hacdc-wiki/Old Pages/Old Wiki/Form_1023_Draft.md

Below is the proposed draft of the HacDC IRS [Form
1023](http://ftp.irs.gov/charities/article/0,,id=130101,00.html). This
is the form we need to fill out to become a 501(c)(3) status.

This wiki article will document proposed answers to the form, following
on a Part and Line Item basis. You can follow along using [the complete
1023 form](http://www.irs.gov/pub/irs-pdf/f1023.pdf), or check out the
[1023 form instructions](http://www.irs.gov/pub/irs-pdf/i1023.pdf).

## Issues of note

- We should complete our Bylaws amendments before submitting this
  application. (See Part II, Line 5)
- We should make sure all our DC filings are complete and correct (i.e.
  registered agent, registered office) before submitting.
- We should prepare an Annual Report, as per our bylaws, describing the
  activities of HacDC and giving our financial picture from our Tax Year
  ended December 31, 2008. (See [Part
  IV](Form_1023_Draft#Part_IV:_Narrative_Description_of_Your_Activities "wikilink"))
- Even though we have no paid staff or contractors, it may be a good
  idea to adopt compensation policies as described (See [Part
  V](Form_1023_Draft#Part_V_:_Compensation_and_Other_Financial_Arrangements_With_Your_Officers.2C_Directors.2C_Trustees.2C_Employees.2C_and_Independent_Contractors "wikilink"))
- We should determine whether or not we will retain rights to
  intellectual property or other discoveries. (See Part VIII, Question
  10)
- We should determine whether or not HacDC will make grants or
  distributions. (See Part VIII, Question 13)

## Sections to note

The "difficult" sections will be noted here. These are the ones that
require real thought as opposed to simple plugging away of information

- [Part
  IV](Form_1023_Draft#Part_IV:_Narrative_Description_of_Your_Activities "wikilink")

## Part I : Identification of Applicant

1.  Full name of organization (exactly as it appears in your organizing
    document): **HacDC**
2.  c/o Name (if applicable): (Not Applicable)
3.  Mailing address: **1525 Newton St NW, Washington DC 20010** *Note,
    there is no room or suite for HacDC*
4.  Employer Identification Number (EIN): **(tc should have this
    number)**
5.  Month the annual accounting period ends: **12** *We follow a
    calendar accounting year*
6.  Primary contact: *Contact information for Elliot or Tim, whoever
    wants to be the primary.*
7.  Are you represented...: **No** *This line is if attorneys or CPAs
    are filling the application and we want the IRS to communicate with
    them directly.*
8.  Was a person who is not one of your officers...: **No** *Presumably,
    nobody is getting paid to help us fill out this application*
9.  Organization???s website, e-mail: **<http://hacdc.org>
    info@hacdc.org**
10. Certain organizations are not required to file: **No** *We will be
    required to fill out an 990*
11. Date incorporated if a corporation...: **03/25/08** *Wow, we missed
    our anniversary party. This was the date we were officially
    incorporated in the District of Columbia. You can see our
    registration information
    [here](http://mblr.dc.gov/corp/lookup/status.asp?id=53073)*
12. Were you formed under the laws of a foreign country?: **No**

## Part II : Organizational Structure

We are a Not for Profit corporation organized in the District of
Columbia, organized specifically to become a 501(c)(3).

1.  Are you a corporation?: **Yes** *Tim should have our original
    articles of incorporation*
2.  Are you a limited liability company: **No**
3.  Are you an unincorporated association?: **No**
4.  Are you a trust?: **No**
5.  Have you adopted bylaws?: **Yes** *Note: We should complete all
    proposed bylaws amendments before submitting this application.*

## Part III : Required Provisions in Your Organizing Document

We have all the required language in our [Articles of
Incorporation](Articles_of_Incorporation "wikilink")

1.  Section 501(c)(3) requires that your organizing document state your
    exempt purpose(s)...: **Yes [Third
    Article](Articles_of_Incorporation#4Third_Article "wikilink")**
2.  Section 501(c)(3) requires that upon dissolution of your
    organization, your remaining assets...: **Yes [Sixth
    Article](Articles_of_Incorporation##Sixth_Article_:_Management.2C_Affairs_and_Activities_and_Provision_for_Dissolution "wikilink")**

