Maximum New York 2.0

501(c)(3)-->LLC // institutional experimentation // subscriptions are *on* // what's next 🗽🚀

Summary: MNY is an LLC now! There will be more products and services! MNY will have more events! Join me!

I started Maximum New York in March 2022 with the very first cohort of The Foundations of New York City. Since then I’ve taught nine total cohorts of that marquee class, with applications for cohort 10 opening in the middle of this month.

MNY’s mission: create an onramp for kind, smart, ambitious people into the civic realm of New York City. And MNY has become just that. Alumni have attained elected, appointed, and hired office, and are doing so in higher numbers at faster rates. But beyond that, they write online, join civic associations, and support the further growth of MNY itself.

To support MNY’s continued growth and success, there are three big changes I’d like you all to know about.

(1) MNY will move forward as an LLC, rather than a 501(c)(3)

I have been a fiscally sponsored non-profit for the past year, and it has served me well in that time. But it will not serve me as well going forward. Every incorporated form has a set of affordances, and a business or association should use the form that gives it the best results. MNY is not just a civic school, but an experiment in finding the best form for effective civic groups. This is not a typical path, but I believe it is worthwhile. If you would like to learn more about all of the many corporate forms (including the municipal corporation, which NYC is), indicate that you’d like to take my corporations class.

“But what about donations, Daniel?” I’ve spoken to my largest donors, and this does not matter to them. They give to political campaigns, which are also not tax deductible, and they view this similarly (except the campaign never ends). Further: people who give smaller amounts do not itemize their tax returns, so it doesn’t matter that their donations are technically deductible. They wouldn’t deduct them anyway.

“But what about favorable tax treatment, Daniel?” I will simply pay the taxes. I will especially do this because it “buys” administrative simplicity and operational flexibility—which are really what I’m after. Non-profits legally restrict the ways in which their employees interact with government; for a civics school, this is terrible. I am not going to enforce a separation of theory and practice for myself and other instructors in the name of some tax advantage.

It is not worth having a non-profit organization if that structure makes your ground game ineffective and defeats your cardinal goals (even if it gets more money as a result, which is not a given). I think more people are realizing this. Arnold Ventures did!¹

“But what about grants for non-profits, Daniel?” Frankly, existing and legacy grantors have not be champing at the bit to support MNY, my best efforts notwithstanding. But students have supported me via tuition income, and the vast majority of my donations come from former students (who don’t really care about me being a for-profit entity). The market and students support MNY, philanthropists mostly do not. There are lessons for everyone there!

“But how will you earn money as a civic school, Daniel?” MNY has been supported by revenue since the beginning. Even if all my donations went away, it would still continue and provide a frugal living for me to keep up the work. Believe it or not, you can make a civic school that people will pay for and love! I enjoy selling my classes, a product in which I profoundly believe, and salesmanship is more my forte than donor relations. So I am leaning into my strengths. I will still seek out partnerships and donations, but within the administratively simpler framework of an LLC.

Finally: I believe civics classes benefit from market discipline. If they cannot win on the market, they are probably too boring and not good enough in important ways. And I will keep my sliding-scale pricing philosophy. My classes cost what they cost, and those prices reflect the effort that goes into them, but successful applicants can give themselves whatever discount they need when paying.² I do not ask why they give themselves a discount—that’s their business, and I trust applicants to be honest.

(2) MNY will have more products, including regular paid posts on this site

Having a for-profit structure is exciting, because you can more easily experiment with new products and services without worrying how close they come to endangering your special tax status.

The first product is a regular stream of paid-subscriber-only posts. If you subscribe, you immediately have access to the first one of these, the MNY one-pager (anyone can read, only paid subscribers may comment). This is the executive summary of the organization’s strategy and mission, and I am happy to have subscriber comments on it.

Going forward, paid subscribers will also get regular overviews of the legislation and administrative rules that NYC passes. These take a lot of work to produce, and I’m excited to iterate them to such a point that they regularly win paid subscriptions.

If you’re a free subscriber, you will still have access to most posts and research—but I aim to pique your interest with the paid ones. You will still have free access to the most niche, but insightful analysis of NYC government out there.

(3) Toward a more social MNY

I anticipate making more money going forward, and one way this will manifest is regular events for alumni and those who are yet-to-be alumni.

There are also people around the US (and the world!) who are interested in setting up their own civics schools. The changes above will facilitate this more easily.

Want to see more MNY in the world?

• Join the waitlist to be informed when class applications open in about two weeks. If you want to get a coffee and chat about them, just drop me a DM (Twitter or LinkedIn) or an email.

• Buy a gift subscription for someone! You can send it directly to their email address.

• Subscribe! Quote tweet! Share!
  Embrace the good art of being an active subscriber—tell me what you want, and I’ll join it with my personal effort to give you both what you want, and what NYC and our political world need.

Excelsior.

1. From the Odd Lots podcast from June 20, 2024, “John Arnold on Why It's So Hard To Build Things in America,” emphasis added (15:02-15:50):

…so we created these two arms over the years we had our [501(c)(3)] and we had our [501(c)(4)]. They have different tax treatment and so we had to have this Chinese wall between the two, and it became very annoying because we had some employees that were with the c3 and some were that were with the c4…we want to put more research and more evidence-based findings into government into policy and so trying to combine those organizations had a lot of synergy, and so what we did was we brought all employees up into this LLC and we could knock down the Chinese wall…there were a few kinds of negative tax consequences from that, but in the grand scheme it wasn't that significant and we thought the benefits from having one organization where employees could both be experts on the research as well as sit and talk with policy makers to advocate for better policy…

2. Some of my smaller seminars are an exception here—they just have a low, flat fee.