Sandwiched between two canvases hanging from his shoulders, Aaron Redlin stands while a boy and a girl kneel around him. Dabbing brushes into lumps of paint, they draw on his canvas sandwich boards: a blue fish, a tree in fall colors, a bold magenta Martian. “Do you get paid for this?” asks the girl, outlining a blue face.

“No,” says Aaron.

“Yeah,” commiserates a man picking out tubes of paint from a bucket, “you never get paid for anything fun or good for others.”

For the Freestyle Family, five twentysomething artists, fun and good for others have always been synonymous–and equally unpaid: With no budget, and a loose cooperative structure, the five-member collective stages public art-ins where youth can paint, draw, play music and write songs. At one art party, the Freestyle Family set up 40 canvases and a bunch of paint, then let students loose on the canvases–they started dumping paint on the floor and breakdancing in it. The idea is to make people realize that anyone can create music and art, and have fun doing it. “If you let people express themselves,” says founder John Kaiser, “they will deal with the bad stuff inside.”

Instead of applying for grant money, they subsidize their guerrilla public art education with day jobs. All five members live on the cheap and work part-time, holding classes, performing and running a gallery out of their own pockets. They spend pretty much all of their free time running the collective-”because it’s our duty to the world,” says Kaiser.

It may seem like a no-brainer that fledgling socially conscious organizations should go nonprofit. But groups that provide nontraditional education and recreation for children often run out-of-pocket for years before signing on, even though the work they do is essentially community service. Dubbed the “out of pocket sector” by author William Upski Wimsatt in his 1999 book No More Prisons, many spend years as non-non-profits, either because the complex machinery of the nonprofit world is so time-consuming, or because their ad hoc forms of community service for youth don’t easily fit into fundable categories.

“It’s a big decision,” says Nicole Burrowes, a founding member of Sista II Sista, a collective that teaches community organizing to teenage girls in Bushwick. “We thought it could dramatically mess up something in our structure.” Founded in 1996, Sista II Sista didn’t incorporate until January of 1999, after it received a $2,000 grant from Wimsatt’s Active Element Foundation and $50,000 from the Fund for the City of New York.

Aside from the obvious complications of incorporating and filing for a 501(c)(3)–and diverting precious energy from the kids–the eight women who ran Sista were loath to surrender control to a board of directors who weren’t doing the day-to-day work, and who might have different ideas about how to do it. “That was one of our main struggles,” says Burrowes. “Why does a board have that much say when it’s only here a few times a year? That didn’t make sense to me.”

With their mission of empowering and educating young women, the members of Sista II Sista feared that by leaving the out-of-pocket sector, they might lose the egalitarian, collectively run culture of the group. “Where nobody’s getting paid, everybody steps up. The fire and the energy is easier to maintain at one level,” says Burrowes. “But when some people are getting paid, it changes the energy.”

Because small groups are often ineligible for grants (or simply too overburdened to fundraise), Active Element, a foundation Wimsatt started two years ago, hands out seed grants without the formal application process most foundations require. Essentially, the foundation comes to the nonprofit, not the other way around; the idea is to let small nonprofits remain small, and focus on what they do, not on administration.

“There’s a sort of country club of nonprofits that are sophisticated about fundraising, that know to hire consultants and are able to–and then there’s the groups that aren’t,” says Wimsatt. “Fundraising is its own skill, and it takes a huge investment of time and energy to make that leap.”

But foundations like Active Element are rare. More often than not, nontraditional kids’ groups rely on other nonprofits to loan office space or act as fiscal sponsors, lending 501(c)(3) status while groups pin down their often vague missions.

Like most out-of-pockets, Sista II Sista got a leg up from a bigger nonprofit sibling, Make the Road by Walking, one of four nonprofits to lend them space and expertise. And a year ago, Freestyle moved into a loft in the same building as a nonprofit called The Space, which hooked them up with school kids needing art workshops.

Working with The Space and Phun Phactory, an established nonprofit in the same building, Freestyle members saw how nonprofit status gave them two of the key ingredients to running educational programs: credibility with schools and access to funding.

In April, the Freestyle Family filed for incorporation. After five years of running programs with virtually no funding at all, they decided that without nonprofit status, they wouldn’t have the legitimacy to win the foundation grants and contracts with schools that they need to make the organization’s work reach more people.

For the Freestyle Family, going nonprofit helped them figure out if what they were all about was performance art or education. “If you’re trying to clean up a polluted river, you know what to do,” says Kaiser. “But it took us years to nail down exactly what we were doing.”

Now they’ve developed a six-week course for third-graders that started last month. And while they may have to spend more time fundraising, going nonprofit will give them the access–and paychecks–to be able to work with larger groups of kids. In May, the Freestyle Family convened a dozen teens who are making a documentary about the Queens Plaza mall. Working together, they painted one huge canvas depicting their dreams for the shopping mall’s future.

Nora McCarthy is a Brooklyn-based freelance writer.