Entities & Formation¶
BNI operates a dual-entity model. The Foundation owns and publishes the open ecosystem. The LLC executes commercial products and services built on that ecosystem, and sponsors the Foundation's continued development.
flowchart TD
BNIF["Big Nerd Idea Foundation\nbignerdidea.org\n──────────────────────────────\nNon-profit 501(c)(3) forming\nOpen-source software · Hardware frameworks\nArchitecture guidelines · Developer APIs · Docs"]
BNILLC["Big Nerd Idea, LLC\nbignerdidea.com\n──────────────────────────────\nFor-profit LLC\nServices · Apps · Smart Devices\nHardware partnerships"]
BNILLC -- "Sponsorship donation\n(voluntary, ~15–20% of revenue)" --> BNIF
BNIF -- "Open ecosystem\n(software · hardware specs · APIs)" --> BNILLCThis is the Mozilla Foundation / Mozilla Corporation model applied at startup scale — extended to cover hardware and IoT alongside software. The org charts for both entities are in Team & Structure.
Why two entities?¶
| Question | Answer |
|---|---|
| Why not just one nonprofit? | The nonprofit cannot distribute profits to founders. Commercial revenue from services and devices must flow through the LLC. |
| Why not just one for-profit? | A for-profit cannot receive tax-deductible grants or donations, and cannot credibly hold open-source IP as a public good. |
| Why not make the LLC a subsidiary of the Foundation? | That's the full Mozilla model. It's stronger integration but more complex to govern. Two independent entities with a sponsorship agreement is simpler to form and operate at early stage. |
Big Nerd Idea, LLC¶
bignerdidea.com · For-profit LLC
The commercial execution arm of the BNI ecosystem. It delivers Services, Apps, and Smart Device products built on the Foundation's open-source software and hardware frameworks, and sponsors the Foundation's continued development through an annual donation agreement. (See Finance & Grants for the full revenue streams; the consulting practice is detailed in Commercial Services.)
| Field | Detail |
|---|---|
| Entity type | Single-member LLC |
| Owner | Kevin Crump |
| Website | bignerdidea.com |
| Recommended filing state | Home state (simpler and cheaper than Delaware/Wyoming for a small single-member LLC) |
| Tax treatment | Pass-through by default (Schedule C / sole proprietorship treatment unless S-Corp election made) |
Formation checklist¶
- [ ] File Articles of Organization with home state (~$50–150 filing fee)
- [ ] Obtain EIN from IRS — free, online at irs.gov, ~10 minutes
- [ ] Open a business checking account in BNI LLC name using EIN
- [ ] Update any existing contracts or billing to use LLC name + EIN
- [ ] Draft and execute sponsorship agreement with BNI Foundation
Community property states
In Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, an LLC owned by a married person may be treated as a two-member LLC for federal tax purposes even if only one spouse is listed as owner. Confirm with a CPA before filing.
Governance¶
LLCs are not required to have a board of directors. BNI LLC is managed by Kevin Crump as the sole member-manager. An informal advisory board can be formed at any time with no legal requirements — advisors have no fiduciary duty and no voting power, useful for bringing in domain experts (hardware manufacturing, healthcare, social services) without governance overhead. A spouse or family member can hold any role (co-owner, officer, employee, advisor) without restriction, though a co-owner creates a two-member LLC that affects tax filing and employees must be paid market-rate compensation.
Big Nerd Idea Foundation¶
bignerdidea.org · Non-profit 501(c)(3) forming
A forming public charity that owns and publishes the open ecosystem — open-source software (MIT / Apache 2.0 / AGPL), hardware integration frameworks, architecture guidelines, and developer APIs. It holds the IP, maintains public repositories, applies for grants, and accepts tax-deductible donations. It does not distribute profits to founders or board members.
