[OOTB-hive] Becoming a non-profit

Fri Jul 24 06:02:19 BST 2015

I've been at OSCON this week, and have received a lot of useful advice.

Heiko's information on Germany was really interesting. I was told that one challenge with organizing in Germany is that the law is really strict about non-profits sticking strictly to their defined mission, so you want to define the mission in a vague manner on the legal documents. Something like "promote open source solutions for business functions."

I was told that a Fedora group in Germany specifically named Fedora advocacy in their charter. Red Hat was told by their US lawyers that the Fedora Group in Germany looked like a tax shelter. Red Hat was the primary donor in a German non-profit that was using its trademarks. For the non-profit to remove the explicit reference to Fedora, they had to completely dissolve. The Fedora Group in France had the same problem, but was able to update their charter in only a couple of days.

Another useful tip was that no single group should provide more than 50% of the donations to the non-profit, or it starts to look more like a business subsidiary for US tax purposes.

Organizations that can provide Fiscal Sponsorships for open source projects (in order of how easy they are to work with):
* Free Software Conservancy
* Software in the Public Interest
* FSF / FSF Europe

Open source companies that provide resources to open source advocacy organizations:
* Red Hat Open Source and Standards group (namely Brian Proffit and Jim Jagielski)
* Bluehost's Open Source Outreach (Jared Smith)
These two groups have money and resources that exist to help open source advocacy groups advance their missions. They can provide web hosting, meeting spaces, swag, and other useful things.

I had a long discussion with representatives of the Fedora and CentOS communities.

Fedora is a completely independent organization to Red Hat, but Red Hat does nominate one member of their board, and also provides a full time salary to whoever is elected by the community to be the project leader.

CentOS was run by seven core contributors and thirty contributors and testers. It took a few years for the project to get very useful or to have much adoption. They never had any legal organization, or did any conferences. When Red Hat chose to officially sponsor them, there was no organization to sponsor, so they offered full time employment to the core team, and recognition to the other contributors.

I was a bit shocked to hear how small the CentOS team is, given the impact they had on the industry. Order of the Bee is already bigger in numbers, and I expect will likely have a big impact over time. You are doing great work!

For this year, I recommend working with the Free Software Conservancy as a fiscal sponsor / fiscal proxy so that Order of the Bee can handle the money necessary for a BeeCon.

I can't make any promises, but I could make a solid proposal that Alfresco provide a donation to the fiscal sponsor if they assist Order of the Bee with BeeCon.

Down the road, I would like to see Alfresco eventually sponsoring Order of the Bee on a similar level to how Red Hat sponsors Fedora (but with a mission closer to CentOS). I could see Alfresco providing legal help and other resources. But I also recognize that Order of the Bee needs to be independent and in control of its own future. You'll have to tell me what would be useful.

If desired, I can introduce members of this group to people in each of the helpful organizations I mentioned above.

Let me know how you would like me to assist.

Cheers,

Richard

On Wednesday, July 22, 2015 15:05:37 Richard Esplin wrote:
> I agree with all of this. But as I look into it I will share my research. And it is easier for me to research in the US.
> 
> I spoke with a lawyer at the Free Software Foundation (Donald Robertson). Here are my notes:
> * They provide "Fiscal Sponsorship" to projects to help them manage these money issues.
>    https://en.wikipedia.org/wiki/Fiscal_sponsorship
> * They regularly provide this service for open source conferences hosted by third-parties.
> * Order of the Bee's BeeCon probably fits in their mission because Alfresco is LGPL licensed.
> * They usually ask for a branding concession in exchange for their service. They like us to emphasize "Free Software" (not open source), GNU, and GPL . They asked the Seattle Linux Conference to change their name to Seattle GNU/Linux Conference in exchange for this service.
> * FSF Europe is probably the right group to work with. They use a different term for the same thing.
> 
> Cheers,
> 
> Richard
> 
> On Monday, July 20, 2015 13:34:02 Jeff Potts wrote:
> > Good info, thanks.
> > 
> > I want to separate this issue from BeeCon as they are related, but not
> > fully dependent on each other. There are ways the conference can accept and
> > spend money without requiring The Order to have a formal business entity. I
> > do not want the conference held up waiting on this. Maybe The Order will
> > form an entity and, if it does, maybe the conference will leverage it, but
> > it definitely is not a requirement.
> > 
> > Regarding where the entity should be formed, because most board members
> > (and membership) are based in Europe, I think it probably makes the most
> > sense to do something in Europe rather than the US.
> > 
> > Jeff
> > 
> > On Mon, Jul 20, 2015 at 10:55 AM, Richard Esplin <
> > richard.esplin at alfresco.com> wrote:
> > 
> > > As part of the discussion around BeeCon, I spent a little bit of time
> > > reading about what it would take to organize Order of the Bee so that it
> > > could accept money. Here are a few things I found:
> > >
> > > * Organizing as a non-profit in the US requires incorporating on the state
> > > level ($100-ish dollars), and then filing for non-profit status with the
> > > IRS ($750). It probably requires a few days of paperwork. The IRS rejected
> > > non-profit applications from a few open source projects two years ago.
> > >
> > > * I'm pretty good at filling out this sort of paperwork and willing to
> > > help out, but I won't be able to look at it until the end of August.
> > >
> > > * Germany and Belgium seem promising for organizing as a non-profit around
> > > open source projects.
> > >
> > > * OOTBee can become part of the Software Freedom Conservancy, Software in
> > > the Public Interest, or another foundation that exists to provide fiscal
> > > stewardship services to the open source community. But as the community
> > > organization for a commercial open source project, we might not directly
> > > fit their mission.
> > >
> > > * I think CentOS has needs that are the most similar to ours. It looks
> > > like currently is it legally affiliated with Red Hat.
> > >
> > > * We might be able to get some free legal advice from the Software Freedom
> > > Law Center, Free Software Foundation, or Free Software Foundation Europe.
> > >
> > > * I'll get a sense for whether Alfresco would be willing to help OOTBee
> > > organize as a non-profit.
> > >
> > > * I'll ask around at OSCON this week to see how other projects address
> > > these issues.
> > >
> > > Cheers,
> > >
> > > Richard
> > > _______________________________________________
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> > >
> 
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