Does anyone on here have lawyer contacts with experience in setting up non profits to run non commercial stations?
Thanks!
Jacob
Thanks!
Jacob
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Forming a 501c3
- Thread starter Radiomogul79
- Start date
You do not need a 501(c) for a noncommercial station. You only need at the minimum, state incorporation status. You don't need an attorney in most cases. There are many online services that can provide these filings, you can also use something like LegalZoom or you can contact the Secretary of State for your state for details. It might be easier than you think.
501(c) is helpful in addition so that way you can allow donors to deduct from their taxes, but it is not required for FCC licensing (where state corporation status is).
You can do it yourself, just pay the state fees. However it's important that a couple clauses that the IRS will require should you decide to apply for 501(c)3 status in the future be in your corporate documents. If they are not there you will have the expense of filing an admendment, so put them in, it's no big deal. Google is your friend. Also, in most cases, you have 27 months to file with the IRS for 501(c)3 status. 501 is an IRS tax regulation, non-profit corporations are State entities.
If your thoughts are about applying for an LPFM during the next window; something else to consider is the FCC requirements of being an educational institution, whether you're teaching radio to students, or an educational organization that would be teaching via radio. Trying to game the system by filing what amounts to a fraudulent, or strawman application so you can play all your favorite music via your own radio station, will get caught eventually.
The Educational Statement is more of the FCC's interpretation of Section 397(6) of the Communications Act for the definition of noncommercial educational broadcasters. Starting in the 1940s, Educational Broadcasting (on reserved spectrum) was originally for school systems only in order to deliver academic programs to remote campuses in a school system (early distance learning) and not necessarily for public listening. Educational institutions qualify based on their accreditation (47 C.F.R. §73.503(a)). Back in the early days, Moody Bible Institute challenged that. The FCC would expand the scope to include educational organizations. The educational statement is a formality to get an applicant in the door. The FCC cannot regulate a station's choice of entertainment format (see WDCU(FM), 12 FCC Rcd. 15242, 15244 (1997) cit. WNCN Listeners Guild v. FCC, 610 F. 2d 838 (D.C. Cir. 1979), rev'd. 450 U.S. 582 (1981)). The educational statement is a formality to get an applicant in the door. With the exception of specific things, including some that went through the courts, the FCC cannot regulate the program content. This is also on constitutional grounds. This is further solidified in 47 C.F.R. §73.503(b), where it states that stations may transmit programming directed to specific schools in a system (the original intention of educational broadcasting from the 1940s) and may transmit educational, cultural and entertainment programs to the public.
As much as I would rather see LPFM stations follow the community radio model and include some educational programming in their lineup, a station's right to choose their entertainment format is protected free speech.
As much as I would rather see LPFM stations follow the community radio model and include some educational programming in their lineup, a station's right to choose their entertainment format is protected free speech.
Well this is not the 1940's and community radio goes back more than 50 years. Community radio boards are made up of local citizens who want to bring an alternative to commercial radio.
I don't see the ANTI-LPFM POSTER objecting to the right wing AM translators that far outnumber LPFM's in this country. I think the real hatred for community radio is by right wingers in disguise.
Anyway, the FM dial is clogged in most of the country. The frequencies that are left are crappy.
I don't see the ANTI-LPFM POSTER objecting to the right wing AM translators that far outnumber LPFM's in this country. I think the real hatred for community radio is by right wingers in disguise.
Anyway, the FM dial is clogged in most of the country. The frequencies that are left are crappy.
Well speaking as an "anti-LPFM-poster" allow me to clarify: In a time when competition from streaming and loss of sponsorship support puts a strain on radio as a whole; the last thing we need is poorly run, shoestring operations occupying space in the same neighborhood where legitimate broadcasters who spend lots of money annually on lawyers, and who need to maintain many more requirements as a licensee, are trying to keep their heads above water. That, and uneducated but well meaning people are blowing their life savings on something that they have no idea how to run, let alone have much of a chance of success. It's sad to see the clueless ruin themselves financially on some pipe dream.