| Field | Detail |
|---|---|
| Entity type | Non-profit corporation, 501(c)(3) public charity |
| Founders | Kevin Crump, Corey Zinn |
| Website | bignerdidea.org |
| Interim fiscal host | Open Collective — enables tax-deductible donations before 501(c)(3) approval |
| IRS filing | Form 1023-EZ (if projected revenue < $50K/yr in first 3 years) or Form 1023 full |
Open Collective fee — figure to confirm
Source docs cite the Open Collective platform fee inconsistently (~3% in one place, ~5% in another). Confirm the current rate against Open Collective's published pricing before quoting it externally. [HYPOTHESIS]
Board of Directors¶
The IRS requires a minimum of three board members for a 501(c)(3). Beyond the minimum, the IRS expects:
- A majority of board members to be independent — not related to the founder by blood or marriage, and not compensated by the organization
- A written conflict-of-interest policy disclosed and signed by all board members annually
- Board decisions made by disinterested members when a conflict exists — no self-dealing
| Composition | Independent majority? | IRS assessment |
|---|---|---|
| Kevin + Corey + 1 independent (3-person) | ✓ 2/3 independent | Acceptable minimum — Corey is unrelated |
| Kevin + Spouse + 1 independent (3-person) | ✗ 1/3 independent | Risky — only one independent member |
| Kevin + Spouse + 3 independents (5-person) | ✓ 3/5 independent | Clean majority — recommended if spouse is on board |
| Kevin + Corey + 3 independents (5-person) | ✓ 4/5 independent | Strong governance posture for grants |
Current board (forming): Kevin Crump (President / Executive Director, confirmed), Corey Zinn (Secretary / Technical Director, confirmed), and an open Treasurer / At-Large seat being sought — ideally someone with domain expertise outside software (nonprofit governance, social services, healthcare, or legal). See Team & Structure and Governance.
Family members: A spouse or family member can serve on the board subject to the independence rules above — on a 3-person board with Kevin already a member, a spouse cannot also serve (only one independent member left, an IRS red flag); on a 5-person board, Kevin + Spouse takes 2 of 5 seats, leaving 60% independent, which is acceptable. A family member can also be a paid employee with fair-market-value compensation approved by disinterested board members (Kevin and the family member recuse) and disclosed on Form 990.
| Board role | Responsibilities |
|---|---|
| President / Executive Director | Leads operations, represents the Foundation, executes board decisions |
| Secretary / Technical Director | Maintains records, manages minutes, oversees technical direction |
| Treasurer / At-Large | Oversees finances, ensures 990 filing, financial controls |
Relationship to BNI LLC — the private benefit rule¶
BNI LLC is the primary sponsor of the Foundation, governed by a written sponsorship agreement specifying the donation amount (~15–20% of annual revenue target, voluntary — no percentage is legally mandated), payment timing, and arm's-length terms (a genuine gift, no quid pro quo). The target percentage exists to ensure the Foundation has meaningful independent revenue and is not solely dependent on the LLC.
Private benefit rule
If the Foundation's only beneficiary is BNI LLC, the IRS can deny or revoke 501(c)(3) status on private benefit grounds. The open-source licenses (MIT, Apache, AGPL) ensure the software is available to everyone — this is the structural safeguard.
License strategy¶
| Asset | License | Rationale |
|---|---|---|
| Core libraries and frameworks | MIT or Apache 2.0 | Maximum adoption |
| Hosted SaaS platforms | AGPL | Requires open source if hosted by others |
| Hardware integration specs and reference architectures | Apache 2.0 | Patent grant protects hardware partners; maximum compatibility |
| Firmware and embedded software | MIT or Apache 2.0 | Broadest device adoption |
| Enterprise add-ons and Smart Device products | Commercial (via BNI LLC) | Funds Foundation development |
Formation timeline¶
A phase-by-phase plan from zero — two developers, no funding, no entities formed — to a sustainable dual-entity operation with active grants and commercial revenue.
