Questions about starting a not-for-profit knitting pattern business

Posted by deleted 8 months, 3 weeks ago to Business
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I would appreciate some business advice.
I’ve designed a knitting pattern. It’s quite unique, and I know lots of fellow knitters who would like to knit it.

But here’s the thing. Being an Objectivist, I have no intention of subjecting myself to illegal government rules and regulations.

Yes, it’s just a knitting pattern, but if I sold enough of them, I’d have to pay taxes on my profits, and goodness knows what else the government would require of me.

I want no part of that.

But I do want to get the pattern out there. You see, there’s a yarn dyer who was viciously attacked last year by the cancel cultists, and they nearly destroyed her. Designers no longer wish to work with her.

I designed my pattern with her yarn. I have lots of other original ideas, and think we’d make a good team.

My husband made the brilliant suggestion that I could ask people to donate to a charity of my choice instead of sending me money.

It’s a genius idea, but I have questions.

1. I’ve chosen a name for my “design house”, and will put the name and logo on the lower corner of every page, and a watermark over every picture. (I can’t tell you how many designers I know that have been ripped off). Do I have to file for a trademark, copywrite or something on my house name?

2. Once I’ve chosen a charity, how do I get the money to them without having to answer to the government? If 100% of my profits go to charity, will I have to prove it to the taxman?
Or, if I somehow bypass payment directly to me, and have buyers make the donations directly, how do I ensure payment has been made to that charity before I send them the pattern?
Because I’ll be darned if I want money going to someplace evil, like Antifa, BLM, the Democrats or Planned Parenthood.

Any help would be greatly appreciated.

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  • Posted by $ Dreamer 8 months, 2 weeks ago
    My guess would be that you would need to set up a non-profit organization, like a 501(c)(3) for charitable or educational purposes - but I would wait until next year, because I have a feeling that the irs will be gone. The world is about to make a U turn, we just have to be patient for a little while longer...shrug. In the meantime, I wouldn't put your patterns online right now no matter how many watermarks you put on them -- speaking as a techie, there isn't anything that can't be removed.
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    • Posted by $ gharkness 8 months, 2 weeks ago
      I agree with you on the watermarks. They are trivial to get rid of. Not so sure about the IRS. I don't think it's going anywhere. It's the source of all government income - well, taxpayers are the source, but guess where they send it....and that's simply not stopping. I could see that they might be somewhat hampered, and they are already working with ancient computing resources. Still, I think they will be there for a long, long time.

      Then again, I could be wrong!
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  • Posted by $ Commander 8 months, 3 weeks ago
    During a startup your profits will be rolled back into the business. The constraints of Not for profit are arduous filings that are not necessary.
    Near the end of a fiscal year, if you deem profits applicable to charity, donate them. Get an accountant to advise on charitable donations prior to your business start. You will have 4 partners in your business. A lawyer, a banker, an accountant...and your hostile partner...The Gov
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    • Posted by $ gharkness 8 months, 2 weeks ago
      A "tax return" for a nonprofit grossing less than $50k is an online procedure taking less than 30 seconds, and you do not have to specify where the money came from or where it went, but getting there is a little harder. In order to file the 990-N you must have applied for and received 501(c)(3) designation. THAT is the hard part. THIS is the first place where you need professional help - filling out the application properly. Practical hint: Never give them the opportunity to say NO. They make sure you have every "i" dotted and every "t" crossed, even though I know you don't want to.

      It's much easier to get it right the first time, than it is to convince the IRS you need to be re-considered. It will be harder the second/third time, trust me.

      Also, the IRS considers that since you aren't paying taxes, you can be a WHOLE lot more prompt with filing on time. Therefore, penalties and eventual banishment from nonprofit status will follow if you don't do it right. If you lose your charitable status, you will be paying direct income tax on all the income going forward as a sole proprietor unless you choose to form a (editing for clarity) for-profit corporation. Also, while you CAN take an income from the charitable organization for the purpose of managing this business, you will then have to pay income tax personally on the money you receive in salary, plus SS and Medicare, etc.

      As you can see, the deeper you go, the more involved it gets. My advice: Keep it VERY, VERY simple. And get a CPA.

      Here is some practical advice surrounding Charitable organizations (if it doesn't link properly, copy/paste):

      Now, I get what you mean about not wanting to deal with all this, but you ignore taxes at your peril. Just saying. Get yourself a CPA. No legit CPA will suggest you not file/pay taxes, whether you want to or not. But they can make it easier for you to get it right.
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  • Posted by 25n56il4 8 months, 3 weeks ago
    First of what state will you be registering your nonprofit (501(c3)? Are you going to be donating to individuals? A 501(c)3 has to be very careful. Mine only donates to other 501(c)(3) entities or to things like Little League, volunteer EMS and volunteer Fire Dept and the Food Bank. School things like when they raise money for cancer (contests between the schools in our District). You don't give 100% to charity (you do have administrative expenditures don't you)? Make sure you have a good accountant (CPA) who knows about nonprofits. You file an IRS form for nonprofits and there is a page for your donations and a formula to follow. You can file on a fiscal year basis usually. Mine ends in August. N
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  • Posted by greybear22 8 months, 3 weeks ago
    I'm not in the US, so I can't say anything about the regulations there. In Denmark, I would do the following (hopefully the US regulation has some overlapping points at least, so that you can use a few of these ideas).

    1. There is a minimum amount of income. Until you reach that, the government is considering the income to be like selling your sofa to your friend, not an economical activity. In Denmark it's 50k dkk (roughly 7k usd).

    2. Once you reach this income level, the tax is paid based on profit, not income. So spending the income on marketing causes (aka having your logo at the charity org you choose) can potentially decrease your tax to 0.

