Charging for events

How much can you charge for an event hosted at i3detroit? Is anyone allowed to make a profit on a class or event? Here's some thoughts about i3's mission to help steer you in the right direction.

Non-profit status

i3Detroit is a 501c3 organization, which means that it is a non-profit. In general, this means that while we can turn a profit on anything we do - events, dues, donations, etc, we can't give these profits to any shareholders etc. All our profits get incorporated back into our operating budget. This is how we've accrued a healthy emergency fund in the bank! So there is no reason that an event we host can't turn a profit based on our non-profit status alone.

However, there is some language in our specific mission statement in our 501c3 application letter that should also be considered. Our application letter can be found here: File:I3 Detroit Form 1023 Attachment.pdf, and all the application materials are here: Organization_Structure#Form_1023_.28501c3_Application.29

Relevant sentences in the 501c3 letter

• In "Historical Background"
  • "(i3) is dependent on its members and the general public for funding, through fundraising efforts and nominal fees for goods & services provided, & membership fees. "
  • This implies that we are allowed to charge fees above material costs, but "nominal" implies that the fees shouldn't be very high.
• "Present Activities - Workshops"
  • "Materials fees may be charged to cover costs but otherwise workshop attendance is free."
  • This line is pretty clear that we shouldn't charge fees at all.
• In "Present Activities - Funding/Fundraising"
  • "i3 also offers workshops (...) with corresponding admission fees charged per participant"
  • Admission fees for workshops are listed as a method of fundraising here.

Interpretation of the 501c3 letter

As interpreted by the President in July 2022

• The application letter describes the current activities at that time but doesn't necessarily hold us exactly to those activities forever. Some examples of classes were attached but obviously we don't have to host those exact classes. The tiered dues system was referenced but we've changed since then. Etc. However, we should be careful that when changing minor things about what we do and how we serve the community, that we don't end up deviating from the spirit of our original mission.

• Spirit of our mission: We actively encourage access to our facility & our events/classes to people of all income levels, as much as possible. The first thing we should be thinking of when putting up an event in general is how to share knowledge, not how to turn a profit. However that doesn't mean that 100% of classes must be free above the cost of materials. We are free to use some events/classes as fundraising, either by allowing an optional donation or through a flat admission fee. Fundraising efforts through events or other means allow us to continue fulfilling our mission by offering our space & tools to the general public. We are also free to pay an instructor for their time.

Practical Examples

• Hosting a class with a skilled instructor with an hourly rate
  • The class could have multiple tiers of tickets, where some tickets just cover the cost of materials, and others include extra to cover the cost of the instructor and/or use of i3's facilities. This allows for more access to the class across income levels, but puts either i3 or the instructor at risk of losing money.
  • Tickets could all include the cost of materials plus the instructor/use of the facilities. This is OK as it falls under the "nominal fees" referenced in our 501c3 application, and it's more straightforward to execute, but it should be limited when possible.
  • i3 could volunteer to pay the instructors rate and take the risk on the class not selling well, or the risk could be passed to the instructor. Classes can be listed with a mandatory minimum to run to minimize this risk, but there is also instructional value in small classes.
• Having an outside organization host a class at i3
  • We don't need to be as concerned about how other groups charge admission, at least not in terms of our 501c3 status.
  • We can accept optional donations from outside groups if they choose to donate, without putting any other stipulations on the organization's use of the space. This works well to allow partnerships with other organizations with similar missions as ours to grow the community as a whole.
  • We can also offer other organizations a flat facility usage rate to generate revenue. This is straightforward and can be useful to generate revenue in cases where the organization isn't necessarily aligned with our mission.