A Board of Directors is a requirement for a 501(c)(3); moreover, 501(c)(3) refers to a section of the Internal Revenue Code that grants tax-exempt status to nonprofit organizations serving religious, charitable, scientific, literary, or educational purposes.
HSe4Metrics' 501(c)(3) tax status during the limited fundraising campaign for the public
Board of Directors Governance:
- Minimum number of board members: Most states require at least three board members, though some may require five. The IRS generally expects a minimum of three voting members. HSe4Metrics will have three, including the president.
- Board composition: The IRS requires that at least 51% of voting board members be unrelated. This ensures independence by preventing a majority of board members from having close personal or business relationships.
- Fiduciary responsibility: Board members must uphold duties of care, loyalty, and obedience to the organization. They are responsible for acting in the organization’s best interests, managing its financial assets wisely, and ensuring that funds are used for tax-exempt purposes.
- Governance and compliance: The board must ensure the organization adheres to all relevant laws, regulations, and ethical standards. This includes filing required documents, such as Form 990, with the IRS.
- Mission oversight: Board members must ensure the organization remains aligned with its stated mission and tax-exempt purposes.
- Transparency and accountability: The board should promote openness in financial reporting and program outcomes.
- Conflict of interest management: Board members must disclose and appropriately manage potential conflicts of interest.
- Legal and ethical oversight: The board is responsible for ensuring the organization operates in compliance with legal and ethical standards.
Question: Once a major corporation or other entity becomes the HSe4Metrics sponsor, providing all funding for HSe4Metrics operations, will HSe4Metrics maintain its 501(c)(3) tax status?
A top-ranking, publicly traded corporation contemplating tens of millions of dollars to fund the operations of HSe4Metrics first and foremost has a fiduciary obligation to its shareholders.
Therefore, in providing funding for the operation of the HSe4Metrics social media app, the sponsor may require direct oversight of the funding it provides, rather than relinquishing oversight to third-party 501(c)(3) directors.
In that case, HSe4Metrics would either decline the opportunity for that entity to serve as its sponsor or would accept that condition and apply to the relevant governmental authorities to dissolve its 501(c)(3) status, thereby ending the sponsor’s tax benefits.
Free access, regardless of tax status
Whether or not HSe4Metrics retains its 501(c)(3) tax status once a sponsor is installed, the HSe4Metrics social media app MUST remain free access.
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Directors
Vernon Baker
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Advisors
