[Board] OSGeo vs 501c3 status - inpur required

[Frank Warmerdam]

On 12-11-09 12:44 PM, Daniel Morissette wrote:
> Board,
>
> Maybe my mail from yesterday was too long and you missed the question targeted
> at you. So just in case here it comes again, and please let me know what your
> preference is if you have one, or if you don't know then it's okay to say so,
> but at least acknowledge that you read this email.
>
> Our deadline to respond to the IRS is next week. I'll try to get another
> extension from them, but we need to make a decision on which way we go soon in
> order to craft a response.
>
> So the question we need to ask ourselves now is:
>
> "Do we want to maintain the project sponsorship program and setup a taxable
> subsidiary for it, or do we drop the project sponsorship program completely?"

Daniel,

I assume that the above question assumes we are still trying to be a 501c3
charity, is that right?  My personal opinion is that we should back off
501c3 status and operate as a general purpose non-profit, though I must
admit I'm still vague on the implications of that.

I am still not clear what it means to be a non-profit without being
501c3 or 501c6.  Are we going to be taxed on retained earnings?  If
we spend more than we take in, can we carry that forward as a taxable
loss to a future year to offset extra income?  If so, it seems we could
operate with minimal taxation as long as we don't accumulate large
assets, and we would not have any of the restrictions of 501c3 status.

Is this plausible?

I'm not super keen on abandoning the project sponsorship program though
it isn't critical currently.  However, I do hope in the future to seek
and use more money via such mechanisms.  If the GDAL project sponsorship
program is quiet it is partly because Even fixes all the bugs so there
isn't much need for a paid maintainer. :-)

What I don't want to do is bend ourselves completely out of shape to
satisfy IRS rules about 501c3 status if the benefit is modest.  At
this point I am not sure I see the benefit.

Best regards,
-- 
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I set the clouds in motion - turn up   | Frank Warmerdam, warmerdam at pobox.com
light and sound - activate the windows | http://home.gdal.org/warmerda
and watch the world go round - Rush    | Geospatial Software Developer