From mboxrd@z Thu Jan 1 00:00:00 1970 Return-Path: Received: from lists.gentoo.org (pigeon.gentoo.org [208.92.234.80]) (using TLSv1.2 with cipher ECDHE-RSA-AES256-GCM-SHA384 (256/256 bits)) (No client certificate requested) by finch.gentoo.org (Postfix) with ESMTPS id 6337C138359 for ; Sun, 5 Jul 2020 00:57:49 +0000 (UTC) Received: from pigeon.gentoo.org (localhost [127.0.0.1]) by pigeon.gentoo.org (Postfix) with SMTP id 26DAAE0835; Sun, 5 Jul 2020 00:57:47 +0000 (UTC) Received: from mail-ej1-x62a.google.com (mail-ej1-x62a.google.com [IPv6:2a00:1450:4864:20::62a]) (using TLSv1.2 with cipher ECDHE-RSA-AES128-GCM-SHA256 (128/128 bits)) (No client certificate requested) by pigeon.gentoo.org (Postfix) with ESMTPS id AC631E0831 for ; Sun, 5 Jul 2020 00:57:46 +0000 (UTC) Received: by mail-ej1-x62a.google.com with SMTP id f12so12650574eja.9 for ; Sat, 04 Jul 2020 17:57:46 -0700 (PDT) DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=gentoo-org.20150623.gappssmtp.com; s=20150623; h=mime-version:references:in-reply-to:from:date:message-id:subject:to; bh=MCv42lSil+Nq8bVbWS/Q5teJ1v6FsZRbn2hpUPnSW/g=; b=jXByqfWcgyf8ORw9dt7zp4rVSh9nH+xhnBp7Ym8LEmsJztkJn71b0wUBHZILQIdRle hX+fl6sV0N/9mHTV4saT4VwQwRELCtBLmqLZoVV2HUtVu5WMP3xyuyQF2lBNNGfoaOxI aS1b8YwOBw6gGhPM88z9c25P6Bduc610Vr9ULvGIfBs2OmxMmcwGhFy2loq+73bdqCbE z1Z6mGT9ffgVkhkNSHF/4pYuNvXsRlrTKUEFeueEjtEJ5aPCyDSz0DfMmsj4DHAZFC8K 3VJRFvDUHGc1PlRpu9mqL9FT3ZpORA3Lz6DRcJhFnVCavDqdYZOLsGfwC7r4d2Kg5aeU DcuA== X-Google-DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=1e100.net; s=20161025; h=x-gm-message-state:mime-version:references:in-reply-to:from:date :message-id:subject:to; bh=MCv42lSil+Nq8bVbWS/Q5teJ1v6FsZRbn2hpUPnSW/g=; b=iPgc+ohJ80BYtl+mJDhSHYjG6Cin+azCjrbR/vx4MwFtguKwIF/0Fep14++U8MmRK9 0WWI1GUgGaj327dWyUrwvH5rVhGOvcWU3pf9I86JhB4zWh3XgnFsHAt+IjM3g2Qm+Fpa eRaSqhYHQ+RZWH2pkj5GmfHaLNGmFS2DAuiI6XzzP4AKa1YRP2X5p16vjfdUS+nH/t7W nO3rloxR79f8gNSx/J03c6g1ObdfjbuFWZO/3o8lyyftAnH0jiR5L5A0YTkCxDQWYu2c ZNWOhesNge6DcLLpK3klPY76WSrSFadyWPuBYzbXECraF8fsu+WfyDDjO4Yt388k+BH3 VFfw== X-Gm-Message-State: AOAM533rXPCEzYND3ZXmB9bu0ISK48L2XjcqNV6mkg3/MpGICG9apq79 WmuiqcoatH/uW7d0D/nktZYOTWPHOlzzGjGCnWb3/PVG X-Google-Smtp-Source: ABdhPJyrscn+M8u6Vb7s8cv3P9+aK+/lrR1gQv3GFjHgeWocOnjqBCSBDQ8BQdOs8ePsQllu0jieJFcjKQFQy5i7DUA= X-Received: by 2002:a17:906:c209:: with SMTP id d9mr13345333ejz.449.1593910664761; Sat, 04 Jul 2020 17:57:44 -0700 (PDT) Precedence: bulk List-Post: List-Help: List-Unsubscribe: List-Subscribe: List-Id: Gentoo Project discussion list X-BeenThere: gentoo-project@lists.gentoo.org Reply-To: gentoo-project@lists.gentoo.org X-Auto-Response-Suppress: DR, RN, NRN, OOF, AutoReply MIME-Version: 1.0 References: <20200704193316.ae2d3f0fd3908036301c10c5@gentoo.org> In-Reply-To: From: Alec Warner Date: Sat, 4 Jul 2020 17:57:33 -0700 Message-ID: Subject: Re: [gentoo-project] Questions for Council candidates: Future of the Foundation To: gentoo-project Content-Type: multipart/alternative; boundary="000000000000fa2e8605a9a73e7e" X-Archives-Salt: 31b8f6be-0502-4e02-bf08-05bd56fb131e X-Archives-Hash: d9772420ed444a88d37a392ab8a100f9 --000000000000fa2e8605a9a73e7e Content-Type: text/plain; charset="UTF-8" On Sat, Jul 4, 2020 at 2:44 PM Rich Freeman wrote: > On Sat, Jul 4, 2020 at 12:33 PM Andrew Savchenko > wrote: > > > > This is one more aspect to this: some companies double donations > > for 501c3 organizations. A friend of mine works in a large > > corporation with HQ is the US and told me that his employer doubles > > any donations made to 501c3, so he made no donation for Gentoo, > > because that will mean loosing money for community which otherwise > > can be doubled. So it is likely that 501c3 will increase incoming > > donations. > > That is a really good point and I'll expand on this. > > Some organizations will only donate money to 501c3 organizations. > Basically they're letting the IRS do the due diligence around whether > the organization is actually charitable. They can potentially also > receive tax benefits this way. > > If you want to receive grants/donations from other 501c3 organizations > you will be far more likely to get them if you are yourself a 501c3 > organization. These transactions receive far less scrutiny than > transfers from 501c3s to other types of corporations. > This can be problematic for us in some cases. Currently our annual revenue is approximately 10,000 (All USD in this example.) If we are a 501c3 public charity, we are required to source 1/3rd of our revenue from the public; and the public is determined by a complex set of rules. Generally this is "donations less than 2% of gross receipts." So e.g. in our current funding model, 2% of 10,000 is 200$; and we need to gross at least 3,333$ in donations < 200$. I can tell you the Gentoo Foundation easily passes this test[0]. However, if we were to be a 501c3 and suddenly donations increased, when do we need to start worrying? For example; assume gross receipts tripled in the new system, to 30,000$. Now we need 1/3rd of this new total (10,000$) to come from donations less than 600$ (2% of 30,000$). Plugging in our 2019-2020 data, our support level here is not sufficient[1] and we will fail the public support test. Obviously the real numbers would be different but we might want to be careful in terms of how we tell people to donate and how we account for donations[2]. For example if I donate X and my employer donates X, I assume that counts as 2 donations (not 1) and we can influence the recommended value for X (e.g. we want X to be less than 2% of of expected gross revenues for that year, so it counts toward public support for the majority of donations.) The other challenge is that we have no actual plan for spending money. Feedback from the community has not been very positive when I have tried to engage with them on how to spend the money. This presents an ethical problem in terms of raising funds we have no existing need for; the existing public donations from individual contributors already exceed our expenses by a fair margin. I suspect in addition to moving to a tax-exempt non-profit we would need clearer guidance from the community on how to allocate the potential increase in revenue. -A [0] Non-exhaustively our public support is about 60% using the 2019-2020 numbers. [1] This isn't shocking, the new total is 10,000 and we don't always reach 10,000 in donation revenue..but I bring it up to demonstrate a concern that a few donors of large amounts can outpace the public support the public charity otherwise needs to operate legally. [2] This example is again meant to be demonstrative; the rules around this are nontrivial and I've simplified quite a bit for mailing list purposes. > -- > Rich > > --000000000000fa2e8605a9a73e7e Content-Type: text/html; charset="UTF-8" Content-Transfer-Encoding: quoted-printable
On Sat, Jul 4, 2020 at 2:44 PM Rich Freem= an <rich0@gentoo.org> wrote:<= br>
On Sat, Jul 4, 2020 at 12:33 PM Andrew Savchenko <bircoph@gentoo.org> wro= te:
>
> This is one more aspect to this: some companies double donations
> for 501c3 organizations. A friend of mine works in a large
> corporation with HQ is the US and told me that his employer doubles > any donations made to 501c3, so he made no donation for Gentoo,
> because that will mean loosing money for community which otherwise
> can be doubled. So it is likely that 501c3 will increase incoming
> donations.

