If you’re running a regular event or meetup group that charges for events or sells sponsorships, you’re going to need a plan for what to do with the money.
In the beginning, it won’t be much and you can keep it in your personal bank account (or in a lockbox under your bed…). But after a little while, you’re going to get uncomfortable with mixing personal and meetup finances. Many people start exploring starting a legal entity of some sort.
A friend of mine is in this position now with one of his meetups. He emailed me for advice, and I thought I would post my response for the benefit of others.
Yourself: This is what I did for a while when things were smaller and I didn’t have much carry over from month to month. Once I started booking multi-month sponsorships and some larger deals though, I got nervous about having it so tied in with my personal finances. It got to the point where it became simpler to keep it separated. If you don’t have much left over, or this doesn’t happen super often, you can probably get away with this. If you’re thinking about it though, maybe you’re past that point.LLC: This is what I’ve done with my meetups (I actually just set up one LLC and ran multiple through that). It was pretty fast and easy to set up a sole proprietorship LLC. If you have more than one person who manages the meetup group, you could also set up a joint partnership LLC… but it might be worth it to just make someone “the money person” and have them set up the sole proprietorship LLC. Usually your state’s website will have a walkthrough or a guide for all the paperwork you need to fill out. This will also let you get a business bank account, so you can keep the money physically separated. You can also get a separate debit card/checkbook just for that account, etc.501(c)3: Having been a part of several non-profits… this is way more work than it’s worth. Don’t bother. You get a few tax benefits, but in exchange for a huge amount of oversight and reporting you’ll have to do to maintain that status. Just pay the taxes and get on with what you actually want to do.
A fourth option is to find another organization, partner with them and treat them like an umbrella. Use their infrastructure to manage the money for you. I’m part of a few organizations that do this. Access to money can be a bit slower, but you don’t have to deal with any of the business/tax side of things. It’s important here that you find the right organization to do this – you have to trust them a lot if you’re giving them all your money.
Setting up a simple LLC is probably your best bet. It lets you open a business banking account and get the money out of your personal account.