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permaculture - Re: [permaculture] Mollisons Trust A & Trust B

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  • From: Sean Maley <semaley@yahoo.com>
  • To: permaculture <permaculture@lists.ibiblio.org>
  • Subject: Re: [permaculture] Mollisons Trust A & Trust B
  • Date: Thu, 20 Dec 2007 09:43:26 -0800 (PST)

This is my understanding of it too, that trust B can be an LLC in most states
of USA, except that an LLC isn't well defined in terms of profit or not.
Hedge funds have made this entity type very expensive to form (I'm $2000 into
it and counting). However, many states do have something often called a
"Worker Owned Cooperative", or "Collective", that is like a non-profit, yet
allows an equity stake, like the LLC and S/C corporations. It looks like the
Design Manual bases some of it's concepts on the Mondragon cooperative, which
is also the template for the "Collective" in USA (50 separate laws for 50
independent states, so check local laws).

http://www.mcc.es/

Nevertheless, this business structure isn't eligible as a "charity" in the
USA (an LLC can be). Even further in the USA is that company ("trust B") B
donating to charity ("trust A") A can't operate as a complete model, since
the 990 tax forms effectively remove the top donors to a charity as a test
for "public support".

If a non-profit can't show that a certain percentage of funding comes from
the "public" then it gets classified as a "private trust", thus losing
"charitable" status (donations no longer tax deductible for the donor, i.e.
trust B pays taxes). Straight non-profits don't allow for an equity stake.

Even further, a "charity" can't compete with any business. The IRS considers
it an unfair advantage for a charitable business to compete with a regular
business (two stores competing, etc).

Without wide support from the local Permaculture community for whomever sets
up the charity for a given region, there is little benefit to setting one up.
Not that this has stopped me. I'm just hopeful that everyone figures out
what I'm up to in the end.

Speaking of which, we should all send a donation to the Permaculture
Institute near us, or whatever is appropriate. There should be no complaints
about lack of service if we aren't sending our money to support them, as
outlined in the Design Manual.

At the same time, the Permaculture Institutes ought to be contacting
Caterpillar and requesting a donation of a good size excavator. Go to Yahoo!
and look for big businesses in your area. Here in NYC, it's often as simple
as bringing a copy of your determination letter and some brochures.

For a list of Permaculture charities near you:
http://www.guidestar.org/

Many of these aren't Permaculture charities, so take care to do your research
before you donate.


-Sean.
oliver smith callis <oliversmithcallis@gmail.com> wrote: I know that Ecotrust
based in Portland is a non profit that has an LLC for-profit component. In
our conversations with them it seems like this might be similar to what Bill
talks about, but I don't have a full grasp of it yet.


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