Basic Guidelines For Artists & Small Business
In Times of Need & Innovation
Artists and small business owners are familiar, if not conversant, adjusting to the flow of circumstances. But, adapting during the pandemic has been a lot, for all of us. The entire globe is under stress, and for small businesses, restaurants, artists, and craftspeople who survive on tight margins and public marketplaces, the impacts can be devastating.
We are still in the initial phases of the shock and scramble of our collective world-as-usual shuttering down. Our impulse to activate, collaborate, and innovate is not wrong, but we need a lot of self-care during this time. And we may just need to stop everything and process for a moment too.
We are all in this together, and I am here to support you the best I can. I’ll be launching some helpful triage services for kickstarting an online store affordably, with lots of free resources for basic how-to dos. Watch for that coming soon. Meanwhile, I want to share some supportive resources for artists and small business owners whose businesses rely on in-person relationships or have been compromised in their ability to sustain themselves during this time.
Taking Donations & Subscriptions
Basic Starter Tips
Important Note: These guidelines may vary from state to state or your individual circumstance. Please investigate and do your own deeper research before you launch. Gathering these basic comparisons is a starting point.
Many processing fees have changed with Covid-19 pandemic. While PayPal is profiting off of the crisis with by increasing their processing fee from 2.2% to 2.9% for personal donations (I witnessed this change as I was doing this research and former lower rate can still be seen in Google search), most fundraising tools (with fewer resources than PayPal) are lowering or waiving those fees temporarily, at risk to their own platforms, but for the greater good of our world and communities. I will keep PayPal in the list, but recommend finding other tools.
Relief for Artists, Small Businesses & Education
Springboard for the Arts — Updated with coronavirus/COVID-19 resources for artists. Based in Minnesota.
GiveMN — Updated with new Covid-19 fundraising tools for non-profits, schools and Minnesota causes.
Taxable
What’s Taxable: My awesome accountant at Fox Tax put it this way: “If artists or small businesses have people sending them money via Paypal, or are running "donations" through a business bank account, or soliciting "donations" in their capacity as business owners to help cover operating expenses for their business, theses would be treated as business income.”
1099-K — Depending on your unique circumstances and the tool you use, you may need to claim PayPal, credit card, or other payments or donations. You may be issued a 1099-k from your vendor or credit card company if you live in the U.S. and make over $20,000 throughout any given calendar year.
Patreon — This subscription tool is specifically customized to assist podcasters, video creators, musicians, visual artists, writers, communities, non-profits, education, and more. Create on a regular basis and start a subscription program with fees that you can customize. Offer a monthly membership program that includes ability to connect with your patrons by sending them goods, livestreams, polls, chats, and lots more. View Patreon tax info.
KickStarter — An all or nothing fundraising platform for getting business ideas up and running. If a business is funded in the U.S., Kickstarter applies a 5% fee to the funds collected, plus payment processing fees via Stripe (roughly 3-5%). (No fees if a project is not funded.) Check out their lengthy list of resources for artists during the pandemic, including emergency grants, freelance resources, legal aid, and more.
PayPal — Accept personal donations (2.9% + 30 cents per transaction). This is a simple way to create a flexible, temporary or ongoing donation tool. Note that PayPal is profiting off the crisis and increased fees to 2.9% around March 20th, prior to that the personal donation fee was 2.2%.
Non-Taxable
What’s non-taxable. My accountant outlined it like this: “GoFundMe-type "donations" to pay for personal expenses are gifts, not charitable donations. So they are not treated as taxable income to the person who receives them, but are also not a tax deductible donation for the person who gives them.”
GoFundMe — Free personal fundraising tool, if times get tough. 0% fees via GoFundMe. Standard transaction fees apply to credit and debit card transactions. You can start a GoFundMe for yourself, for a friend, or for a charity. Personal fundraising includes: medical, memorial, emergency, nonprofit, education, or animals. Non-profits can fundraise or accept donations via GoFundMe Charity.