## Part IV: Narrative Description of Your Activities

This is the part of the application that will require the most
discussion among our members. We may choose to attach our Annual Report,
which we should prepare before submitting the application. In addition
to a narrative of projects we're working on and the general nature of
the space, what we're doing and what we plan to do, the Annual Report
should be professional looking and serve as an attractive promotional
device for HacDC. [Here's a good
example](http://www.carnegie.org/pdf/CCNY-AR08-18.pdf) of an Annual
Report from the Carnegie Foundation

### Instructions from the application

Using an attachment, describe your **past, present, and planned
activities in a narrative**. If you believe that you have already
provided some of this information in response to other parts of this
application, you may summarize that information here and refer to the
specific parts of the application for supporting details. You may also
attach representative copies of newsletters, brochures, or similar
documents for supporting details to this narrative. **Remember that if
this application is approved, it will be open for public inspection.**
Therefore, your narrative description of activities should be thorough
and accurate. Refer to the instructions for information that must be
included in your description.

### Instructions from the form instructions

For each past, present, or planned activity, include information that
answers the following questions:

- What is the activity?
- Who conducts the activity?
- When is the activity conducted?
- Where is the activity conducted?
- How does the activity further your exempt purposes?
- What percentage of your total time is dedicated to the activity?
- How is the activity funded?
- List any alternate names under which you operate

If you have a website, you may attach a paper copy of to support your
narrative description of activities

### Sample Activity: Microcontroller Mondays

Note: This is by no means complete, this is just to give an example of a
good description of the activity. The same information may be presented
in a less structured/more narrative form, as long as the questions are
answered.

- Microcontroller Mondays is a weekly gathering of those interested in
  the pursuit of microcontroller-driven devices, their designa nd
  theory. The event is open to the public, designed for all skill levels
  and serves as one of the organization's primary "entry points" for
  involvement.
- The activity is conducted by volunteer members of HacDC
- The activity is conducted most Monday nights
- The activity is conducted at HacDC's laboratory space
- The activity furthers the following exempt purposes
  - Charitable: The activity is free and open to the public. HacDC's
    equipment, meeting space and some consumables are made available to
    all participants. Other non-profit organizations and those pursuing
    charitable activities use the weekly meetup to learn more about
    microcontrollers and other electronic technology as well as network
    with those who have expertise and are willing to apply that
    expertise to relevant charitable work.
  - Educational: The activity's primary aim is information exchange and
    mentorship on the science of microcontroller design and theory.
    Experts and those well-versed in the technology share information
    with each other and mentor those with little to no experience with
    the technology. Often, a potential hobbyist will bring a project
    they cannot complete to the event to seek advice and mentorship in
    completing the project and learning techniques and theory to
    complete more advanced projects or design new ones.
  - Scientific: The activity's secondary aim is to engage with
    microcontroller and related technology, discover new applications of
    the technology and test the limits and potentials of existing
    technology and theory in the field.
- Approximately 15% of our total volunteer and member hours are
  dedicated to this activity
- The meeting space and utilities for the space are funded by members,
  the equipment is primarily donated or paid through membership dues and
  donations. Those participating in mentorship and research activities
  do so as volunteers.

## Part V : Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees, and Independent Contractors

HacDC has no paid staff, officers, volunteers, etc. As such, this clause
should present no issue to us, though we may want to adopt policies
stating under what circumstances someone would be compensated (i.e. a
teacher of a class, speaker, etc.)

This clause was expanded in the most recent revision of the application
to ferret out organizations formed primarily for the enrichment of the
participants. It's common for hobbyists in the field to form their own
non-profit to fund their presumably exempt activities as a primary
career.

**However, the officers will have to attach a list "showing their name,
qualifications, average hours worked, and duties."**

Note: The officer titles are most likely going to change pending a
Bylaws revision.


1a.

Elliot Williams / Coordinator in Chief / 1525 Newton St NW, Washington
DC, 20010 / -\$0-

(Other officers, etc.)

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1b. **None**

1c. **None**

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2a. Are any of your officers, directors, or trustees related to each
other through family or business relationships? If ???Yes,??? identify
the individuals and explain the relationship. **No**

2b. Do you have a business relationship with any of your officers,
directors, or trustees other than through their position as an officer,
director, or trustee? If ???Yes,??? identify the individuals and
describe the business relationship with each of your officers,
directors, or trustees. **No**

2c. Are any of your officers, directors, or trustees related to your
highest compensated employees or highest compensated independent
contractors listed on lines 1b or 1c through family or business
relationships? If ???Yes,??? identify the individuals and explain the
relationship. **No**

