and getting a bank account and routing donations through that? We basically need some legal and tax advice around alternative non-profit structures. 

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Firstly – if this is you, it sounds to me like this group needs some tax advising, which I don’t do, though I never fault anyone for lumping all money stuff together if you don’t know the intricacies. 

I like to point folks to ABC or Open Bookkeeping or Treehouse Taxes or Assets to the Resistance or ask about tax preparer in your community — but I suggest you get tax advice from people who do taxes, and pay for it.

The irony is not lost on me that, in order to try to make no money / give money away / resist the exchange-value based confines of late stage capitalism, they will need to find money to talk to a professional. 

Ultimately, the point of paying someone to help you figure out something that you don’t yet understand, is to SAVE you money, time, hassle, stress, missed opportunity or paperwork filing deadlines, and so on. It’s a stitch in time to save nine, as the old saying goes.

Now – there are some free services out there, but most of them are run by:

  1. the SBA which is beyond overwhelmed right now
  2. City-based nonprofits which are closed and/or also overwhelmed right now
  3. Organizations that focus on making money more traditionally, who will not really understand what this group is trying to do.

So, this is not tax advice — but here’s my take:

If you’re actively trying to get money – for any purpose – think of that as a business because that’s how the tax people see it, and you’re playing partially in their world once dollars are flowing into accounts.

The tax stuff doesn’t get less complicated if you try to avoid being a business or legal entity — the impact and complexity just fall harder on one individual who, via EIN or SSN, has the money go through their name. It ends up being way burdensome to that one person imho. So, if you went that route you’d want to pick that very intentionally, knowing that person will have extra work and possibly taxes to pay if everyone hasn’t done their part with the paperwork [or even if they have].

An LLC is not a nightmare any more than any business [a business being an entity that is trying to make money, for whatever purpose]. Any entity – an individual with an EIN sole project, a 501c3, an LLC, a Corp… all have to keep track of money in and expenses to tally it up end of year to offset income with legitimized expenses. That can be kind of hellish, but if yall keep good financial hygiene practices [receipts, using only one account, staying on top of paperwork] it does not have to be.

Ultimately how you all will set it up depends on which kinds of paperwork and tax stuff you want to do. Lately I’ve seen mutual aid groups trying to circumvent the whole thing by facilitating P2P donations directly rather than centralizing funds, and that is an interesting model.

Finally — if this is you, good luck! the world needs more radical projects like yours <3

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