Best Laid Plans

Thursday, September 28, 2006 at 08:18am by Evan Prieskop in Start-Ups

Our plan was simple: open a school on Roatan Island in Honduras to teach music to children. My partner and I had 40 grand USD and fixed monthly income with which to build the school, support its activities, and live on the island. Out of that simple idea, from which we have never wavered, how could we predict where we are now?

My partner, not the school, wholly and personally owns the school site, providing it, the equipment, and her services to the school as a 1099 contractor. We are incorporated as a US 501(c)3 corporation in the state of Nevada (a state which neither of us has more than briefly visited). I am whole owner of the company (though I have invested not a penny into its formation) but that means little because the company has no assets. Every donation to the corporation goes into paying its monthly expenses, a variable amount always exactly equal to its income.

Does any of this sound strange to you? Does any of this sound convoluted, irrational, or contrived? Well, it is. Yet nothing here is illegal. Nothing here is shady, underhanded, or even unusual.

Everything above is a fiction, legal in nature and going to the purpose of preserving and maximized the company’s effectiveness. We have been forced to create these fictions due to many strange conflicts and convolutions that are created by the tri-fold interaction between international business law, non-profit activity rules, and practical reality. In truth, the business works exactly as you think it should. We work hard, we get a few donations, raise a little money with gigs, and then we cover the rest of the costs out of pocket. We teach children, march in parades, and play music.

It works. It is weird and counter-intuitive, but it is what we had to do to follow all the rules and keep everyone happy. Keep all this in mind when you are setting up your business. What is real and what is on paper do not always match up.

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