3a. For each of your officers, directors, trustees, highest compensated
employees, and highest compensated independent contractors listed on
lines 1a, 1b, or 1c, attach a list showing their name, qualifications,
average hours worked, and duties. **Attached list of qualifications,
etc.** *This is where the officers will have to list their duties,
qualifications, etc.*

3b. Do any of your officers, directors, trustees, highest compensated
employees, and highest compensated independent contractors listed on
lines 1a, 1b, or 1c receive compensation from any other organizations,
whether tax exempt or taxable, that are related to you through common
control? **No** *This assumes that none of the officers work or have
business or other outside interests with the same entities.*

4\. In establishing the compensation for your officers, directors,
trustees, highest compensated employees, and highest compensated
independent contractors listed on lines 1a, 1b, and 1c, the following
practices are recommended, although they are not required to obtain
exemption. Answer ???Yes??? to all the practices you use. *If HacDC
decides to not compensate officers, directors, etc. or does not envision
hiring employees in the forseeable future, we should answer that we
don't need such policies as no compensation will be set or granted. If
we believe we will hire employees or compensate officers, etc. we should
consult with an attorney to draft these policies.*

## Part VI: Your Members and Other Individuals and Organizations That Receive Benefits From You

This is a very sticky part of the application. What HacDC does and how
it relates to other organizations will need to be documented in
narrative form in this part of the application.

What we've done and what we plan to do should be noted in this section
and what avenues we choose to open or close for ourselves will need to
be decided before we can fill this out. We should distinguish between
ongoing activities (past/present) and what we plan to do ("planned
activities"). We should structure our responses in terms of "programs",
even though in practice, we don't make specific programmatic
distinctions as such.

The IRS basically wants to make sure that the exempt services and
related "benefits" we provide here are not for any particular group of
individuals or are otherwise self-serving. HacDC is basically in the
clear on this, but it is important to clearly document this as such.


1a. In carrying out your exempt purposes, do you provide goods,
services, or funds to individuals? **Yes. Our core program is providing
a space for the creative exploration of technology. Members and other
individuals use the space and incidental services provided. Our
educational program, through more formalized classes, provide
individuals with introductory knowledge in electronics, open source
software and other technical pursuits. We also plan on providing
services to the community, such as public wireless internet access.
Informally, we serve as a hub for donated equipment which individuals
may avail themselves of for their own benefit. However, we do not as a
rule provide individualized goods or services to individuals. While we
anticipate funding specific projects or pursuits, we do not provide
funds to individuals.**

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1b. In carrying out your exempt purposes, do you provide goods,
services, or funds to organizations? **Yes. We currently provide a forum
for other organizations to have meetings or host workshops. We are also
working with our landlord to provide internet access to other
organizations that rent space in our building.**

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2\. Do any of your programs limit the provision of goods, services, or
funds to a specific individual or group of specific individuals? **No**
*Note, we should draft some kind of non-discrimination policy along
these lines.*

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3\. Do any individuals who receive goods, services, or funds through
your programs have a family or business relationship with any officer,
director, trustee, or with any of your highest compensated employees or
highest compensated independent contractors listed in Part V, lines 1a,
1b, and 1c? **No**

## Part VII: Your History

These are relatively simple and straightforward.


1\. Are you a successor to another organization? **No** *HacDC did not
take on another organization's assets or mission, it was formed entirely
independently.*

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2\. Are you submitting this application more than 27 months after the
end of the month in which you were legally formed? **NO** *As long as we
complete this application by May of 2010, we're OK.*

## Part VIII: Your Specific Activities

These are relatively straightforward questions that shouldn't pose too
much difficulty. In answering specifically, we should attempt to keep
our options open while bearing in mind that HacDC should not contact
with outside organizations to accomplish any fund raising or other
program goals, nor should it serve other groups as such.

One potential issue is raised regarding intellectual property in
Question 10.


