I am the founder/director of an international club-like organization devoted to the
preservation and preservation of a traditional building craft. The
organization has been in existence for five years.  Currently we have
about 500 registered members.  Recently we attempted to establish the
organization as a 501c3 non-profit corporation with by-laws, a Board
of Directors, Treasurer and Secretary, but that fell apart.  The
remaining board members are inclined to reform as a for-profit entity
but are unsure as to what form to take.  Several of the remaining
board members, and the members of an Advisory Council favor becoming a
business -a type S, or F, or C, or Close or LLC corporation with
myself as Director (a "benevolent monarch") so that I can be paid for
the work I do as office manager, as editor of the bi-annual magazine
and as principal organizer of the annual gathering (membership fees,
the magazine and the gathering are the principal sources of income.) I
have no objection to the organization being a business, or to my being
paid, but I am concerned that it maintain its identity as a community
that craftsmen and craftswomen would wish to join.  Can an
organization exist as a club AND a business?  What IS the best form
for our entity?

Dear FigureHead-ga,

There's no reason why you can't establish this organization as a business.

Looking at INCOME:

Your members would still get the benefits they've signed up to receive.
They could still pay a subscriber fee to be part of the organization. 
(Look at the financial model of Magazines. Subscriptions are like dues.
Think of Playboy - publication and members.)

They could still pay for attending the annual gathering. 

You could still receive advertising revenues, from members, 
from businesses, from the website (if any). 

What you can't receive are deductible donations - since it won't
be a non-profit organization. But, let's face it, it's often easier
to get sponsors or advertisers than donations.

ENTITY FORM:

If you were to establish the business format as an LLC or S Corporation, 
any profits, after all expenses are paid, would pass through to the personal
tax returns of the shareholders (S corp) or members (LLC).

COMPENSATION

You couldn't take a salary if it's an LLC, if you own part of it.
But you could if it's a C or S corp.  

In an LLC, as a managing member, if you own a piece of the business, 
you could get a guaranteed payment. That's kind of like a salary, 
except you have to pay all the self-employment taxes personally. 

In an S-Corp or C Corporation, you may have wages. 

In a C Corporation, the company may even pay for your benefits,
like medical etc. It can't in the S corporation if you own 2% 
or more of the company.

SUGGESTION:

If I were to run this as a business, instead of an association, I'd set
it up as a C corporation. That way, nothing flows through to any person's
tax return. I'd establish the Board of Directors or an Advisory
Board that could vote on policy, programs, staff, budgets, wages, benefits etc.
I would make sure that all the money was spent (or allocated to a program)
before the end of the year, so there was no taxable profit.

You could get wages. You could get benefits - medical coverage, 
retirement plan, etc. The Board members could get an honorarium
from the income. 

You could hire staff as the organization grows. 

Whatever you do, since it involves so many people, do take this to 
a good tax professional who can evaluate the goals all of you
want to achieve. Don't save a few bucks trying to sort this out
yourselves. You don't want to find yourselves bickering about this
later and pointing the finger because someone didn't dot an "i" or 
cross a "t".

If you tell me where you're located, I may be able to recommend someone
who can help you. 

Best wishes,

Your TaxMama-ga