# Nouns x 501c3 Study

## TLDR

Authorize wylin.eth to explore creating a sister 501c3 non-profit org for Nouns

requesting 1 Noun + 20,000 USDC

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## Context

Nouns is a Wyoming DUNA, a Decentralized Unincorporated Nonprofit. One consideration during the re-formation was the possibility of the DUNA legal entity receiving 501c3 charitable designation, or a fiscal sponsor for the DAO.

Pursuit of both pathways has not proven fruitful.

The topic of Nouns having some sort of 501c3 has been recurring for many months; members have been exploring the topic and [potential structures.](https://berryos.wtf/camp/proposal/918) The DAO recently hosted Jason Schwartz, [the Crypto Tax Guy,](https://www.linkedin.com/in/cryptotaxguy/) on the weekly X space to discuss the topic with members and answer their [questions.](https://forms.gle/uPvL46Fm8dTYsfXs8)

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Jason has made an offer for Nouns to participate at no cost in his firm's 501Foundry program.

501Foundry is a pro bono program that incorporates, advises, and obtains tax-exemption for charitable and other nonprofit organizations. 

Jason is widely considered one of the most esteemed tax lawyers in the digital assets space, and has earned recognition from both Chambers USA and Legal 500 US for his exceptional legal counsel.

Under Jason’s ten-plus years of oversight, 501Foundry has helped hundreds of charitable organizations obtain tax exempt status.

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## The Value

Nouns DAO has a strong precedent for participating in charitable grantmaking:
- [Proposal #1](https://www.nouns.game/proposals/1)
- [Nouns Fund Education: Rebuild a Ugandan village Community School into a Nouns School](https://berryos.wtf/camp/proposal/477)
- [Free Glasses for Kids](https://www.nouns.game/proposals/12)
- [DAO Governance Research at University of Oregon’s Intelligent Futures Lab](https://berryos.wtf/camp/proposal/861)
- [Nouns Shelter](https://berryos.wtf/camp/proposal/462)

Krel & the Camp team's [Nouns Grants](https://www.nouns.camp/topics/launching-nouns-grants-a86882277e69fbf0a51805cdc8b0a3a113079e63) initiative drew dozens of $10k grant candidate submissions that were of a charitable nature. 

A structure that allows Nouns to participate in charitable capital allocation powered by tax-advantaged donations could enable the Nouns governance experiment to continue more sustainably than through auction revenue alone.

One option is to create a separate sister 501c3 organization from the DUNA, with it's own onchain treasury, operations, and an independent board of directors made up of at least 3 people

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## The Problem & Solutions

There is some precedent for this type of setup.

Big Green DAO operates under the Big Green 501c3 as a grants advisory body using similar governance mechanisms as Nouns. 
Their [Light Paper](https://drive.google.com/file/d/139fWDvlKTip8P8q9DPvN1MYoqNeExHUv/view?usp=sharing) explains their legal structure and operarting procedures.

However, operating within a 501c3 as Big Green does is much different from operating seperately alongside another org, as would be the case for Nouns. 

Scoping the structures & agreements needed in place between the DUNA and a new 501c3 to maintain the 501c3 board's ability to meet their fiduciary duties + duties of loyalty & care will be a process requiring a fair amount of research and consideration to fit the opportunites and constraints created by this structure and the DAO's governance activities.

### Solutions

wylin is a member of the DAO, Nouns [570](https://berryos.wtf/probe/570) & [1669](https://berryos.wtf/probe/1669), and the founder of [Wylie Advisory](https://wylieadvisory.com/about).

wylin is a corporate governance and operations partner for nonprofits and private foundations. From formation to board development to ongoing management, I build the infrastructure so organizations can focus on their mission.

As some may know, I participated in the research effort that resulted in Nouns transitioning to a DUNA.

Given I was a champion for the DUNA + 501c3 at the time, I'd like to use the opportunity offered by the Crypto Tax Guy - who is optimistic that it is possible to do - to pursue the idea and see if it passable idea for the DAO.

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Previous work by wylin on Nouns x 501c3 includes:
- 12 months of DUNA x Nouns x 501c3 research,  coordination, and contract negotiation from March 2024 - March 2025
- An [educational presentation on 501c3 & fiscal sponsorship](https://drive.google.com/file/d/1AWXPPB0pYChYvGL3qZ4oFNwsoYIwVRdQ/view?usp=sharing) shared at Nouns Town 2024, on Nouncil calls, & Nouns Amigos calls.
- DUNA formation & 501c3 meetings + presentations with the Nouns Caymans Foundation's former members & advisors, Endaoment, and DAO members with large votes.

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## The Request

This proposal requests:
- 1 Noun + 20,000 USDC as compensation for wylin.eth to lead the engagement with the 501Foundry program on behalf of the DAO + contingency for any non-pro bono work that may need to be carried out by Jason and his colleagues at 501Foundry.

The scope of the engagement is to perform a study that clarifies what a legal and compliant operating structure between Nouns the DUNA & DAO, and Nouns the 501c3 could look like that would allow the DAO to make grant recommendations to the 501c3 for charitable purposes, and create a proposal if it is found to be viable.

## Deliverables

Target 3 months, no more than 6 months, with monthly propdates.

- facilitate an ongoing, onchain discussion throughout the process to provide updates and seek feedback from DAO members

- reach out to Big Green DAO's leadership and members to facilitate a potential Q&A session with Nouns members about operating a DAO in a charitablee context

- facilitate a conversation with [Gladys Santiago,](https://www.linkedin.com/in/santiagogladys/) a Certified Fundraising Executive who has raised over $300 million for more than 30 501c3 organizations, to discuss how the new org could fundraise and be self-sustaining

- coordinate with other DAO members to gauge potential partner interest in supporting the new 501c3

- Alongside 501Foundry, I will scope the 
    - incorporation location & process
    - board governanace framework & policies
    - board requirements and compensation amounts, if any.
    - recommendations for board independence & staffing
    - ongoing costs to operate the 501c3
    - Agreements & operating procedures required for the DUNA to serve as a grant recommendation body to the 501c3.
    - Any potential costs to the DAO for the 501c3 org's creation
    - Any potential direct DAO funding to the 501c3

- a candidate proposal with a 2-4 week onchain discussion period to determine if the structure for creating and operating alongside a new 501c3 is passable by the DAO's current participants.

Unless the candidate conversations indicate the proposal has 0 chance of passing if moved forward, it will be promoted for a DAO vote.

If we are able to create a structure the DAO can agree to and pass a proposal, the DAO will pursue the full opportunity of 501Foundry's pro-bono services to get a sister 501c3 incorporated and operating.

If not, we will end the engagement with 501Foundry.

Outcome: EXECUTED