[drupal-devel] Drupal foundation / non-profit
Hi! My opinion is that given the diversity of Drupal it's almost impossible to strive for an entity which can give tax-deductions. You'd need a non-profit entity in USA, Canada, UK, Germany and Belgium just to cover the main areas. If Boris or anyone else is able to rise a foundation which can accept money in the name of Drupal without paying taxes I'd say that's good. If we set up tax-deduction entities per country then the money flow between our entities will become a problem. Just my two cents about where to put my two cents. Regards NK
Impossible? I don't mind investigating and/or doing up some non-profit corp paperwork for the USA. I could finally put my business degree to some use. Karoly Negyesi wrote:
Hi!
My opinion is that given the diversity of Drupal it's almost impossible to strive for an entity which can give tax-deductions. You'd need a non-profit entity in USA, Canada, UK, Germany and Belgium just to cover the main areas.
If Boris or anyone else is able to rise a foundation which can accept money in the name of Drupal without paying taxes I'd say that's good. If we set up tax-deduction entities per country then the money flow between our entities will become a problem.
Just my two cents about where to put my two cents.
Regards
NK
On Friday 01 July 2005 07:57, David Norman wrote:
Impossible? I don't mind investigating and/or doing up some non-profit corp paperwork for the USA. I could finally put my business degree to some use.
If you have a non-profit in USA and I (being a Hungarian) give some money to it, will it pay taxes after my donation? I understand that I won't be able to deduct the donation from my taxes. If you have a business degree, do you have some knowledge on setting up nonprofits in various countries and somehow moving money between them? Regards NK
You might be interested in contacting the Mozilla Foundation about how they do this. Robin On 7/1/05, Karoly Negyesi <karoly@negyesi.net> wrote:
On Friday 01 July 2005 07:57, David Norman wrote:
Impossible? I don't mind investigating and/or doing up some non-profit corp paperwork for the USA. I could finally put my business degree to some use.
If you have a non-profit in USA and I (being a Hungarian) give some money to it, will it pay taxes after my donation? I understand that I won't be able to deduct the donation from my taxes.
If you have a business degree, do you have some knowledge on setting up nonprofits in various countries and somehow moving money between them?
Regards
NK
Karoly Negyesi wrote:
Hi!
My opinion is that given the diversity of Drupal it's almost impossible to strive for an entity which can give tax-deductions. You'd need a non-profit entity in USA, Canada, UK, Germany and Belgium just to cover the main areas.
If Boris or anyone else is able to rise a foundation which can accept money in the name of Drupal without paying taxes I'd say that's good. If we set up tax-deduction entities per country then the money flow between our entities will become a problem.
If we had non-profit *tax-deductible*[1] entities in USA, Canada, UK, Germany and Belgium, they could all voluntarily be members of the "Drupal Federation" (a legal, international organization *without* tax-deductible status). They could also all voluntarily donate money to that Federation, and the Federation could be responsible for managing spending on global/international Drupal activities. The country-local non-profits could also do whatever they felt was appropriate within their own countries. Therefore I propose we create the "global" Drupal "federation" organization[2] without concern for it being tax deductible, as a place to be the fiduciary body for Drupal money handling to start. Then folks in each country can create non-profit, tax-deductible Drupal foundations there if they want. I think tax-deductible foundations in several countries are a good idea, too. -- Chris Johnson [1] In the USA, any business can be a non-profit if so organized and registered in whichever state it is registered. Getting tax-deductible status is a federal-level IRS thing, and is much more work. That is: non-profit != tax-deductible or tax-exempt, although most tax-deductible or tax-exempt organizations are non-profits. [2] This formally organized federation/organization should be created in one country, and then maybe eventually go through the process of legally creating registered subsidiaries/foreign branches/whatever works best in each country where there is lots of Drupal activity. This would require some research to see if it is helpful to do so or not. It might not be necessary. But if so, it is far less work than creating a tax-deductible organization, at least in the USA.
Chris Johnson wrote:
If we had non-profit *tax-deductible*[1] entities in USA, Canada, UK, Germany and Belgium, they could all voluntarily be members of the "Drupal Federation" (a legal, international organization *without* tax-deductible status). They could also all voluntarily donate money to that Federation, and the Federation could be responsible for managing spending on global/international Drupal activities. The country-local non-profits could also do whatever they felt was appropriate within their own countries. More on the point of non-profit != tax-deductible, I think it's important if the local foundations are to ever get significant corporate donations, the tax-deductible part will be essential.