In my case at least, none of my opinion has to do with supporting "right-wing AM stations" or their translators. I've gone on the record as opposing issuing FM translator assignments to AM broadcasters. The translators represent handing a set of Walmart water wings to someone floating in the middle of the Pacific Ocean. It helps for a while, but we all know it will likely end badly. AM broadcasters have seen the end approaching and those who continue, do so at their own peril. As it is with LPFM; clogging up the FM band further does nobody any good.
There is no minimum requirement, other than to be a recognized incorporated nonprofit organization in any state as evidenced by articles of incorporation filed with a state's Secretary of State (or equivalent) office. There is a process for unincorporated associations, such as Catholic churches that is much more complex and requires attorney intervention.
Organizations that meet the requirements of being recognized by the FCC as noncommercial educational eligible with established local presence for at least two years prior to the opening date of the filing window can claim a point for established local presence which would give them priority in the selection process in the event of mutually exclusive applications.
To be considered for established local presence, the recognized nonprofit must either:
- Have a headquarters (or in the case of a school, a campus) within 20 miles of the transmitting antenna (10 miles in counties/areas considered as Top 50 urban markets); OR
- Have at least 75% of their board members that permanently reside within 20 miles of the transmitting antenna (10 miles in counties/areas considered as Top 50 urban markets).
- Applicant must provide documentation to support their claim.
Established Community Presence - For a period of at least two years prior to the filing window, organizations that have at least 75% of it's board members living within 10 miles of the proposed transmitting antenna.
Local Program Origination - Applicant pledges to originate at least 8 hours a day of local programming. Local programming is considered produced within 10 miles of the transmitting antenna. The FCC considers "local programming" as:
- Licensee produced call-in shows,
- Music slected and played by a DJ present on site,
- Broadcasts of events at local schools,
- Broadcasts of musical performances at a local studio or festival, whether recorded or live.
Main Studio - Applicant pledges to maintain a publicaly available main studio with local program origination capability. The studio must be reachable by telephone and is staffed at least 20 hours per week between 7AM and 10PM. Studio must be located within 10 miles of the transmitting antenna in the top 50 urban markets and within 20 miles elsewhere.
Local Programming and Main Studio bonus point - Applicants who can pledge local programming and main studio can claim an extra point for a total of three points.
Diversity of Ownership - Applicat does not hold any attributable interest in any other broadcast station (for example, a translator owner obtaining an LPFM facility or a student operated station operated by an institution with other broadcast holdings).
Tribal Applicant - Organization must be at least 51% tribal-owned and operated and the transmitter site must be on tribal land.
Local programming and main studio pledges are only enforceable if the point system is used by the FCC to dismiss one or more applicants in the MX group because of insufficient points or as part of a tie breaker (more than 3 lead equally qualified applicants where no resolution or time share agreements were made). REC lists LPFM stations from the 2013 window subject to the pledges at LPFM stations subject to pledges and limitations on assignments | REC Networks.
If the LPFM application is singleton at the close of the window or is able to amend their application to break out of an MX group to become singleton, the pledges do not apply.
Since 2013, there has been no record of the FCC enforcing the pledges. Unlike full-service NCE, the provisions of the pledges do not appear as permit or license conditions on the grants made from the 2013 LPFM window. We don't know whether the FCC will put them on this go-around. The only known publicly accessible information about stations subject to the pledges is maintained at REC.
While you are correct, the chance of getting "caught eventually" is pretty much zero. There are hundreds of LPFMs that are off air or don't even exist, yet they still have licenses. If there isn't enough manpower to police that, there is little chance that there will be much scrutiny of educational pledges. You can pledge to be live 8 hours a day to gain a point, but who is going to police it? Listen to what Michi says - you won't go wrong.
The FCC drives a lot of this based on complaints. Successful complaints include recordings of the station's air, references to time and date when the violations took place and for non-English language stations, original text and a translation that includes a statement from the translator that includes a statement certifying their qualifications as a translator working in the language translation industry (and not just a staff member who happens to be bilingual).
