Foundation:FoundationFutureState

Current Status: Gentoo is a non-profit organization based in New Mexico. We do not currently hold tax exemption status with the United States Internal Revenue Service (IRS).

TYPES of direction: recognize we're a business; 501{c3,c6} {public,private foundation,umbrella}; [7 directions total] -- cover pros, cons of each -- for the umbrellas, identify list of potential umbrellas for each category, and their pros/cons & COSTS

Current Status: Gentoo is a non-profit organization based in New Mexico. We do not currently hold tax exemption status with the United States Internal Revenue Service (IRS).

Goals
Our goal should remain the same as our mission statement which can be derived from our social contract. Please feel free to edit. This will also be useful for our mission statement as a potentially new 501cX or under an umbrella.

"To promote the advancement of free knowledge and Free and Open Source Software (FOSS) through the primary vehicle of the meta-distribution known as Gentoo. These goals are accomplished through relationships with free software authors, technical contributions to external projects, and a thriving community of volunteers that make Gentoo possible."

Assets
[Insert financial assets or link to external page]

Trademarks

 * TODO: link Foundation page on 2 trademarks

Cash & securities

 * TODO: link latest financial statements

Tangible assets

 * TODO: Infrastructure to produce clear documentation on hardware OWNED by the Foundation (vs sponsored hardware)

Possible types of direction
This section should cover what types of direction we might go in future, without specific target orgs.

Each of the directions should briefly capture:
 * Pros & Cons
 * Reasons to consider
 * Reasons to exclude from consideration
 * Ballpark transition costs
 * Possible transitions
 * Some state transitions are easier/harder/legally-prohibited
 * Impact on governance structure

Pros
1.) The corporation will be governed by an elected body chosen by the Gentoo community which retains it's autonomy. As stated at [1], "Gentoo will never be reigned by a company nor be dictated by an organization."

2.) The corporation may, at-will, contract the required services (e.g. bookkeeping/taxes) as needed to ensure compliance with all United States tax laws.

3.) By retaining services at-will, the corporation may lower overhead costs by selecting among various companies.

Cons
1.) The elected body must continue to deal with the financial and legal matters of the distribution (c.f. Pros 2).

1a.) Historically, there has been a low turnout of nominations for individuals to be considered for election to the board. This may be evident of the technically driven nature of most contributors/volunteers or simply because individuals were hesitant due to the dire tax situation that preceded.

2.) The lack of retained certified legal experts to advise should any potential lawsuits or other legal matters impact the distribution. 2a.) This has historically not been an issue, but threats have been made from disgruntled individuals.

3.) The corporation must ensure that the public support test is met. Currently, there is one donor that has been faithful in their donations which would break the public support test. However, such contributions can be denied (or a request to spread over multiple years) in order to meet such criteria [5] (among other articles available).

Umbrella: 501(3)c

 * E.g. SFC

Pros
1.) The umbrella would manage all tax and bookkeeping related matters while ensuring compliance as a tax-exempt non-profit organization under United States law.

2.) The umbrella, as a broader set of non-profits, would allow for larger contributions while generally meeting the public support test (c.f. 501c3 Cons 3)

Cons
1.) The general electorate is dismissed and the distribution loses its autonomy. As such, interested parties must join the respective umbrella to influence (through voting or other measures) policy (e.g. licensing) and any other relevant legal or financial matters (note: this does not impact Gentoo's earmarked contributions).

2.) Umbrellas differ in the rates charged for sponsoring a project. Some may charge a flat rate (e.g. 10%) or may charge a monthly or annual fee. Fixed percentages may eventually cost more than retained services dependent on contributions while monthly/annual costs are predictable and recurring.

Umbrella: 501(6)c

 * E.g. Linux Foundation

Combinations
Combination options certainly exist, and are captured for completeness, but given the relative sizes, they are probably unlikely options.

501(c)3 + business

 * Mozilla Foundation 501(c)3 & Mozilla Corporation: the corporation was entirely owned by the 501(c)3.

Dissolve everything
Just donate everything we have and give up.

Possible umbrellas
For the umbrellas:
 * identify list of potential umbrellas for each category
 * Capture:
 * Pros
 * Cons
 * Costs
 * Governance structures

SFC

 * Pros:
 * Cons:
 * Costs:
 * 10% of gross income?
 * Governance:
 * See the representation section in https://sfconservancy.org/docs/sponsorship-agreement-template.pdf
 * The representation section contains multiple examples of possible structures
 * See the representation section in https://sfconservancy.org/docs/sponsorship-agreement-template.pdf
 * The representation section contains multiple examples of possible structures

Linux Foundation

 * Notes:
 * This would lead the Gentoo Foundation to being a Directed Fund under Linux Foundation, much like the Ceph Foundation
 * See example at Linux Foundation Networking Participation Agreement
 * Pros:
 * Cons:
 * Costs:
 * Per document above: "A General & Administrative (G&A) fee will be applied by the Linux Foundation to funds raised to cover Finance, Accounting, and operations. The G&A fee will be 9% of the Directed Fund’s first $1,000,000 of gross receipts each year and 6% of the Directed Fund’s gross receipts each year over $1,000,000."
 * Governance:
 * Per document above: "A General & Administrative (G&A) fee will be applied by the Linux Foundation to funds raised to cover Finance, Accounting, and operations. The G&A fee will be 9% of the Directed Fund’s first $1,000,000 of gross receipts each year and 6% of the Directed Fund’s gross receipts each year over $1,000,000."
 * Governance:

