If you’ve been a SQL Saturday organizer for a few years, you might remember that prior to March of 2014, PASS handled much of the finances. All money collected from sponsors and meal fees went into a trust account managed by PASS which was earmarked for that specific event. Organizers then requested their funds from PASS.

I completely understand why PASS would want to get out of doing this. PASS handles a lot of things, and to be honest, playing the role of banker for events organized and managed by volunteers doesn’t need to be a part of that.

While I believe this was the right thing to do, it did create some additional headaches for organizers, particularly in terms of taxes depending on local laws. PASS is a not-for-profit organization and could collect this money without any tax liability. With PASS removed from the equation, event organizers now had to establish a PayPal account in their own name to collect funds for SQL Saturday, and they were also personally liable for any taxes on it.

The user group leadership in Chicago didn’t really like that idea, so we decided to incorporate as a not-for-profit ourselves, creating the Chicago SQL Association. Over the years, I’ve been contacted by several other user groups asking how we did this. I’m happy to help, and thought I would share here as well.

Choose A Mission and Scope

Any good project needs a mission and a scope, and the same goes for an organization. We decided our scope would be to support SQL Saturday Chicago, as well as the Chicago SQL Server User Group and the Chicago Suburban SQL Server User Group. Our mission, simply put, is education. We offer free knowledge about the Microsoft data platform to the public through user group meetings and our SQL Saturday event.

Seek Professional Assistance

Creating a corporation isn’t all that difficult. I have no doubt that we could have fumbled our way through it and ended up with a not-for-profit corporation on our own. What I was not so sure of was our ability to get this right the first time without making mistakes that might penalize us in the future. We looked into hiring an attorney to help us navigate this process, but it was going to end up costing thousands of dollars that the organization didn’t have.

One day it dawned on me to look into legal clinics at local law schools. These clinics, often free or available at little cost, offer law students the ability to gain practical experience while helping those who otherwise could not afford legal services. I reached out to the Bluhm Legal Clinic at Northwestern University Pritzker School of Law, and they got back to me very quickly. We were assigned three law students and a professor (also a lawyer) who helped us through the process from beginning to end.

After meeting with our legal team and discussing our goals, mission, and scope, they came to the conclusion that we should seek 501(c)(3) not-for-profit status. They drew up all the paperwork, and all we had to do was sign on the dotted lines and pay the required government filing fees. Within a matter of weeks we had a legitimate not-for-profit corporation, with zero sleep lost worrying that we made any mistakes.

After Incorporation

Now for the real work. As I said, creating a corporation is pretty easy. Maintaining it and keeping things legal is another matter entirely. It goes without saying, but, depending on your locale, you’ll probably have multiple required filings to keep your not-for-profit in compliance. Speaking for ourselves, each year we must file simplified taxes with the US Internal Revenue Service, register with the Illinois Secretary of State, and report our finances to the Illinois Attorney General.

We had done a pretty good job of bookkeeping before we incorporated, but now that we were official, it was required by law. We originally kept track of all our finances via shared spreadsheets. This worked decently well and cost us nothing, but come tax time reporting was a nightmare. Of course, there was plenty of commercial software out there for managing business finances, but none of it was cheap. This is where finding organizations that help not-for-profits is invaluable.

I highly recommend applying to TechSoup. TechSoup offers a variety of discounted (and free) technology products to not-for-profits. One of the many things they offer is a significant discount on QuickBooks small business accounting software. It makes the financial part of running a business incredibly simple, and it honestly saved us about 20 hours of work when it came time to do taxes and financial reporting this year.

You’ll also want to register with PayPal as a not-for-profit to get a discounted rate. This means that more of the money collected from sponsorships and meal fees will go into your bank account. Every little bit helps!

A Web Presence

You may want to look into setting up a domain, website, and/or email for your organization. For us, this was probably the most difficult part of the process. I was unable to find any way of obtaining a discounted or free web domain, but that wasn’t a huge problem as domains are rather inexpensive. Hosting a website and email, however, is another story.

We applied to Microsoft’s nonprofit program with the thought that we would meet their criteria in that we are offering free educational opportunities to the public, and furthermore, those opportunities center around Microsoft products. Sounds like a shoo-in, right? Yeah, not so much. Microsoft did not agree and hence we were rejected.

We then tried Google’s nonprofit program, which accepted us. We’re grateful they did, as we can now host association-related email at our own domain, and are working on a website. The irony is not lost on me that Google is helping us educate people about the Microsoft data platform while Microsoft had no interest in doing so.

Other Tips

Your organization will need some sort of bank account. Be sure to shop around at multiple banks to see what they offer not-for-profits, and what their fees are. If you have a local credit union, don’t forget to check them out as well. We ended up going with a credit union and pay no fees at all for our banking.

Get liability insurance. If your organization is running a SQL Saturday, chances are your venue may already require insurance, but even if they don’t, a policy is never a bad idea to have. We found a company that specializes in insuring activities like user groups, and it costs much less than we thought it would.

Looking Back

I’m very grateful we were able to incorporate the Chicago SQL Association as a not-for-profit. Not only have we seen financial benefits, but we have also become more organized as a result of having a corporation to maintain. PASS no longer handling the financial end of SQL Saturday events may have been a short-term annoyance, but it was just the push we needed to get this ball rolling and I’m very glad we did!