Statistically, a majority of the complaints happen because:
When LPFM was created in 2000, the vision at the time was that stations would be operated by well-established and well-funded local community organizations, such as community service organizations and ethnic advocacy organizations, local churches and ministries, as well as local chapters of national organizations (think NAACP, La Raza, etc.) that wanted to use radio as a new extension of their organization's existing educational and human services programs. Many of the organizations that filed in the first generation window series fit this mold. It was not until the second generation (2013) and the excitement around the Local Community Radio Act that we saw a huge influx of both organizations that were formed for the sole purpose of operating the LPFM station and those who had bad intentions from the get go, thinking that they could operate a station for the purpose of turning a profit. I feel that many of these LPFM stations that are "riding dirty" are doing so for mere survival as they do not have the financial backing of a larger well-funded organization, which the LPFM service was originally envisioned by the FCC.
In 2000, LPFM had an ownership cap of 10 stations (with no two commonly owned stations within 7 miles of each other), but restricted the first window series to one applicant by local organizations. Because of various circumstances, including the Great Translator Invasion of 2003, the ownership cap was kept at one station (at the time, LPFM licenses could not be assigned to other organizations, so it was not possible for first generation LPFM licensees to gain additional stations before the national 1-cap was put into place.)
In many cases, we find that the failed LPFM stations (and those that only exist on paper) are those who:
Statistically, a majority of the complaints happen because:
- The LPFM station is located in a smaller market with fewer stations thus giving the LPFM a potential for a higher market share.
- The complaining station is a local or smaller owner. (iHeart, Audacy, etc. just simply do not have the local personnel to deal with issues like this).
- The LPFM station is running a format that would be more competitive to commercial radio, as opposed to operating the public radio, community radio or speech-based Christian radio models.
- The LPFM station is actively soliciting revenues through proactive fundraising, "media kits" that include rate cards, etc.
- The LPFM station is actively promoting itself in the community to the level of a commercial station. (One complaint took issue to an LPFM station's wrapped vehicle.)
When LPFM was created in 2000, the vision at the time was that stations would be operated by well-established and well-funded local community organizations, such as community service organizations and ethnic advocacy organizations, local churches and ministries, as well as local chapters of national organizations (think NAACP, La Raza, etc.) that wanted to use radio as a new extension of their organization's existing educational and human services programs. Many of the organizations that filed in the first generation window series fit this mold. It was not until the second generation (2013) and the excitement around the Local Community Radio Act that we saw a huge influx of both organizations that were formed for the sole purpose of operating the LPFM station and those who had bad intentions from the get go, thinking that they could operate a station for the purpose of turning a profit. I feel that many of these LPFM stations that are "riding dirty" are doing so for mere survival as they do not have the financial backing of a larger well-funded organization, which the LPFM service was originally envisioned by the FCC.
In 2000, LPFM had an ownership cap of 10 stations (with no two commonly owned stations within 7 miles of each other), but restricted the first window series to one applicant by local organizations. Because of various circumstances, including the Great Translator Invasion of 2003, the ownership cap was kept at one station (at the time, LPFM licenses could not be assigned to other organizations, so it was not possible for first generation LPFM licensees to gain additional stations before the national 1-cap was put into place.)
In many cases, we find that the failed LPFM stations (and those that only exist on paper) are those who:
- Were sold on the service by a highly enthusiastic consultant with promises of "your own radio station!".
- Was sold a "turnkey solution" to bring satellite delivered Christian radio to their area and was sold everything based on an application filed, without the church's knowledge by a speculator (such as the first generation Lyle Evans applications targeting Catholic churches).
- Wanted a station so they could "play radio", got bored of it and shut it off.
- Realized the "sticker shock" and realities of operating a licensed radio broadcast station.
- Used "host organizations" in order to get the radio station (to get the coveted "fifth point") and the board members of the host changed and the new board had no interest in maintaining the liability of being a licensed broadcaster.
