Threads for piamancini

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inactive-user edited 2 years ago | link | on: Announcing the Clojurists Together Foundation

This announcement seemed particularly off-colour for the Software Freedom Conservancy. I read about it in their email announcement, sent by Deb Nicholson. From the SFC email:

After much collaborative discussion between Conservancy and Clojars, we have agreed that the newer initiatives and upcoming plans for Clojars belong in a new independent trade association which provides ways for for-profit companies to join together to fund and influence important open source work and also have direct control over their assets and operations to accomplish this work with their own timescale and procedures. We have thus encouraged and advised the Clojars community as they created the Clojurists Together Foundation.

However, their technical fellow Bradley Kuhn tends to be down on trade association “foundations”. In a post about the Linux Foundation community bridge:

The second difference is that LF is not a charity, but a trade association — designed to serve the common business interest of its paid members, who control its Board of Directors. This means that donations made to projects through their system will not be tax-deductible in the USA, and that the money can be used in ways that do not necessarily benefit the public good. For some projects, this may well be an advantage: not all FOSS projects operate in the public good. We believe charitable commitment remains a huge benefit of joining a fiscal sponsor like Conservancy, FSF, GF, or SPI. While charitable affiliation means there are more constraints on how projects can spend their funds, as the projects must show that their spending serves the public benefit, we believe that such constraints are most valuable. Legal requirements that assure behavior of the organization always benefits the general public are a good thing. However, some projects may indeed prefer to serve the common business interest of LF’s member companies rather than the public good, but projects should note such benefit to the common business interest is mandatory on this platform — it’s explicitly unauthorized to use LF’s platform to engage in activities in conflict with LF’s trade association status).

And in a post about the launch of the Node Foundation, “Trade Foundations are Never Neutral”:

Meanwhile, I’ve spent years pointing out that what corporate form you chose matters. In the USA, if you pick a 501(c)(6) trade association (like Linux Foundation), the result is not a neutral non-profit home. Rather, a trade association simply promotes the interest of the for-profit businesses that control it. Such organizations don’t have the community interests at heart, but rather the interests of the for-profit corporate masters who control the Board of Directors. Sadly, most people tend to think that if you put the word “Foundation” in the name0, you magically get a neutral home and open governance.

Fortunately for these trade associations, they hide behind the far-too-general term non-profit, and act as if all non-profits are equal. Why do trade association representatives and companies ignore the differences between charities and trade associations? Because they don’t want you to know the real story.

Obviously the official announcement of the new trade-association-as-Foundation is going to be upbeat, it would be unpolitic to do otherwise. However I got the strong impression that rather than listening to the words I should be listening to the morse code they tapped out on the arm of the chair they’re tied to. The subtext is almost literally “we realised that we don’t want to be forced to act in the public interest, we want to be forced to act in the interest of our sponsors”.
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  danielcompton edited 2 years ago | link
  Hey leeg, I’m the founder of Clojurists Together, secretary, and treasurer. You raise quite a few different points which I want to address, but most importantly I’d like to push back on this:
  
  However I got the strong impression that rather than listening to the words I should be listening to the morse code they tapped out on the arm of the chair they’re tied to. The subtext is almost literally “we realised that we don’t want to be forced to act in the public interest, we want to be forced to act in the interest of our sponsors”.
  
  Let me state unequivocally that we are not leaving the SFC because we want to act more in the interest of our corporate members. We have never had any of our members ask for any kind of undue influence over our actions. We send quarterly surveys to all members to hear from everyone. We have the same board and election structure as a trade association as we did under Conservancy: we don’t have any classes of board seats for company members, and every member gets one ballot (ranked choice voting) for board elections, whether they are a developer giving $5/month or a company giving $1,000/month.
  