flowchart TD
P0["Phase 0 — Now\nZero money · 2 developers\nBuild the open-source MVP"]
P1["Phase 1 — Month 1–2\nForm Big Nerd Idea, LLC\n~$150 in filing fees"]
P2["Phase 2 — Month 2–4\nOpen Collective fiscal sponsorship\nFree — accept donations immediately"]
P3["Phase 3 — Month 3–6\nFirst revenue · First grant application\nFirst sponsorship donation to Foundation"]
P4["Phase 4 — Month 4–8\nFile BNI Foundation formally\n~$400 in filing fees"]
P5["Phase 5 — Month 6–12\n501(c)(3) determination letter\nAnthropic nonprofit pricing unlocked"]
P6["Phase 6 — Month 12–18\nFirst grant received · $10K–$50K\nFirst part-time stipend possible"]
P7["Phase 7 — Month 18–36\nSustainable operations\nFull-time founders · First outside hire"]
P0 --> P1 --> P2 --> P3 --> P4 --> P5 --> P6 --> P7| Phase | Timing | Cost | What happens |
|---|---|---|---|
| 0 — Before any entity | Now | $0 | Build MPowerUP to a demo-able, publicly accessible state. The open source must exist before the LLC sells services on it — both an IRS requirement (genuine public benefit independent of the LLC) and a market reality. Early consulting income flows through Kevin's sole proprietorship short-term. |
| 1 — Form BNI LLC | Month 1–2 | ~$150 | File Articles of Organization, get EIN, open business banking. Establishes legal identity and clean personal/business separation; prerequisite for the sponsorship relationship. Do not form the Foundation yet — nothing to donate and the ~$400 cost isn't justified without revenue or a clear grant opportunity. |
| 2 — Open Collective | Month 2–4 | $0 upfront | Register the Foundation as a project on Open Collective with Open Collective Foundation as fiscal host. Unlocks tax-deductible donations, a transparent public ledger, and eligibility for most grants — the fastest path to a functional nonprofit. |
| 3 — First revenue + first grant | Month 3–6 | $0 | LLC closes its first consulting/hosting/support contract ($5K–$20K). Donate 15–20% to the Foundation via Open Collective (first documented sponsorship transaction). Submit first grant application; start with Protocol Labs or a smaller regional funder for faster cycle time. Evenings-and-weekends stage. |
| 4 — File the Foundation | Month 4–8 | ~$400 | Incorporate as non-profit (~$50–100), draft bylaws (board structure, officer roles, conflict-of-interest policy), seat the board of 3, obtain a separate EIN, and file IRS Form 1023-EZ (~$275). |
| 5 — Determination letter | Month 6–12 | $0 | Receive the IRS 501(c)(3) letter (~2–4 weeks after 1023-EZ if eligible). Apply for Anthropic non-profit pricing and vendor non-profit pricing (GitHub, Google for Nonprofits, AWS). Execute the formal sponsorship agreement. Apply for major grants under your own determination letter. |
| 6 — First grant received | Month 12–18 | $0 | First grant funds ($10K–$50K) arrive. The Foundation can pay a small part-time stipend (board-approved). Onboard a third contractor if workload justifies it; seat the full 5-person board if expanding scope. |
| 7 — Sustainable operations | Month 18–36 | Funded by grants + LLC revenue | One or both founders go full-time; first non-founder hire; hardware partnership pilot becomes a commercial product; board expanded to 5; first Form 990 filed. |
IRS filing timeline and cost
Form 1023-EZ: ~$275 fee, typically approved in 2–4 weeks. Available if projected gross receipts are under $50K/year for the first 3 years. Form 1023 (full): ~$600 fee, can take 3–12 months. Required if projected revenue exceeds $50K or the organization has complex activities.
Cost summary¶
| Phase | Action | Cost |
|---|---|---|
| Phase 1 | Form BNI LLC (Articles of Organization) | ~$150 |
| Phase 2 | Open Collective setup | $0 |
| Phase 4 | Incorporate BNI Foundation | ~$100 |
| Phase 4 | IRS Form 1023-EZ | $275 |
| Total cash to operational nonprofit | ~$525 |
Everything else is sweat equity. The ~$525 can be spread across 4–8 months and funded by the first BNI LLC consulting invoice.
Phase 7 financial picture¶
| Source | Estimated range |
|---|---|
| BNI Foundation grants (annual) | $50K–$200K |
| BNI Foundation donations and Open Collective | $5K–$20K |
| BNI LLC managed services and enterprise contracts | $50K–$150K |
| BNI LLC hardware/device revenue | $10K–$50K early stage |
| Total | $115K–$420K |
These are planning figures only — actual outcomes depend on grant success rate, sales cycle, and market adoption.