Open Collective
Open Collective is primarily a PLATFORM for running finances. It has individual fiscal host collectives, which set their own policies. SFC believes this is a good thing to have more choice: https://sfconservancy.org/blog/2020/jul/09/org-proliferation/

Starting a new collective

 * TODO

Joining an existing collective

 * https://opencollective.com/pricing?tab=singleCollectiveWithoutAccount
 * https://docs.opencollective.com/help/internal/host-admin-manual#docs-internal-guid-c63aa181-7fff-a12b-956a-0e66ccc70b1b - Fiscal Hosts List
 * Open Source Collective 501(c)(6)
 * Open Collective Host c-corp
 * Open Collective Foundation 501(c)(3)
 * Open Collective Europe
 * Costs:
 * Fees to OpenCollective: $10/month + credit card donations (5% + 3-5% merchant fees)
 * Fees to Fiscal Host: 5% gross income

TODO

 * Please add more potential umbrellas to evaluate here.

Common application process
The Foundation & Council should have an agreed text to applying to Umbrellas initially with.


 * Bug 736760 Captures the text used for initial application to the SFC

Status
The Foundation has sent out initial communications to several entities.

SFC

 * Emailed 2020/08/17
 * Reping on 2020/08/16
 * No email response as of 2020/09/16
 * Reached out on IRC 2020/09/16
 * Promised initial email response within the week to explain that the applying page was out of date regarding timelines.
 * 2020/09/22 email:
 * Subject: Re: Information Conservancy needs regarding Gentoo application [sfconservancy.org #12273]
 * Visible to council & trustees
 * Summary: SFC surprised to get inquiry after so long, as apparently mcummings and g2boojum started a process with last email on 2007/09/28, but never submitted anything, and knowledge of the application was lost to the rest of the Foundation. We can make a new application, but a lot of documentation is needed, and Bradley Kuhn feels that the liability of a Linux distribution joining the SFC means they are unlikely to accept us (none of their present projects are Linux distributions)
 * Required documents for application:
 * Certificate of Incorporation (or analogous document for your org)
 * Existing By-Laws for the Organization
 * List of Directors (and historical list of previous directors, if available)
 * List of Officers (and historical list of previous officers, if available)
 * Minutes from all Board meetings for the last three years
 * All Board Resolutions passed by the Directors
 * Membership meeting minutes (if your organization is a membership organization)
 * All Membership Resolutions (if your organization is a membership organization)
 * All annual reports (published, or filed with any state or federal agency)
 * All audited annual finanicals (if any were audited and/or filed)
 * All financial reports of any kind for the last three years
 * Copy of all state and/or federal filings (particularly including but not limited to tax-related filings) for the last three years. In particular, be sure to include:
 * the IRS determination letter for the status of your filing
 * Your IRS Form 1023 filing
 * List of any ongoing threats of litigation, or other disputes, and documentation of any resolved past litigation
 * A list of all assets currently held by the organization (including backup documentation, such as copy of bank statements, etc.)
 * Include a copy of *all* bank statements for the last year
 * Any contracts that the organization has executed in the last three years (plus any older than that if they remain active)
 * A list of any outstanding loans, leans, or other debts held by the Organization

SPI

 * Emailed 2020/08/xx
 * Reached out on IRC 2020/09/16
 * Initial email response 2020/09/16

Open Source Collective

 * Emailed 2020/0x/xx

Linux Foundation

 * Emailed 2021/02/06
 * Video Call Meeting with GF 2021/03/16
 * Questions emailed 2021/03/22

Common Q&A
This section serves to collect common followup questions that Gentoo asks of potential umbrellas, or that Umbrellas ask of Gentoo.

Interactions
How does the Umbrella interact with Gentoo? e.g. Does it require a single person as a liaison, or is a small group acceptable?

Costs
Different Umbrellas state that they take various amounts of Income as their fee, but it's not always clear exactly where that amount is charged.


 * Does the Umbrella charge the same fee for the initial balance that would be moved into the Umbrella vs later income after we have joined?
 * Exactly where is the Umbrella's fee charged? gross income, net income, something else?
 * How are fees and taxes on unrelated business income handled? Gentoo has the official CafePress store. However, since selling shirts & merchandise is not core to Gentoo's function, the IRS may consider it as unrelated business income, and apply standard taxes on that income.
 * Is the amount of taxes set aside before the umbrella's fee is calculated?

Licenses

 * Q: The SPI asked about Gentoo's Committment to open source.
 * A: All Gentoo work is required to be under an OSI-approved license per the Gentoo Social Contract

Links
[1]: https://sfconservancy.org/news/2020/may/18/ClojuristsSunset/ (Example of org leaving umbrella)

[2]: https://sfconservancy.org/news/2019/jun/13/welcomerosanne/ (Staff using FOSS for accounting)

[3]: https://sfconservancy.org/blog/2020/jul/09/org-proliferation/ (Overview of various initiatives)

[4]: https://wiki.gentoo.org/wiki/Foundation:Main_Page

[5]: https://www.themuse.com/advice/3-times-when-you-should-turn-down-a-donation-really

[6]: https://opensource.org/node/840 ( needs to be referenced above still )

[7]: https://blogs.gnome.org/jnelson/2014/06/30/the-new-501c3-and-the-future-of-free-software-in-the-united-states/ ( needs to be referenced above still )