  After much collaborative discussion between Conservancy and Clojars, we have agreed that the newer initiatives and upcoming plans for Clojars belong in a new independent trade association which provides ways for for-profit companies to join together to fund and influence important open source work and also have direct control over their assets and operations to accomplish this work with their own timescale and procedures. We have thus encouraged and advised the Clojars community as they created the Clojurists Together Foundation.
  
  I’m not sure I agree with all of this framing. We are leaving the SFC so that we can offer different kinds of grants, so that we can accept payments via Stripe, and so that we can turn around contracts and payments quickly to the projects we fund. We haven’t had any discussions about for-profit companies influencing the work that we do. “direct control over their assets and operations to accomplish this work with their own timescale and procedures” is accurate. The SFC required review and approval over all contracts that we gave to projects as part of maintaining their 501(c)3 status. This is a reasonable thing to ask for, but could take some time depending on the SFC workload. They also reimbursed payments on a NET-30 schedule which is again reasonable but meant that payments were slower.
  
  Ultimately Clojurists Together as a grant-making organisation wasn’t a good fit for Conservancy as we grew and wanted to offer more grants. Every quarter we asked the SFC to do a ton of work to review new projects and onboard new people to pay. As a trade association, we will be able to reduce context switching by having one organisation select a project, write the contract, approve the worklogs, and make the payments.
  
  Trade associations vs charitable organisations
  
  I’ve been meaning to write an article about this, but this can serve as a first draft. When we were looking to leave the SFC we looked at lots of options including joining Open Collective, Community Bridge, forming our own 501(c)3, and forming our own 501(c)6.
  
  501(c)3 pros:
  
  Charitable mission is enshrined in the organisation
  
  Donations from any business or individual in the US are tax deductible
  
  Being a charity comes with a set of expectations which means companies are less likely to expect certain things from you
  
  501(c)3 cons:
  
  Forming a 501(c)3 is time-consuming, expensive, and difficult. It took us a few months to get a determination from the IRS to be approved as a 501(c)6. Our lawyer said that 501(c)3’s can take on the order of years to get a determination.
  
  There is a high overhead to running a 501(c)3.
  
  It is not always clear whether payments to a 501(c)3 are tax deductible if you are not a US tax resident. Countries generally don’t allow you to deduct charitable donations to charities in other countries, though you could claim the donation as a business expense.
  
  501(c)6 pros:
  
  Relatively easy to form and run a trade association
  
  Membership dues to trade associations are generally tax deductible business expenses by individuals and companies worldwide, as long as you use Clojure as part of your business (not tax advice, just what we’ve seen in general).
  
  501(c)3 cons:
  
  Trade associations can be subject to undue corporate influence, depending on how the bylaws and board are structured.
  
  Trade association rules are more lax than charities, depending on your point of view, you may not like that trade associations have less oversight in the activities they undertake.
  
  I’d agree with Bradley that there can be problems with a trade association foundation. However I don’t think that all trade associations foundations are problematic, though different people may disagree on that point.
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    inactive-user 2 years ago | link
    
    Thanks, that’s useful additional information beyond what was in the announcement. I appreciate you taking the time to explain it, which you didn’t need to do, and happy to hear that you’ll continue to support the community.
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    piamancini 2 years ago | link
    
    Trade associations can be subject to undue corporate influence, depending on how the bylaws and board are structured.
    
    This is key here - the Open Source Collective is a 501c6 and its members are the open source projects themselves, organized as collectives. So it’s not true that c6s always serve corporate owners that control the board, it depends on how you define who your members are.
    
    If there’s interest, I can share the OSC 1024 filing.

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piamancini edited 2 years ago | link | on: Announcing the Clojurists Together Foundation

Hey folks - Pia Mancini from Open Collective. We’ve created several organizations including, a C corp, a trade association (c6) and a charity (c3) - I’d be more than happy to join a call / discussion and share my experience with all these entities. Hopefully it’ll help you through the process. Either ping me pia@opencollective.com or snatch a time calendly.com/piamancini/call Cheers EDIT: Also happy to post here if you have specific questions right now that are blocking your process.