Foundations, Non-Profits and Open Source

Carol SmithMetabrainz Foundation, Google

Why this talk?

Disclaimer

• I am not a lawyer.• I am also not a tax accountant.

Does your open source project need to become a non profit?

Probably not.

Why not?

• It's somewhat expensive.• It's time consuming.• It's a lot of paperwork.

http://www.flickr.com/photos/cseeman/4138033883/

How costly is it?

~$3k per year, of which (for MusicBrainz):

• $1k is insurance for board of directors liability• $1k is for insurance required by hosting service• $1k is for accounting services

Think of it this way: If your annual budget is ~$10k, you'll spend 30% of your budget maintaining your non-profit status. 

How much time does it take?

• Board of Directors meetings• Filing paperwork• Asking for donations, fundraising• Talking to your tax person, talking to your lawyer, etc.

How much paperwork?

• Initial form 1023 to request tax-exempt status• 990 forms/taxes - even if you make less than $25,000• Meeting minutes from Board of Directors meetings• Bank account paperwork• Website where people can access all this paperwork

Umbrella Organizations to Consider

• Software Freedom Conservancy• Software in the Public Interest• Apache Software Foundation• Python Software Foundation• Open Source Geospatial Foundation• Eclipse Foundation• Lots of other ones not on this list

So then why would you?

• Liability• Finances• Intellectual Property• Employees• Grants• Non-monetary donations

If you do decide to

• Hire a great attorney• Hire a great tax person• Take time choosing your Board of Directors• Commit to the project and the foundation

Board of Directors

• Select people with common interests• Musicbrainz: music business, EFF, Creative Commons, now

the BBC• Your customers?• Be clear on the time commitment

Bylaws/Rules of Incorporation

They're your friends, actually!

Licensing Fees

How to be a good citizen with a foundation

• Consider becoming an umbrella organization yourself• Continue the good citizenship you practiced with your open

source project• Don't let the time and money it takes to run your non-profit

sacrifice your community

The Community Today

Questions?