[gentoo-nfp] Re: [gentoo-project] Questions for Gentoo Council nominees: Gentoo Foundation - Treasurer Response!

[Kristian Fiskerstrand <k_f@gentoo.org>]

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On 7/3/19 2:27 PM, Rich Freeman wrote:
> On Wed, Jul 3, 2019 at 7:27 AM Kristian Fiskerstrand <k_f@gentoo.org> wrote:
>>
>> On 7/3/19 12:47 PM, Rich Freeman wrote:
>>> You also need to consider the tax savings themselves if the umbrella
>>> is 501c3.  That is also a percentage of the net (the CPA costs being
>>> deductible most likely).
>>
>> It depends on the type of income, iirc e.g GSoC wouldn't be tax exempt
>> in either case. Same for royalties from sale of merchandise
> 
> Certainly some forms of income aren't tax-exempt, and we should
> definitely get a professional opinion on this.  However, have you seen
> anything to suggest GSoC specifically is taxable?
> 
[...]

Not really. Arguably Gentoo is in the business of producing code, to
receive monetary considerations for doing so is a related activity and
not a spurious one, we also have (or have had) mentor projects etc that
could be used to argue this case. I don't know, but if it is, it is a
more significant taxable income than most other we have which is why I
listed it first; the CPA/IRS which specialize in this under US tax law
will figure it out for us. But I agree that the merchandise is a cleaner
example, although not as regular and somewhat declining.

> It is probably a good idea to consider that some income will be 
> taxable.  Of course, it is still only net profits that are taxable
, so
> any GSoC money spent on GSoC itself wouldn't be net-taxable even if 
> the overall income would be (at least, that is my understanding).

Right, although there aren't that many expenditures related to GSoC.

> 
> And of course if we were using an umbrella org the org itself would
> have its compliance staff make these determinations and have rules
> around this stuff.  We wouldn't need to develop our own expertise and
> chances are their staff could also make recommendations on how to
> structure activities to minimize tax burden.  If they're charging
> based on net income then it would be in their interests to minimize
> our taxes anyway.

CPA would help us out in the case of foundation, iirc some tax forms
needs to be filled out related to payment from google as well, but I
haven't read these forms, they might shine some light on the
interpretations :)

>>
>> Also needs to account for potentially higher future earnings, we haven't
>> actually been doing active fundraising.
> 
> I have mixed feelings on this.  Numbers-wise you're right - if some
> professional umbrella org gets a shared of anything donated to
> "Gentoo" they're going to be out there advocating for people to donate
> to "Gentoo."  As a result "Gentoo" will probably end up with a lot
> more money.  On the surface this seems like a good thing.  On the
> other hand, I do get concerned about what effect this could have on
> the community and atmosphere of the project.
> 
> This is part of why I advocate for trying to reduce our dependency on
> money and servers and so on.  These things all potentially come with
> strings attached, and I'd prefer to be more dependent on the goodwill
> of our code contributors than the goodwill of our


Its an interesting point, but I personally don't agree, the discussion
is really too broad to take atm :)


-- 
Kristian Fiskerstrand
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