Thank you. I see where the conflict of interest policy is so valuable. I will probably use the IRS version (which is a bit formal, but acceptable to them) and refer to it (as a separate policy) in the bylaws.
Kayla - I personally am against such sweeping policies as never doing business with members or no independent contractor could be a member. What you need to assure is that the process - and even the perception of the process - is absolutely fair and unbiased.
In my mind, full disclosure and informed decision making is the key - with extra care taken to document any possible situation that could be deemed a conflict of interest or become controversial.
Adopt a good conflict of interest policy, make sure your procedures are fair and objective, and document the situation.
Be very aware of what you are doing and the big picture. There's no problem with paying this stipend (if the process was fair) BUT... what happens if next year you have multiple candidates wanting to do it? What happens if the volunteer for another project dedicating similar hours suddenly wants to be paid? What happens if a parent objects to the idea of paying this teacher and volunteers to run the same program?
Your organization has to decide its practices and policies and be able to answer any questions that arise.
No, the Board of Ed/school/principal will not get involved with the payment (even if we hand them the cash) due to teacher negotiations, contracts etc. for this after school activity (it is not able to be funded by the school budget, which is why we pay for it). This particular teacher has volunteered (and does a great job) to run this activity for a stipend paid by us. We do not actively look for any one other than her to run the program, and no one else has asked to step in to run it.
But back to the basic question of whether the IRS is ok with independent contractors being (voting) members of the group that pays them, does anyone have insight on this? Should there be a restriction in the bylaws concerning this?
You might want to review the conflict-of-interest requirements. Can anyone apply for the job of after-school coordinator? How is the salary determined? Could you instead give the school/principal a grant to pay for the stipend, and have the principal select and pay the coordinator?
We pay a teacher a stipend (she will receive a 1099) to run an after school project for students. The program runs for about 3 months and then ends. This teacher is active in our group meetings but is not an official "member" (no membership form filled out). For the purpose of our Form 1023 filing, is it advisable to state in our bylaws that anyone receiving compensation as an independent contractor cannot be a member? This way we avoid the problem of "direct benefit" issues that parlipartime mentioned? Or, is it ok to have a paid independent contractor as a member? Thanks.
Critter;141174 wrote: I have done the 1023 a couple of times....You are not "disbursing...for the benefit of members" when you reimburse someone.
That makes sense.
PTO Today DOES have a detailed resource for completing the 1023 line by line, question by question, specifically for a PTO. It's in the Start-Up Guide which is included with Plus membership , I think. I think you can also buy it outright. There's loads of useful info in there.
The previous treasurer gave me the PTOplus membership code, but I haven't tried to do anything with it. I did a search on this site for "501" and I didn't see the detailed resource you mention. Maybe I'll look a little harder, starting with "Start-Up Guide".
(Note to site administrators: this resource really should have shown up when I did my search on "501")
