Investigate org structure possibilities

[binford2k]

We have several possibilities for the structure of this group.

1. standalone 501c3 non-profit org
2. open collective or other similar umbrellas
3. joining the linux foundation, nivenly, or other foundation
4. potentially others

[yakatz]

Structure: US Non-Profit

Pros:

1. We have 100% control
2. Many other companies can make donations directly to us (Github, Google, TechSoup)

Cons:

1. Paperwork
2. Confirm correct legal fit

Action Items:

1. Choose a state and agent
2. Determine expected revenue (if any)
3. Have a board meeting to nominate someone to file paperwork
4. File state incorporation and request EIN
5. File federal 501(c)(3) application
   Processing time for the simple application is usually a few weeks.

Types of US non-profits:

Which of these do we really fit in:

501(c)(3) - most preferential tax/donation treatment

The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.

501(c)(3) organizations must file a yearly federal tax return. If they have less than $50,000 "gross receipts", this is a "postcard" that says "We exist and we are aware of our legal obligations". If they have more, the form needs to list the biggest donors and recipients of funds. 990-N can be filled out by anyway, but the other version of the form usually require an accountant/tax professional. There is no penalty for filing late, but failing to file for 3 years will result in the organization losing tax-exempt status.

Other types

IRS Reference

Section	Description
501(c)(1)	Corporations Organized Under Act of Congress (including Federal Credit Unions)
501(c)(2)	Title Holding Corporations for Exempt Organization
501(c)(4)	Civic Leagues and Social Welfare Organizations and Local Associations of Employees
501(c)(5)	Labor, Agricultural and Horticultural Organizations
501(c)(6)	Business Leagues, etc.
501(c)(7)	Social and Recreation Clubs
501(c)(8)	Fraternal Beneficiary Societies
501(c)(9)	Voluntary Employees' Beneficiary Associations
501(c)(10)	Domestic Fraternal Societies
501(c)(11)	Teachers' Retirement Fund Associations
501(c)(12)	Benevolent Life Insurance Associations, Mutual Ditch or Irrigation Companies, Mutual or Cooperative Telephone Companies, or Like Organizations (if 85 percent or more of the organization's income consists of amounts collected from members for the sole purpose of meeting losses and expenses)
501(c)(13)	Cemetery Companies (owned and operated exclusively for the benefit of their members or which are not operated for profit)
501(c)(14)	State Chartered Credit Unions, Mutual Reserve Funds
501(c)(15)	Mutual Insurance Companies or Associations
501(c)(16)	Cooperative Organizations to Finance Crop Operations
501(c)(17)	Supplemental Unemployment Benefit Trusts
501(c)(18)	Employee Funded Pension Trusts (created before June 25, 1959)
501(c)(19)	Veterans' Organizations
501(c)(21)	Black Lung Benefit Trusts
501(c)(22)	Withdrawal Liability Payment Funds
501(c)(25)	Title Holding Corporations or Trusts with Multiple Parents
501(c)(26)	State-Sponsored High-Risk Health Coverage Organizations
501(c)(27)	State-Sponsored Worker's Compensation Reinsurance Organizations
501(c)(28)	National Railroad Retirement Investment Trust (45 U.S.C. 231n(j)
501(c)(29)	Qualified Nonprofit Health Insurance Issuers

501c3 - pretty easy to start:

1. Pick corporate officers - most states require at least 2 officers and a board of directors - and resident agent - someone who lives or works in a state and will handle any legal mail that comes in. If we pay a resident agent, that will have a cost. I personally have experience with Maryland.
2. Most states also have a standard form for bylaws for non-profits and a small form filing fee. Most states do not have ongoing costs, but require filing annual forms. Technically, you must file with the secretary of state anywhere you do business or raise money, but this isn't observed by many small organizations.
3. Filing with the federal government:
   • If you expect to have less than $50,000 gross receipts for the next 3 years, this is a very simple form and there is a $400ish filing fee.
   • Otherwise, there is a very long form and a $800ish filing fee.
4. Keep up with tax forms every year

[yakatz]

Open Collective still requires a separate legal entity, but they handle managing funds.

[silug]

The Linux Foundation had the following advice about forks:

• Name
  • The name is important. Come up with something distinct and trademark-friendly.
  • Ensure that we own the domain, GitHub namespace, etc. associated with the new name. (If anyone helps by squatting on any of those, get them to transfer stuff to the new organization.)
  • Remove any existing trademark usage from the codebase. That includes paths, command names, etc. (While this may not be strictly necessary, it eliminates an opportunity for legal action later.)
• Governance
  • Clearly define who the maintainers of the GitHub repos (etc.).
  • Clearly define who the decision-makers are for the organization.
• Process
  • Clearly define the release management process.
  • Establish who pays for any necessary resources (CI, hosting, etc.).
• Security policy
  • Establish a security policy and a security team.
  • Work on security coordination with Perforce outside the politics involved with the fork.
• Keep it professional!
  • Avoid attacks on Perforce/Puppet. Take the high road.

[silug]

I'm told that the application process for setting up a non-profit entity in the US can take 18 months.

LF does not require a separate legal entity (we'd be a project under their 501(c)(6) umbrella), but they do require a LF member to sponsor/support the application.

[yakatz]

I'm told that the application process for setting up a non-profit entity in the US can take 18 months.

That was once true, but now it doesn't take anywhere near that long - the actual incorporation takes a few minutes. IRS approval of the 1023-EZ (for small organizations) takes no more than 2 months. The 1023 regular form (more than $50k) takes about 7 months.

[bastelfreak]

Open Collective still requires a separate legal entity, but they handle managing funds

@yakatz can you elaborate on that a bit?

There are a few confusing names out there. opencollective.com is the platform. https://oscollective.org/ acts as the fiscal host /legal entity for vox pupuli, via opencollective.com. But vox pupuli has no own legal entity, we are just part of oscollective.