That is a really good point and I'll expand on this.

Some organizations will only donate money to 501c3 organizations.
Basically they're letting the IRS do the due diligence around whether the organization is actually charitable.=C2=A0 They can potentially also receive tax benefits this way.

If you want to receive grants/donations from other 501c3 organizations
you will be far more likely to get them if you are yourself a 501c3
organization.=C2=A0 These transactions receive far less scrutiny than
transfers from 501c3s to other types of corporations.
=
This can be problematic for us in some cases.

=
Currently our annual revenue is approximately 10,000 (All USD in= this example.) If we are a 501c3 public charity, we are required to source= 1/3rd of our revenue from the public; and the public is determined by a co= mplex set of rules. Generally this is "donations less than 2% of gross= receipts." So e.g. in our current funding model, 2% of 10,000 is 200$= ; and we need to gross at least 3,333$ in donations < 200$. I can tell y= ou the Gentoo Foundation easily passes this test[0]. However, if we were to= be a 501c3 and suddenly donations increased, when do we need to start worr= ying?

For example; assume gross receipts tripled i= n the new system, to 30,000$. Now we need 1/3rd of this new total (10,000$)= to come from donations less than 600$ (2% of 30,000$). Plugging in our 201= 9-2020 data, our support level here is not sufficient[1] and we will fail t= he public support test. Obviously the real numbers would be different but w= e might want to be careful in terms of how we tell people to donate and how= we account for donations[2].=C2=A0

For example if= I donate X and my employer donates X, I assume that counts as 2 donations = (not 1) and we can influence the recommended value for X (e.g. we want X to= be less than 2% of of expected gross revenues for that year, so it counts = toward public support for the majority of donations.)

<= div>The other challenge is that we have no actual plan for spending money. = Feedback from the community has not been very positive when I have tried to= engage with them on how to spend the money. This presents an ethical probl= em in terms of raising funds we have no existing need for; the existing pub= lic donations from individual contributors already exceed our expenses by a= fair margin. I suspect in addition to moving to a tax-exempt non-profit we= would need clearer guidance from the community on how to allocate the pote= ntial increase in revenue.

-A

=
[0] Non-exhaustively our public support is about 60% using the 2019-20= 20 numbers.
[1] This isn't shocking, the new total is 10,000 = and we don't always reach 10,000 in donation revenue..but I bring it up= to demonstrate a concern that a few donors of large amounts can outpace th= e public support the public charity otherwise needs to operate legally.
[2] This example is again meant to be demonstrative; the rules aroun= d this are nontrivial and I've simplified quite a bit for mailing list = purposes.


--
Rich

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