- Had power struggles and other internal politics within an organization.
- Filed for on behalf of a well-established organization, but the person(s) involved in the LPFM application process were never authorized by the organization's board to engage in the application process.
- Never reached out to any of the well-known resources for information and community support (REC, Prometheus, Common Frequency, NFCB, social media groups, etc.) and therefore had no knowledge of the rules or even any first hand knowledge of operating a station.
- Never attended a Grassroots Radio Conference (a great educational resource for all things community radio - the next one is coming this October in West Virginia).
I turned my little radio enterprise into a California nonprofit. It was a simple matter of going to the SoS website and filling out an online application. Cost me $35.00 which included a pdf of a certificate from the state. Took about a week.
Something else I've done is fill out a Form 3500 which is a state tax exemption application. My thinking here is that even though I'm not a 501c(3), those who donate to Zebra Radio can claim a deduction on their state income tax, if not the IRS. Have not heard back from the state yet on Form 3500. But I'm sure all states have a similar provision for being nonprofit and tax exempt.
Something else I've done is fill out a Form 3500 which is a state tax exemption application. My thinking here is that even though I'm not a 501c(3), those who donate to Zebra Radio can claim a deduction on their state income tax, if not the IRS. Have not heard back from the state yet on Form 3500. But I'm sure all states have a similar provision for being nonprofit and tax exempt.
The main benefit to donors of giving to a 501(c)(3) was the tax deduction. For most people, the standard deduction makes more sense, but if you, elect to take the standard deduction, you cannot claim a deduction for your charitable contributions.
It's a lot of work that may have no measurable benefit to a small nonprofit.
I agree. But some people like the idea of their donation being deductible. It's a selling point or an inducement to donate. But, yes, the standard deduction is high enough to where a donation to a radio station isn't going to matter.
On second thought, it might be wiser to apply for 501(c)(3) status. It's not so much that donations are tax deductible under a 501(c)(3) but that you can use the IRS 990N postcard for tax reporting (provided that your station takes in less than 50K annually). As a state-only nonprofit, the IRS requires that you file Form 1120, a nasty, lengthy, convoluted tax form that only the IRS can dream up. You'll need an accountant to file it for you. The 990N, which is online only, is very simple and takes only few minutes to fill out. Also, the 501(c)(3) has a special code for radio so it seems that this is what the IRS expects noncom stations, such as LPFM, to declare themselves. I notice that the vast majority of LPFM stations have 501(c)(3) status. It costs 275.00 to apply to become a 501(c)(3), but it might be worth it.
The main thing I get from the know it all's in this fascinating thread:
"Both you and I know... that anyone can build and operate a radio station"
"Both you and I know... that anyone can build and operate a radio station"
In California, when you incorporate as a nonprofit, you are not considered tax exempt. To file for tax exemption, you need to fill out and send Form 3500 along with your articles of incorporation and bylaws. The filing is free but takes about 6 months to get a determination letter. Without tax exempt status, you would be required to send the FTB a minimum of 800.00 a year or more depending on what your organization took in. I'm sure other states have similar regulations.
I bit the bullet and filed for 501(c)3 status. It took an evening to fill out the online form and a 270.00 fee. It was fairly easy to apply for and took about six weeks to get the approval. So now my organization is a 501(c)3. The worst was actually getting state tax exemption. The FTB (California tax board) insisted I re-write my articles of incorporation three times. They were very specific as to what language to include and exclude. But they coached me through it. Don't use the stock articles of incorporation that are found online. Those were rejected immediately by the CA tax people. Let them tell you what language they want to see (much of it is actually on their website). They also wanted a full description of my LPFM station and how it would obtain funding. It was about a 4 month process. I think getting the IRS status will pay off. Some donation sites won't work with you unless you are 501c3 nor will many non-profit organizations or organizations that offer grants. Yes, you don't need it. But to me, it was an extra step worth doing.
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