Comment Need: a 501(c)3 nonprofit corporation. Why/how: (Score 1) 101
My name is David Rostcheck. In addition to being a software engineer and benefitting a lot from open source, I'm a director for the Bisexual Resource Center (http://www.biresource.org), a 501(c)3 nonprofit. Through involvement w/ activism, I've learned how and why nonprofits work. I've been thinking nonprofits and open source a lot, it's great to see this question. This problem has been solved thoroughly in other fields; there's a rich toolset we should be using. Here's what we need and why:
First, the Open Source movement needs a *501(c)3* (US IRS-registered) nonprofit corporation to accept donations and give grants. Other non-501(c)3 nonprofits won't cut it. If a 501(c)3 asks IBM for $1M to fund open source grants, it makes financial sense for IBM to give them the money. While Linux International generally has the right idea, if they asks for $1M, IBM loses $1M. Plus, 501C3s get more $ from individual donors because they can write it off as a tax deduction (apx. 30% more on average). Any nonprofit intending to fund open source should be actively working to attain 501C3 status.
Yes, attaining this status takes paperwork, money, and time. This is for a reason. If a charity hasn't pursued, it, IRS doesn't think they're serious (and you shouldn't either, no matter how good their intentions).
Next, the corporation needs an *Executive Director*, a *Development Director*, and a *Board of Directors*. The executive director and development director should be paid, both of them are full-time jobs and take full-time attention. Members might have to pay to be on the board. They might be individuals or organizations. The board members need to bring significant name recognition with them. You can split a board into different kinds of board. Individuals might be on the board of directors and not have to pay, organizations might go on a nonvoting (advisory) board and need to pay. The board's role is to meet infrequently, set policy, and hire/fire exec. and devel. director. The executive director runs the org, directing programs and media efforts to further the org's mission (this is important because your advisory board members contribute to get the name association with your movement). The development director raises money full-time, seeking grants, corporate donations, and individual donations. They could initially be the same person, but should be separated as soon as $ permits.
The nonprofit furthers its goals by distributing grants. It needs a standard grant application, guidelines set by the board, and a grant approval committee to decide who to give $ out to.
You can accelerate 501C3 status by finding another
501C3 to serve as a "501C3 fiscal sponsor". Doing this is essential - if there's an existing linux charity org that's not 501C3 and isn't spending most of its time looking for a 501C3 sponsor, it doesn't know what it's doing or isn't really serious. Linux International looks like its pretty much along the right lines, but it's not 501C3 and it seems to have some weird practices. Like, it doesn't fund itself out of its own donations. This
sounds good to the naive but is an actively bad idea. Any nonprofit needs to operate. The $ has to
come from somewhere. Its efficiency is measured on its annual report when it tells its contributors
what % of its efforts went to the end goal. If it doesn't fund out if its donations, it's going and
getting other donations that aren't reported, so who knows how efficient it is - very bad, keep things on the level.
Why is all this necessary? Well, it would *really*
kick-start open source to another level altogether - which is needed for open source to really win a paradigm shift. If people could go 1/2 time and work on open source projects, or do a year funded work on a project, or get some hardware that they otherwise couldn't get, working on Open Source would become a serious career path to many who currently contribute what they can, but could do much more with more support. And if there was a 501(c)3 taking the money, it could raise some really significant amounts while acting indirectly to benefit companies and the development of technology in general. But those companies really can't give serious money now because there's no appropriate vehicle...
First, the Open Source movement needs a *501(c)3* (US IRS-registered) nonprofit corporation to accept donations and give grants. Other non-501(c)3 nonprofits won't cut it. If a 501(c)3 asks IBM for $1M to fund open source grants, it makes financial sense for IBM to give them the money. While Linux International generally has the right idea, if they asks for $1M, IBM loses $1M. Plus, 501C3s get more $ from individual donors because they can write it off as a tax deduction (apx. 30% more on average). Any nonprofit intending to fund open source should be actively working to attain 501C3 status.
Yes, attaining this status takes paperwork, money, and time. This is for a reason. If a charity hasn't pursued, it, IRS doesn't think they're serious (and you shouldn't either, no matter how good their intentions).
Next, the corporation needs an *Executive Director*, a *Development Director*, and a *Board of Directors*. The executive director and development director should be paid, both of them are full-time jobs and take full-time attention. Members might have to pay to be on the board. They might be individuals or organizations. The board members need to bring significant name recognition with them. You can split a board into different kinds of board. Individuals might be on the board of directors and not have to pay, organizations might go on a nonvoting (advisory) board and need to pay. The board's role is to meet infrequently, set policy, and hire/fire exec. and devel. director. The executive director runs the org, directing programs and media efforts to further the org's mission (this is important because your advisory board members contribute to get the name association with your movement). The development director raises money full-time, seeking grants, corporate donations, and individual donations. They could initially be the same person, but should be separated as soon as $ permits.
The nonprofit furthers its goals by distributing grants. It needs a standard grant application, guidelines set by the board, and a grant approval committee to decide who to give $ out to.
You can accelerate 501C3 status by finding another
501C3 to serve as a "501C3 fiscal sponsor". Doing this is essential - if there's an existing linux charity org that's not 501C3 and isn't spending most of its time looking for a 501C3 sponsor, it doesn't know what it's doing or isn't really serious. Linux International looks like its pretty much along the right lines, but it's not 501C3 and it seems to have some weird practices. Like, it doesn't fund itself out of its own donations. This
sounds good to the naive but is an actively bad idea. Any nonprofit needs to operate. The $ has to
come from somewhere. Its efficiency is measured on its annual report when it tells its contributors
what % of its efforts went to the end goal. If it doesn't fund out if its donations, it's going and
getting other donations that aren't reported, so who knows how efficient it is - very bad, keep things on the level.
Why is all this necessary? Well, it would *really*
kick-start open source to another level altogether - which is needed for open source to really win a paradigm shift. If people could go 1/2 time and work on open source projects, or do a year funded work on a project, or get some hardware that they otherwise couldn't get, working on Open Source would become a serious career path to many who currently contribute what they can, but could do much more with more support. And if there was a 501(c)3 taking the money, it could raise some really significant amounts while acting indirectly to benefit companies and the development of technology in general. But those companies really can't give serious money now because there's no appropriate vehicle...