    3. If you have a certain income, you can also decrease the profit (taxable income) by spending on advisory, to lawyers, auditors, accountants, etc., who can explain easily, how to support developing countries, who in exchange can provide you with very advantageus tax schemes in their country (off-shore). Please note - today it's considered to be highly unethical. Illegal... for that you need to mess it up a lot according to my understanding.


    4. How much do you rely on social media for your business? If not much, you can just leave it. Once you are offline, the 21st century internet warriors can't really effect you. They are only heros from behind their keyboards (look, what I'm doing just right now - typing my message ;-) ).

    5. Be faster. Before they can ruin your reputation, go ahead and do a campaign to retain your existing customers. Let them know about your position, so that when they hear the news, they already know the background story. Once the news are out, you can gather new customers too, from people seeing your side and sympathizing with your ideas. This way you can turn a disadvantage to an advantage.

    6. Hire a PR expert for the time being and consult on managing the cause. They are experts and can surely help more than anybody based on a short post.

    I hope you can use at least some of it. Good luck with your business.
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    • Posted by SilentScream 8 months, 3 weeks ago
      Good points (I especially like #4). One thing I've noticed as I've been thinking through some of these things myself (and my brother too) is that one sign that we might be getting closer to the heart of these various matters is the realization of this "eye in the sky" and the inherant risks that (especially in 2020) come with allowing anything to get big enough to get popular attention followed by appropriation (with built-in DRM to keep all the games rigged). I've seen it time and time again: Once anything becomes too big, popular and starts moving further from home, it starts becoming owned, corrupted, and then grows in the other direction (a downward spiral of less & less value given for your time/efforts).

      What we need is a place to come together and exchange what words and what good we can sustainably "bring to the table". I'm speaking in general but also specifically to this skill set and circle of folks who share it (my brother has recently picked up knitting, even though it's un-popular - therefore frowned upon - as a hobby for a guy) and I too am looking to find a better way. Here's what I've got so far, in case you can find a way to use it for yourself:

      If you can find a place to come together with others like you locally and each lay out what skills/materials you've found or developed and can easily/sustainably share/spare, you all will be better off. If you can find a place in this world wide web where your cooperative symbiotic group can come together with other like-minded friend groups of hobbyists/creators in other regions, & exchange cooperative symbiotic words and good actual things, then more power to you (both figuratively & literally).

      When you're a piece of good healthy fruit dangling from the very tip of a branch of a much larger tree with a perspective that can see bad fruit dangling from an adjacent branch (that is only sapping away the life of the tree while giving only more of it's disease in exchange), the fact that it's not in your power directly to cut off the dead fruit could be enough to drive you crazy & distract you from the source (if you let it). Kudos to you for being a do-er & looking for real workable solutions! Your friendly sharing between others in your hobby or branch could very well decrease your cost of materials to make nicer things out of, and then finding ways to share your best with other branches of this tree is tapping into communion at the tree trunk and root levels (which actually do have the power to cut off the circulation to the bad branches/fruit). It has to be as pure and as fair to all who are aware, involved, committed, and assessing with you in it, but I am convinced that better friends and more symbiotic value can be found through freely exchanging with others who actually make & do things in the real world. I'm a flint-knapper, and just through the online flint-knapping groups as well as local I've met who want to learn, I've found some good sustainable exchanges with some (and some regrettable with others who I took a chance on), but it's been more from random chance. Finding/making an organized place to share what we each can sustainable spare could certainly find much better "good trades" (of ideas, information and actual things) in the real world. P1 may want what P2 has to spare while P2 wants what P3 has to spare, but with a free intuitively organized framework to come together on, larger circles can be drawn. P3 might find that P1 has something s/he needs, allowing 1 to get from 2, 2 to get from 3, and 3 to get from 1 (a win-win-win situation).

      "Where?" is the question. I think we may have to start working from home figuring out for ourselves how to build more real person 2 person interactions again (pulling out the hooks of increasingly more connection in exchange for increasingly less actual value gained), and keep that local group space of people who are actually involved in your life & well-being as sacred and separate as we can manage from the more broad, less local altar-net exchanges. Just my thoughts. I wish I had a better outline for a workable solution.
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  • Posted by $ 8 months, 3 weeks ago
    In the aftermath, up to today, existing pattern designers and yarn dyers are being ruthlessly vetted. If you don’t check all the right boxes and kowtow to the groupthink, your business is attacked and they try to destroy it utterly.

    One person, the Sockmatician, had a nervous breakdown.

    The yarn dyer whose yarn I’m working with committed the crime of defending another yarn dyer who was under attack. For that, she herself came under attack, and it was vicious. Knitting shows she was supposed to sell at canceled her vendor’s booth. Her social media was under attack. Everything was done to try to destroy her business. I’ll include links to her blog posts.
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    • Posted by $ Commander 8 months, 3 weeks ago
      This is a prosecutable case of Libel, Defamation of Character, and Bullying. Incomes and business viablilty and profitability have been compromised. Advise everyone affected to seek legal counsel. There are direct and indirect (punative) damages to be sought. Apply the pressure of Law.
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  • Posted by $ 8 months, 3 weeks ago
    If any of you are wondering about the treatment of the yarn dyer, do I have a tale to tell.
    The knitting community went through a major upheaval in 2019. It was a tsunami.
    Basically, the world’s biggest knitting social media site went full-on lefty fascist, and began a censorship campaign. I’ll include a link that explains things more fully.
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  • Posted by fivedollargold 8 months, 2 weeks ago
    Fivedollargold thinks you should start a simple S corporation and keep the profit as a producer. However, if you must, donate the profit and write it off against your corporate income. You will need to register your company name with your Secretary of State office and pay an application fee. In $5Au's state, the fee is $100.
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