The laws of running a non-profit anime convention.

This is Ryan Kopf, the president of and your local nerd and anime fan.

Anime Minneapolis is coming up this weekend and we’re all hands on deck with the convention, shaping up to be a great time and I look forward to seeing some awesome people here!

While preparing for Anime Minneapolis, I’ve also noticed discussions on social media about the voting process for another convention organization in Minneapolis. This other convention is organized as a nonprofit corporation. Currently, about 1/4th of the conventions in the Midwest operate as nonprofit organizations, while the other 3/4th are for-profit entities and businesses.

It seems like people are concerned about the voting process in this other organization – according to these social media posts, new candidates have been added past election deadlines, candidate bios have been updated past deadlines, and comments have been deleted from online discussions. These people seem worried that the process won’t be fair and transparent.

In seeing these discussions, I noticed a lot of drama. This drama is not too unusual in the anime community since many convention organizers are passionate fans rather than professionals. We are all often just very excited fans in the end.

But I have degrees in business, management, and engineering, I’ve taken law classes and been on the board of many nonprofits. 

I wanted to take a moment to help people understand some of the rules and requirements of being a nonprofit, because I keep seeing so many inaccurate pieces of information floating online.

Can people get paid by a nonprofit?

Yes! Often nonprofit corporations will have a paid staff, these are usually the top level executive staff. It is perfectly legal for a nonprofit corporation to pay an hourly or monthly wage to a person if that wage is reflective of market wages. For example, the largest anime convention in California is run by a 501 non-profit corporation but their executive director is paid a salary of over $100,000 a year, according to a recent filing. The rule is that nonprofits can pay people for “the work the person does”, but the person can not be distributed a percent of profits.

This isn’t necessarily a bad thing. Having a paid, professional acting staff can mean that the organization can build long term relationships with vendors, artists, anime companies, voice actors, and others within the anime industry. But if executive staff are paid, especially if they are paid well, they should be held to a high standard of transparency and accountability.

Are nonprofits required to make all their information public?

No! This is a surprising fact about non-profits. Only certain pieces of information are required to be public. Also, these pieces of information don’t need to be continuously updated on demand to members of the public – nor even to customers, patrons, and members of the nonprofit. Generally nonprofits have to file one annual form that contains the name & address of its board of directors is. And then the non-profit has to file an annual 990 tax form.

But often these tax forms are very underwhelming. A very large nonprofit anime convention – one with 30,000 people attending – put on their tax form that they spent $2 million dollars on “convention expenses”. They didn’t put how much went towards paying staff, hotel rooms, venue costs, etc.

Should you trust a non-profit?

Many nonprofit corporations do amazing work. Many are run entirely by volunteers and strive to be as open and transparent as possible. But a nonprofit organization can just as easily be completely opaque and keep the money for its own uses. One list of terrible nonprofits reported on several nonprofits that kept 95% of income for executive salaries and fundraising. For example, the “Kids Wish Network” (which is NOT the same as the Make a Wish Foundation), paid it’s founder $5 MILLION in consulting fees.

There was a nonprofit convention, in a state bordering Iowa, that I was told paid it’s board of directors $10,000 per month, each, and this is why the event shutdown after COVID, because they kept paying these salaries even while there was no convention.

So just because something claims to be a nonprofit, does not mean that nobody is making a profit. Other organizations purport to spend all their money on their members, but executives are given lofty perks and benefits – from free travel to private clubhoues access – instead of cash payments.

The most important thing to look for in any anime convention is more than is it “nonprofit” (which is meaningless), or “for-profit” (which often means ‘small business’) – but instead look at the quality of the event. Does it seem like the organization puts most of its money towards entertainment? Is there a fantastic main stage filled with events? Are there good guests? Are ticket prices cheap or expensive? Are things getting better every year? Do they provide free snacks and nourishment to the attendees who can’t afford high hotel food prices, or are they gouging attendees on every little thing possible? Do the staff seem to genuinely care about the attendees? These are the things that matter most.

I look forward to seeing you all at Anime Minneapolis! Let’s make this an unforgettable experience filled with amazing guests, events, and community spirit.

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