Functioning as a non-charitable trust allows us to move money to our grantees with more flexibility, whether a group has non-profit status, a fiscal sponsor, or neither. It remains our priority to resource the movement of grassroots trans-led organizers and activists in whatever ways work for hem, no matter what structure of organizing our grantees choose. We especially want to ensure that groups that are doing the most radical organizing work, outside of the nonprofit structure, have money to real their visions and create pathways towards a more just and liberated future.
And in 2013 our first year of making grants, TJFP operated similarly to a non-profit. As exciting as it was, we found that it was incredibly difficult to move money to the most grassroots of groups, those without nonprofit status. And because funding grassroots groups is one of TJFP’s main priorities, we quickly realized that we needed to go back to the drawing board and figure out a new way to move money!
After lots of questions, conversations, research, and consultations with lawyers and accountants, we decided to try venturing outside of the non-profit world altogether and incorporate as a small business—a limited liability company (LLC), one of the simpler forms a business can take.
At first, we were feeling pretty happy with our LLC. Funding groups without non-profit status was simple: they became our consultants in the business of trans justice! And our tax burden stayed low. Then in the summer of 2014 we learned that if co-founder Karen Pittelman kept making donations to the LLC, it might be a red flag for the IRS. Turns out the IRS gets worried when someone keeps putting money into a business and never gets any of it back.
The good news was that Karen had unexpectedly inherited more money and could keep covering TJFP’s operating expenses. The bad news was that this meant we had to revisit the question of our structure and after talking to more lawyers, accountants, and a tax law specialist, we finally found a solution: a non-charitable trust.
One of TJFP’s core values is to keep things as simple as possible for our applicants and grantees. Our application is short and we don’t require any reports. A non-charitable trust still allows us the freedom to give money to groups without forcing them to get a fiscal sponsor or have non-profit status, especially since both will require all kinds of paperwork and reporting.
People can donate to TJFP in two ways: directly to TJFP’s non-charitable trust which is not tax deductible, or to TJFP’s Collective Action Fund at the Tides Foundation, which is tax-deductible. TJFP makes grants annually from the non-charitable trust and TJFP’s Collective Action Fund at the Tides Foundation.
Each year TJFP’s annual grantmaking fellows recommend the groups they think the Collective Action Fund should give grants to. The groups that are recommended to TJFP’s Collective Action Fund to award grants to are only the groups with nonprofit status, a 501c3 or a fiscal sponsor.
But Tides Foundation maintains variance power over the money in the Collective Action Fund, which means that Tides has the final say over whether those groups receive their grants. This is because in order for your donation to be tax deductible, Tides Foundation is responsible for ensuring that charitable funds are used responsibly.
We work together with our grantees to make sure Tides has all the information they need to do this. For groups with more complicated structures or who do not have non-profit status, luckily we have our non-charitable trust where we have more flexibility and the final say! Our hope is to make things easy for all our grantees, whether they are funded by our non-charitable trust or by the TJFP Collective Action Fund at Tides.
I believe that part of transferring money and power is getting it done and then getting out of the way.
So much more is possible when we collectively pool our love and resources together to show up for our communities who fight on behalf of all of us. Whether it's one dollar or a million, every dollar counts! We invite you to join us in supporting the community-led solutions we wish to see, today and into the future.