Speaking of membership, there are AFAIK three basic ways to organize the directors of a non-profit corp (speaking for Florida). 1) Membership - members elect a board of directors 2) No membership - the bylaws establish a self-perpetuating board of directors and often specifically prohibit the corporation from having "members". 3) Wholly owned subsidiary - when the board of directors is appointed by another corporation I get the feeling (3) would be something the core developers would be interested in, but I'm pretty sure the other corporation would also have to be incorporated in the same state. I think the way around that would be to do the membership style and just make an application process where only recognized, key people could become members - everyone else is just a donor. Moreover, I don't think the board has to be all native citizens, though I think having at least one native is probably a good idea. Option (2) doesn't really seem (to me) like a good option for anything other than a family business. Robin Monks wrote:
You might be interested in contacting the Mozilla Foundation about how they do this. Does anyone have contact(s) with Mozilla Foundation to see if someone will join in on this thread?
On 1-Jul-05, at 1:32 PM, David Norman wrote:
You might be interested in contacting the Mozilla Foundation about how they do this.
Does anyone have contact(s) with Mozilla Foundation to see if someone will join in on this thread?
We have talked to people there briefly about this, and I have contact info for Asa, whom I met at a conference recently, and will bring this up when I talk to him. IIRC, they actually have multiple entities -- at the very least one in Europe and one in the US. That is, talking to them wasn't particularly helpful, since we still have to figure this out ourselves. Some devil's advocate questions: How much does non-profit / tax deduction matter? Does it *have* to be a non-profit? There are tax-write offs, and then there are business write offs. Basically, we need an entity through which money can flow, both in and out. -- Boris Mann http://www.bmannconsulting.com
Boris Mann wrote:
Some devil's advocate questions: How much does non-profit / tax deduction matter? Does it *have* to be a non-profit? There are tax-write offs, and then there are business write offs. I'd say if you're going to forfeit profits, go all the way and get the IRS recognition paperwork filed for the USA's entity. If you want to play devil's advocate, I think a better question might be to ask whether the Drupal entity should be run for-profit. Developers are a large part students right now, but at some point they're going to need regular income that a for-profit unit could theoretically provide.
[switch out of devil's advocate mode] That's not to say Drupal couldn't have tax-exempt, non-profit and for-profit entities.
CivicSpace Labs is now a non-profit organization. Since all our code is Drupal code except install.php, the configure module, and soon to be obsolete Contact Manager. We are about as close a match to a Drupal foundation as you are going to get. Does that work for you all? Kieran On Jul 2, 2005, at 8:08 PM, David Norman wrote:
Boris Mann wrote:
Some devil's advocate questions: How much does non-profit / tax deduction matter? Does it *have* to be a non-profit? There are tax-write offs, and then there are business write offs.
I'd say if you're going to forfeit profits, go all the way and get the IRS recognition paperwork filed for the USA's entity. If you want to play devil's advocate, I think a better question might be to ask whether the Drupal entity should be run for-profit. Developers are a large part students right now, but at some point they're going to need regular income that a for-profit unit could theoretically provide.
[switch out of devil's advocate mode] That's not to say Drupal couldn't have tax-exempt, non-profit and for-profit entities.
Kieran Lal wrote:
CivicSpace Labs is now a non-profit organization.
We are about as close a match to a Drupal foundation as you are going to get.
Does that work for you all?
Kieran
Kieran, Can you be a bit more precise? Is CivicSpace Labs a non-profit only? Or does it also have IRS tax-exempt status? Does it constitute a charity for contributions, as a 501(c)3 organization would? (I suppose I could go read the list of approved charities at the IRS site, but I think it's pertinent here.) For myself, being able to contribute and deduct it from my taxes as an individual is a useful feature. I'll contribute more money in such a case, since the government is essentially paying half the cost for me. For business entities contributing to a Drupal foundation, it's not as complicated. They only need to show it as a business expense and they can deduct it, non-profit or not. Thanks. -- Chris Johnson
On 2-Jul-05, at 9:16 PM, Kieran Lal wrote:
CivicSpace Labs is now a non-profit organization.
Since all our code is Drupal code except install.php, the configure module, and soon to be obsolete Contact Manager.
*cough* install system *cough* :P
We are about as close a match to a Drupal foundation as you are going to get.
