Occupy Boston (OB) Financial Accountability Working Group (FAWG) Financial Stability Proposal

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Occupy Boston (OB) Financial Accountability Working Group (FAWG) Financial Stability Proposal
Steve

FAWG recommends that OB approve that United for a Fair Economy (UFE) become our fiscal sponsor, using the comprehensive model of fiscal sponsorship (which is option #1, below).

The following are options FAWG considered, after consultation with staff of United for a Fair Economy and 2 organizations which provide different models of fiscal sponsorship.

1. Fiscal Agent Comprehensive Model

UFE would administer OB's money, including all aspects of bookkeeping. OB would approve proposals under whatever system we adopt; now it is GA that makes these decisions. OB GA would appoint 2 or 3 specific people to act as liaisons with UFE, who would communicate the approved proposals and direct UFE to write and sign checks to the named payees. All money held and administered by UFE would become subject to the IRS restrictions on UFE because of its 501(c)(3) tax-exempt designation. These limitations, in FAWG's opinion, would probably not inhibit OB's actions: prohibitions include no lobbying for specific candidates and a monetary limit on it's advocacy for legislation that is a proportion of UFE's annual income, a number much higher than is within our foreseeable reach. This option provides maximum protection for OB community members from the possibility of being sued and the most rigorous financial oversight, in terms of division of functions making sure all the functions are covered (checks and balances). We specifically discussed implications of OB's probable on-going activity in areas that are or may be outside the law and UFE was comfortable with that reality. Donors would get a tax deduction for donating to OB. One organization charges 9% per year of the money held for these services.

2. Fiscal Agent Re- Granting Model

UFE would receive our money and then return it to OB for administration. OB would be responsible for all the subsequent bookkeeping and oversight of the bookkeeping, cutting checks etc. OB's money would be characterized as subject to UFE's 501(c)(3) restrictions as above and donors would could take a tax deduction for donations to OB. No OB individuals would have the risk of having OB money attributed to them for Federal Income Tax (FIT) purposes. But the OB members doing and overseeing the bookkeeping and distributing the money would have potential liability and OB would have the costs of those tasks. OB would also have to devise a way to hold the money which would put us in the same position we're in now. So this option provides less protection than the one above and does not address the on-going problem of having enough people to separate (and do!) the bookkeeping and money-handling tasks for best integrity. One organization who provides this kind of fiscal sponsorship (to OWS among others) charges 7% of the amount of money held annually for this service.

3. Making No Change

This exposes the current signatories to the credit union accounts to significant legal risk of having OB money attributed to them for FIT purposes, and of being sued for malfeasance, as well as allows risks of actual malfeasance, by intention or neglect, by OB members who designated to handle the accounts and the cash, because of inadequate "checks and balances". The 3 current signatories have volunteered to continue only temporarily with the status quo. Therefore unless new signatories are found the money will be withdrawn from the credit union and held somewhere.

4. Get 501(c)(3) Status

If OB, or part of OB, becomes a tax-exempt organization under the US Tax Code, we would have to go through the lengthy & expensive process of incorporation and then still have to manage our money by hiring or appointing a bookkeeper, overseer(s) of the bookkeeper and other people to do the money-handling (donations and disbursements). As noted previously, we haven't been able to get enough people to divide these functions up, which is necessary to create the protection of "checks and balances". Consistent, wide-spread opposition to any form of OB's incorporation makes this option unlikely.

5. Hire An Accountant

Would leave us with perhaps less work than now, but also with an on-going expense and all the risks we currently have without any protection. Even if the bookkeeper is bonded or insured, if that person is not supervised properly, OB and the community members involved continue to be at risk.

6. Give All the Money Away

As long as OB continues to function, money will come in, albeit perhaps in small amounts, so this is not a solution in itself. However, GA could decide that as soon as any money comes in, it is immediately donated to another group or organization.

Questions? Come to the GA on 11/4 at 4 pm at the Community Church of Boston, 565 Boylston St, Boston.

Fawg options
Joe

Thanks a lot for this very clear and complete summary of the fiscal type options for OB.  All the info anyone would need to make a decision is here; and , if it seems as though the "Comprehensive Fiscal Sponsorship" model looks miles beyond any others--- that is because it is. FAWG's recomendation is well considered and totally justified.
The only options that have real viabiltiy are the "comprehensive sponsor" and re-grantor options.  The costs of these two are likely to be similar, but look at how much more we'd get for the OB buck with the Comprehensive model. We would be free from any repsonsibiilty for bookkeeping, keeping accounts. The functions of holding money and keeping accounts would be kept separate, as they ought to be . 
Neither of these 2 options would put any real limit on our organizing and acting.  Both would probably lead to more donations  to OB.  Both are  very small steps OB could make toward being--- just a bit organized, and OB folks will not notice any difference, except  money issues will come up a lot less.   A small, incidental advantage is that we could get free rooms for meetings at the BPL!
I hate the expression "this is a no-brainer" --- but this is a no-brainer.  Thanks  to FAWG for their work and for sticking this process out to the end.  Maybe we are almost done with it---- hope so.
PASS THIS SUCKER!
Joe C

OB Chooses Fiscal Agent Comprehensive Model
Steve

On Nov 4th OB decided to adopt the Fiscal Agent Comprehensive model.
http://www.occupyboston.org/2012/11/05/ga-proposals-4-nov-2012