Here's yet another creative idea to protect FOSS developers. The Software Freedom Law Center has launched the Software Freedom Conservancy, which is designed to permit certain projects accepted as members, such as Wine, uClibc and BusyBox currently, to apply for and then benefit from nonprofit tax-exempt status. The Conservancy does all the onerous paperwork needed to set it up and run that way.
It does the paperwork and it provides the umbrella. It will file one tax return covering all members' projects, and it will handle the other corporate and tax issues that are associated with becoming a nonprofit and then operating as one, as well as holding project assets and managing them as the project directs. That leaves projects members free to code. It's a free service, if your project is accepted as a member.
There are a number of benefits to being a nonprofit. First, folks are more likely to donate money, because they can get a deduction at tax time. Also, there is protection from personal liability for the project. That basically means that if somebody sues you, they can't take your house if you lose. Of course, it's ultimately up to the IRS to decide who qualifies for nonprofit status, but all the necessary paperwork to apply will be provided.
This is an amazing arrangement. If you apply for nonprofit status, it's vital to keep everything just so, and it's a major time commitment with nonstop paperwork, so what the Conservancy is offering is, for those accepted as members, to take that administrative load off of you developers, because they know how to do this, and you probably don't. Here's the press release, with information on how to apply.
SOFTWARE FREEDOM LAW CENTER LAUNCHES CONSERVANCY
Software Freedom Conservancy offers nonprofit umbrella to free and open source projects
NEW YORK, April 3, 2006 – The Software Freedom Law Center (SFLC), provider of pro-bono legal services to protect and advance Free and Open Source Software (FOSS), today announced it has established the Software Freedom Conservancy to provide free financial and administrative services for a collection of FOSS projects through a single entity.
“The mission of the Conservancy is to provide free and open source software developers with all of the benefits of being a tax-exempt corporate entity without having to do any of the work of setting up and maintaining such an entity,” said Dan Ravicher, legal director for the Software Freedom Law Center and one of the initial directors of the Conservancy. “Letting projects pass off the mundane administrative burdens placed on those wishing to benefit from nonprofit status is a significant way to keep developers focused on what they do best – writing software.”
The Software Freedom Conservancy (conservancy.softwarefreedom.org) will be a fiscal sponsor for FOSS projects by providing free financial and administrative services to its members. It will provide individual developers protection from personal liability for their projects and will seek to provide participating projects with tax-exempt status, allowing them to receive tax deductible donations. The Conservancy will file a single tax return that covers each of the member’s projects and will handle other corporate and tax related issues on behalf of its members. In addition, the Conservancy can hold project assets and manage them at the discretion of the project, which removes another fiscal burden from developers who are focused on software innovation.
“We understand the importance of having our legal, financial and administration houses in order, but our focus and energy needs to be on our code,” said Alexandre Julliard, The Wine Project, one of the Conservancy's initial members. “The Software Freedom Conservancy gives us the opportunity to join with fellow community projects to gain needed legal and fiscal protections in a market where disruptive technologies such as open source software sometimes generate aggressive actions from other market participants.”
Other initial members of the Conservancy include SurveyOS, BusyBox and uClibc. For more information about the Conservancy and how to become a member, please visit conservancy.softwarefreedom.org.
About The Software Freedom Law Center
The Software Freedom Law Center – directed by Eben Moglen, one of the world’s leading experts on copyright law as applied to software – provides legal representation and other law-related services to protect and advance Free and Open Source Software. The Law Center is dedicated to assisting nonprofit open source developers and projects. The Conservancy is an example of how the Center is working to address the needs of FOSS projects that are playing significant roles in the software market. For criteria on eligibility and to apply for assistance from SFLC, please visit the website at www.softwarefreedom.org.