1\. Do you support or oppose candidates in political campaigns in any
way? **No** *501(c)(3)s are not allowed to specifically advocate or
influence legislators or pending legislation, while they may, in a
general way, provide information about political issues. Short of
retaining counsel to guide such activities, it's best if HacDC itself
remains politically neutral as an organization.*

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2a. Do you attempt to influence legislation? **No**

2b. (N/A)

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3a. Do you or will you operate bingo or gaming activities? **No** *We'd
have to get really desperate to resort to Bingo, but it is a legitimate
question for churches, native american groups, etc.*

3b./3c. (N/A)

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4a. Do you or will you undertake fundraising? **Yes. Email
solicitations, Personal Solicitations, Foundation Grant Solicitations,
Accept Donations on Your Website, Receive Donations from Another
Organization???s Website, Government Grant Solicitations**

Attach a description of each fundraising program:

**\* General Fundraising: We have pursued general fundraising to support
the efforts of HacDC. Such fundraising has taken place through our
website, at events in our space, external events we participate in and
through various channels by our members' individual initiative.**

**\* Equipment Donations: Most of HacDC's equipment is donated and we
plan on pursuing other equipment donations**

**\* Specific Fundraising: Members have expressed interested and plan on
targeting fundraising efforts towards the acquisition of larger pieces
of equipment or capital intensive projects.**

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4b. Do you or will you have written or oral contracts with any
individuals or organizations to raise funds for you? **No**

4c. Do you or will you engage in fundraising activities for other
organizations? **No**

4d. List all states and local jurisdictions in which you conduct
fundraising.

**\* Washington, District of Columbia: Fundraising for HacDC conducted
by HacDC**

**\* Maryland: Fundraising for HacDC conducted by HacDC**

**\* Virginia: Fundraising for HacDC conducted by HacDC**

**\* Ohio: Fundraising for HacDC conducted by HacDC**

**\* Globally, Via the Internet: Fundraising for HacDC conducted by
HacDC**

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4e. Do you or will you maintain separate accounts for any contributor
under which the contributor has the right to advise on the use or
distribution of funds? **No** ''HacDC should not maintain what are
called "Donor Advised Funds". While people may donate to a specific
cause, i.e. a "Laser Cutter Fund" or other restricted fund, the IRS is
asking about funds where donors have the right to specify where funds go
after the donation is made.

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5\. Are you affiliated with a governmental unit? **No** *HacDC was not
created or controlled by a government agency.*

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6\. Do you or will you engage in economic development? **No** *This is
specifically asking if HacDC will take part in activities like a
Business Improvement District, entities which are somewhat complicated
and well outside the scope of what HacDC does.*

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7a. Do or will persons other than your employees or volunteers develop
your facilities? **No** *This is asking about the development of real
property. HacDC does not own real property, nor does it have any
concrete plans to do so at this time.*

7b. Do or will persons other than your employees or volunteers manage
your activities or facilities? **No**

7c. *We should not have any relationships which need to be documented in
this section*

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8\. Do you or will you enter into joint ventures, including partnerships
or limited liability companies treated as partnerships, in which you
share profits and losses with partners other than section 501(c)(3)
organizations? **No** *While obtaining something like the laser cutter
might be advisable under this scenario, it's advisable to avoid such
relationships. If this status changes, we merely need to inform the IRS
as such as part of our regular 990 filing process.*

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9a. Are you applying for exemption as a childcare organization under
section 501(k)? **No** *We're not in any way qualified to nor would we
gain much by applying under this section*

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10\. Do you or will you publish, own, or have rights in music,
literature, tapes, artworks, choreography, scientific discoveries, or
other intellectual property? **No** *HacDC should not be in the business
of owning intellectual property or managing property rights, especially
as the space we operate in is one of open source style collaboration. We
should also eschew this so our members and others are free to pursue
their own discoveries within our space and determine, on an individual
basis, how those discoveries are licensed.*

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11\. Do you or will you accept contributions of: real property;
conservation easements; closely held securities; intellectual property
such as patents, trademarks, and copyrights; works of music or art;
licenses; royalties; automobiles, boats, planes, or other vehicles; or
collectibles of any type? **Yes**. *We should explain here that we would
accept certain pieces of equipment or real property that have a specific
application to our exempt purposes, i.e. a building for our activities,
a vehicle for equipment moving, etc. The IRS is trying to determine
whether or not we'll be engaging in vehicle donation programs or the
like where such items are donated, then turned around and sold for cash
by the organization.*

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12\. Do you or will you operate in a foreign country or countries?
**No** *As an organization, HacDC itself should not operate in foreign
countries, though it may support other relief efforts.*

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13a. Do you or will you make grants, loans, or other distributions to
organization(s)? **No** *This is a potentially sticky issue. It's
probably best for HacDC to stay out of the grant making business, at
least for now, until HacDC can properly craft a role or mission for
doing so. For now, it's best that HacDC projects remain in house.*

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14a. Do you or will you make grants, loans, or other distributions to
foreign organizations? **No** *Post 9/11, this is an incredibly thorny
issue which HacDC should avoid at all costs.*

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15\. Do you have a close connection with any organizations? **No**.
''HacDC's officers and members are not, as a whole, closely connected to
another organization. The closest connection we might have is to our
landlord, St. Stephen's, but they do not exercise control over HacDC as
an organization nor does HacDC exercise control over it."