Does that work for you all?
Not unless you want to change your name to "The Drupal Foundation", appoint Dries to lead it, and canvas the developer community to make up the rest of the board :P Seriously, Drupal needs its own independent entity, I believe. If you want to funnel money from US donors, that might be something work looking into. -- Boris Mann http://www.bmannconsulting.com
On Jul 3, 2005, at 1:05 AM, Boris Mann wrote:
On 2-Jul-05, at 9:16 PM, Kieran Lal wrote:
CivicSpace Labs is now a non-profit organization.
Since all our code is Drupal code except install.php, the configure module, and soon to be obsolete Contact Manager.
*cough* install system *cough* :P
We are about as close a match to a Drupal foundation as you are going to get.
Does that work for you all?
Not unless you want to change your name to "The Drupal Foundation", appoint Dries to lead it, and canvas the developer community to make up the rest of the board :P
Seriously, Drupal needs its own independent entity, I believe. If you want to funnel money from US donors, that might be something work looking into.
Sure, understood. In the mean time I'll try to get you a rough idea of the costs and time it took set up CivicSpace Labs as a non-profit, which I believe is a 5013c. I am pretty sure it took several months, I'll let you know who our lawyers are. I assume we spent more than the $5500 you are about to take in legal and other fees(trademarks, banks, filing papers, phone calls) getting it accomplished. But Drupal might be able to get more legal aid than we were able to. If you need a stop gap solution since you dealing with lawyers, the IRS, and a mostly volunteer base and you have to get it done in 10 weeks or so then we would be happy to help make sure everybody gets paid on time. I assume there will be some costs associated with setting up a US bank account, getting checks, having legal contracts written up and reviewed. At CivicSpace labs we have been going through all of this for the last several months and it's expensive and takes time. So Drupal foundation, absolutely let's do it. We will help with advice and referrals as much as possible. Getting a Drupal foundation that can cut checks to the interns in the next 10 weeks...it's going to be tough but doable. Kieran takes off CivicSpace Labs hat. I have served on the Board of Directors of the Waterloo Cooperative Residence Incorporated and Appalachian Long Distance Hiker's Association. I have some knowledge of getting boards organized and running. I am not looking for a seat, just want to personally offer help to get the Drupal foundation up and running. Let me know what I can do to help. Cheers, Kieran
-- Boris Mann http://www.bmannconsulting.com
On Sat, 2005-07-02 at 23:08 -0400, David Norman wrote:
Boris Mann wrote:
Some devil's advocate questions: How much does non-profit / tax deduction matter? Does it *have* to be a non-profit? There are tax-write offs, and then there are business write offs. I'd say if you're going to forfeit profits, go all the way and get the IRS recognition paperwork filed for the USA's entity. If you want to play devil's advocate, I think a better question might be to ask whether the Drupal entity should be run for-profit. Developers are a large part students right now, but at some point they're going to need regular income that a for-profit unit could theoretically provide.
A non-profit organization can and often does have paid staff. I'm not 100% familiar with the regulations regarding staff salaries in non-profits, but as far as I know, a non-profit entity could provide the same salary that a for-profit entity could. I think speaking with an attorney, or at the very least someone who is very knowledgeable of these things, in whatever country is chosen is required.
On Sat, 2 Jul 2005, David Norman wrote:
Boris Mann wrote:
Some devil's advocate questions: How much does non-profit / tax deduction matter? Does it *have* to be a non-profit? There are tax-write offs, and then there are business write offs. I'd say if you're going to forfeit profits, go all the way and get the IRS recognition paperwork filed for the USA's entity. If you want to play devil's advocate, I think a better question might be to ask whether the Drupal entity should be run for-profit. Developers are a large part students right now, but at some point they're going to need regular income that a for-profit unit could theoretically provide.
I don't think that "income for developers" should be on the agenda for such a foundation. Cheers, Gerhard
Some devil's advocate questions:
Now I'll play devil himself ... This discussion is *not* about drupal-development and is out of scope for this. We've already blabberred on about tax deductions long enough. I suggest moving to drupal.org infrastructure list or to the web forums.
participants (9)
-
Boris Mann -
Brian Puccio -
Chris Johnson -
David Norman -
Gerhard Killesreiter -
Karoly Negyesi -
Kieran Lal -
Moshe Weitzman -
Robin Monks