Creating a 501c3 & Equivalents


  • Be able to apply for gov’t grants

  • Be able to take tax exempt donations

  • This would be for bigger donations, most people offer donations that are much smaller, and those people often don't write up those donations - and if that's how things are working, it may not be worth opening a 501c3 until much larger donors come and then the capacity of the organization can expand

  • Could be valuable to remain autonomous for as long as possible and be funded by the community if thats work

  • Its recommended if you want to start a 501c3 to do it with 2 or 3 people who already have experience creating a 501c3

  • Main benefit is ability to take large donations and offer the tax deduction

  • There are many different tax designations: you can also become a membership organization and that is a separate tax designation, if you want to be doing policy work there's another.

    • 501c4 is a political organization

    • 501c6 is membership organization

      • Members get an opportunity to vote on decisions

  • 501c3 is the most labor intensive and expensive

  • A 501c3 cannot use more than 20% of its funds (includes time of paid workers) to any policy work.

  • Funds need to go to charitable causes

General Steps:

  • Find a group of people who are willing to do this on a volunteer level

    • You’ll really want to vet these people, make sure you align with vision and mission and what you want to contribute to within the movement.

    • President, Secretary, Treasurer are the required positions. ED can be a hired position or be the president.

    • Having a hired ED is valuable so that they have the bandwidth to organize the org.

  • Having a really clear mission statement and clear goals and values that your organization is committed to

  • LegalZoom is a helpful service to take care of everything for you ~$1400 to have paperwork submitted for you. There are cheaper options where you would have to submit your own forms. This way you don’t have to pay for a lawyer.

    • They send you annual reminders to keep your paperwork up to date

  • Once you’ve submitted your paperwork, you dont have to wait for approval before receiving donations.

  • Make sure youre staying up to date or it can cost a lot

  • Create a set of bylaws & articles of incorporation - this is your guiding document

    • you have an annual reporting requirement, you need a way to handle voting and get things done in a formal fashion. Bylaws help the organization long term should someone that is in charge step away. So that the original founding people all agreed on that this is the way things will go.

    • Template linked here

    • Those documents can also be edited by a majority of the board

    • Voting procedure

    • Size and capacity

    • Fiscal year

    • Frequency at which you meet (quarterly, bi-monthly)

  • You may also want to just start with a fiscal sponsor - another non-for profit that gathers tax exempt donations for you and they take a percentage of whatever you raise, they help you with guidance, legal and financial oversight and steer you in the direction of your own status.

DIY Style:

  • Some orgs don't have enough resources to get the 501c3 status - here is a way to do it for cheaper - could be $7/800

  • Was helpful that some of the board members already had experience in this

    • They had an accountant (CPA) volunteer to help us present a budget

  • There is usually a guide for every state to start a nonprofit

Recommendations of Board Governance

  • How do you have the needs of all board members met, how are decisions being made, how are people held accountable to decisions

  • Documenting things like this and voting processes from the get-go is valuable so that agreements are made and are clear

  • Making sure that people are coming to meetings and meeting requirements

  • Agreement to accomplish the missions and vision

  • Are you actions, and ways you're iterating in alliance with the mission and vision that has been set from the beginning - this is why having signed documents is actually very helpful.

  • Can also only have a consensus model; unanimous voting - nothing happens until common ground is found

  • Can have all board meetings open to the public

  • Other archetypal roles: Reformer, builder, healer, resistor

Can Also Start a Church

  • Many folks dont enjoy working for non-profits for all of these reasons and churches can be an alternative.

  • 508c1a - very different process, depends on how you want to organize your organization


  • Allows you to take money for events and protect people legally

  • Turns the organization into an individual

  • You can get fiscal sponsorship this way

  • Different states charge different amounts for LLC costs

  • $50 in Colorado, $800 in California

  • Has to be connected to the individuals

  • Benefit:

    • If your org is getting some income that you have to pay taxes this makes it easier to do that - unless you want to do a nonprofit

    • Reporting requirements are very low

    • You can start as an LLC and then eventually transfer it to a non-for-profit when you're ready


Transformation Shared

What’s a Co-Op?

  • Organizations that are owned and or governed by their workers or community members, or a combination of both. They are not governed or owned by people who are investing in the, philanthropically.

  • Equity means ownership, co-ops put community first

  • The board is democratically elected by community members

Why Would a Psychedelic Society Want to be a Co-Op?

  • Psychedelic societies are formed by the community

  • They have different stages of evolution - may not be the first thing to do

  • May want to incorporate as a 501c3 first and then bring in a co-op board

  • You need to have a well functioning community and board before turning into a co-op

    • People who want to talk about psychedelics and meet

    • Want to actually have a society with a name

    • Now we want to incorporate and open a 501c3 and incorporate bylaws

    • And then can become a co-op

  • But without a strong culture, it could take a lot of bandwidth

  • Having a co-op in a decriminalized state is valuable for sharing medicines, and an alternative to commercial and legal shops.

  • Aldo great for protecting facilitators

  • In a co-op there is some thing that is being traded between people, would be valuable if facilitating or medicine sharing a goal of a particular organization

    • Ie spore trading

  • Could integrate service centers into psychedelic societies

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