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16\. Are you applying for exemption as a cooperative hospital service
organization under section. **No**

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17\. Are you applying for exemption as a cooperative service
organization of operating educational organizations under section
501(f)? **No**

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18\. Are you applying for exemption as a charitable risk pool under
section 501(n)? **No**

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19\. Do you or will you operate a school? **No** *While we offer
classes, we do not have formal instruction, a regular faculty, or a
regularly enrolled body of pupils.*

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20\. Is your main function to provide hospital or medical care? If
???Yes,??? complete Schedule C. **No**

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21\. Do you or will you provide low-income housing or housing for the
elderly or handicapped? **No**

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22\. Do you or will you provide scholarships, fellowships, educational
loans, or other educational grants to individuals, including grants for
travel, study, or other similar purposes? **No**

## Part IX : Financial Data

This information is fairly straightforward. Using the UCOA, the
applicable statements for the financial year ended December 31, 2008 and
the tax year to this point should be easily prepared when the
application is ready.

The balance sheet is for the tax year ended December 31. This will have
substantially changed as of the time of filing, and the statement at the
time of filing.

## Part X: Public Charity Status

HacDC is a Public Charity by virtue of the fact that it receives "broad
public support" from many different sources in the public. A Private
Foundation is one that is primarily funded by a few individuals, trusts,
corporations, etc. The questions below are designed to clarify HacDC's
status as a Public Charity.


1\. Are you a private foundation? **No**

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...

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5\. If you answered ???No??? to line 1a, indicate the type of public
charity status you are requesting by checking one of the choices below.
You may check only one box. **Box 5h most closely applies to HacDC**

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**5h. 509(a)(2)???an organization that normally receives not more than
one-third of its financial support from gross investment income and
receives more than one-third of its financial support from
contributions, membership fees, and gross receipts from activities
related to its exempt functions (subject to certain exceptions).**

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*HacDC qualifies more under 509(a)(2) rather than 509(a)(1), as more
than 1/3rd of its income comes from "(i) gifts, grants, contributions,
or membership fees, and (ii) gross receipts from ... sales of
merchandise, performance of services, or furnishing of facilities, in an
activity which is not an unrelated trade or business ..." and does not
receive more than 1/3rd of is income from investments or unrelated
business income.*

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6\. If you checked box g, h, or i in question 5 above, you must request
either an advance or a definitive ruling by selecting one of the boxes
below. Refer to the instructions to determine which type of ruling you
are eligible to receive. **Box under 6b should be checked**

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Request for Definitive Ruling: Check this box if you have completed one
tax year of at least 8 full months and you are requesting a definitive
ruling. To confirm your public support status, answer line 6b(i) if you
checked box g in line 5 above. *Answer line 6b(ii) if you checked box h
in line 5 above*. If you checked box i in line 5 above, answer both
lines 6b(i) and (ii).

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6.b(ii)

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For each year amounts are included on lines 1, 2, and 9 of Part IX-A.
Statement of Revenues and Expenses, attach a list showing the name of
and amount received from each disqualified person. **None** *Aside from
the officers, HacDC has no disqualified persons as long as no person has
contributed more than \$5,000. A legal argument can be made the officers
are not technically disqualified persons.*

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For each year amounts are included on line 9 of Part IX-A. Statement of
Revenues and Expenses, attach a list showing the name of and amount
received from each payer, other than a disqualified person, whose
payments were more than the larger of (1) 1% of line 10, Part IX-A.
Statement of Revenues and Expenses, or (2) \$5,000. If the answer is
???None,??? check this box. **None** *I don't believe there is anyone
who contributed more than \$5,000 to HacDC in aggregate*

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7\. Did you receive any unusual grants during any of the years shown on
Part IX-A. Statement of Revenues and Expenses? If ???Yes,??? attach a
list including the name of the contributor, the date and amount of the
grant, a brief description of the grant, and explain why it is unusual.
**No.** *This would be if HacDC received a windfall grant that would
wreck the 1/3rd formula.*

## Part XI: User Fee Information

Unfortunately, HacDC does not qualify for the reduced user fee. The
application will cost \$750.

[Category:HacDC_Docs](Category:HacDC_Docs "wikilink")