Commercial Use Of DMS

The few rules established around commercial use of the Space are sparse, thus the following is the Secretary's interpretation of acceptable commercial use of DMS.

The Dallas Makerspace has no specific Standing Rules regarding commercial use of the Space, (otherwise defined as for personal profit in this document).

The IRS's Position

The IRS has a lengthy document on Inurement and Private Benefit Issues. This is a lengthy document, however the second page has a summary of the issue:

Distribution of earnings. An organization is not operated
exclusively for one or more exempt purposes if its net earnings inure
in whole or in part to the benefit of private individuals. For the
definition of the words "private shareholder or individual," see
paragraph (c) of section 1.501(a)-1. 

There are numerous examples in this document of individuals benefiting from their association with non-profits that have been held to be inurement that do not necessarily involve the transfer of funds or resources.

The Secretary's Position

Being conservative in the interests of maintaining DMS's nonprofit status, we have generally interpreted utilization of our facilities for the purpose of personal profit to be inurement. As such there are no affirmative policies involving use of our resources for personal profit because doing so would invite trouble from the IRS and the Texas Attorney General. There is no fee, no donation to DMS, no volunteer work to offset the use of DMS for personal profit encoded in our policy nor should there be.

Conversely, the organization generally lacks the administrative resources to ascertain whether any given use of DMS is for personal profit or for purposes consistent with our non-profit purpose (education, skills development) nor is it a wise use of resources to attempt to do so. Thus, there is no negative policy against the use of DMS for personal profit because the practice is already prohibited by the IRS.

Telltales of Commercial Use

While it is not practical for DMS to police members usage of resources, the following could be construed to be using DMS resources for personal profit and may warrant investigation and/or action by DMS leadership:

• Shipping large volumes of materials to DMS and/or shipping completed goods from DMS
• Listing DMS as a business address
• Serial production of similar projects in volume
• Excessive use of storage
• Meeting clients at DMS
• Excessive use of resources
• Arrangements for exclusive use of resources with Chairs, Officers, Directors