[OPEN-ILS-GENERAL] Details of fiscal sponsorship agreement for Evergreen & Conservancy

[Sharp, Chris]

> There has been some recent discussion about those rules of
> governance on the Evergreen-Governance mailing list; I'm hoping that
> that discussion will be brought back over to the Evergreen-General
> mailing list soon, as both of these matters are of great significance
> to the future of the Evergreen community.

I have set the archives of the Evergreen-Governance-L mailing list to be publicly accessible here:

http://list.georgialibraries.org/pipermail/evergreen-governance-l/

To be clear, (and I'm saying this to the community as a whole, not necessarily to you, Dan) the goal has never been to be a "closed" or "exclusive" group, but to keep communication at a manageable level.  I realize that the effect has been that it seems opaque - just know that our goals have been around fair representation of all stakeholders while keeping the group at a manageable size.

Chris Sharp
PINES Program Manager
Georgia Public Library Service
1800 Century Place, Suite 150
Atlanta, Georgia 30345
(404) 235-7147
csharp at georgialibraries.org
http://pines.georgialibraries.org/

----- Original Message -----
> From: "Dan Scott" <dan at coffeecode.net>
> To: open-ils-general at list.georgialibraries.org
> Sent: Thursday, October 21, 2010 5:00:00 PM
> Subject: [OPEN-ILS-GENERAL] Details of fiscal sponsorship agreement for Evergreen & Conservancy
> Please find below the explanation of and attached PDF & Tex documents
> concerning the Evergreen / Software Freedom Conservancy agreement that
> we will need to sign in order to move forward with establishing the
> Evergreen Software Foundation as a member project of the Software
> Freedom Conservancy.
> 
> In recognition of Bradley's time, I recommend that we discuss the
> agreement on the list, and compile a list of questions that come up
> during the course of the discussion. Perhaps we can try to pull
> together
> any major questions by the end of next week (Friday, October 28th)?
> 
> A major corollary to the agreement with the Software Freedom
> Conservancy
> is the proposed rules of governance for the Evergreen Software
> Foundation. There has been some recent discussion about those rules of
> governance on the Evergreen-Governance mailing list; I'm hoping that
> that discussion will be brought back over to the Evergreen-General
> mailing list soon, as both of these matters are of great significance
> to
> the future of the Evergreen community.
> 
> Dan
> 
> ----- Forwarded message from "Bradley M. Kuhn"
> <bkuhn at sfconservancy.org> -----
> 
> Date: Thu, 21 Oct 2010 08:32:17 -0700
> From: "Bradley M. Kuhn" <bkuhn at sfconservancy.org>
> To: Dan Scott <dan at coffeecode.net>
> Subject: Details of fiscal sponsorship agreement for Evergreen &
> Conservancy
> User-Agent: Gnus/5.13 (Gnus v5.13) Emacs/23.1 (gnu/linux)
> 
> I'm glad that you are considering joining the Conservancy and I am
> pleased to extend an invitation to Evergreen. Attached is a draft of
> the fiscal sponsorship agreement that representatives of Evergreen
> will
> need to sign in order to join the Conservancy. (Both LaTeX source and
> PDF are included.) Please read this agreement and share and discuss it
> with all of the key people involved in Evergreen.
> 
> As mentioned in my previous email, generally, we leave it for the
> Evergreen community to decide how you'd like to discuss the document,
> as
> signing such an agreement is a big step for the project and you should
> consider the agreement in whatever forum is most appropriate for your
> community. I'm happy to answer questions from the community as you
> consider the document, and you should feel comfortable cc'ing me on
> any
> threads you think I should comment on. (However, before doing so,
> please make sure I can post back to any lists included in the Cc
> without
> being formally subscribed.) Meanwhile, you are also welcome to batch
> questions into one group as well and email them to me directly, and
> just
> repost my responses. Basically, whatever works well for you works fine
> for me.
> 
> I strongly suggest that you share the agreement draft as wide as
> possible throughout the community, and make sure anyone who has ever
> been a serious contributor to the project in the past or currently is
> made aware of your plans to join Conservancy. We very much rely on you
> to make sure that your entire community is in agreement with joining
> Conservancy, so please make efforts to be sure everyone has had their
> say.
> 
> 
> Regarding the agreement, some of the more complex provisions of the
> agreement reflect the special considerations necessary to support the
> Conservancy's tax exempt status. However, on the whole, I believe that
> this agreement fairly and clearly sets out an advantageous
> relationship
> for the Conservancy's member projects. As some of the paragraphs
> specifically indicate, the agreement can be tailored to reflect
> Evergreen's particular needs. To help you in your review, below is a
> section-by-section walk through, giving an explanation of the
> significance of each provision. If there are any sections that seem
> confusing or that you feel should be changed to reflect Evergreen's
> needs, please let me know and we can discuss them.
> 
> 
> Introductory Paragraph
> 
> This paragraph identifies the parties to the contract. It's more
> thoroughly explained in paragraph 6, but the point of this paragraph
> is
> to name the people who sign the agreement.
> 
> Recitals (the "WHEREAS" section)
> 
> These paragraphs set forth the basic understandings of the parties.
> Similar to the "preamble" found in the GPL and other Free Software
> licenses, these are *not* operative provisions of the document.
> Instead, they give the context of the agreement.
> 
> In this specific case, the key points of understanding are that the
> purpose of Evergreen is to forward Free, Libre and Open Source
> Software
> (FLOSS) and that both the Conservancy and Evergreen want Evergreen to
> join the Conservancy. The Conservancy's mission (and charitable
> purpose) is to advance only FLOSS development, documentation, and
> usage,
> so it is important that this context be stated clearly.
> 
> Paragraph 1 - Term of Agreement
> 
> This paragraph says that Evergreen is part of the Conservancy as of
> the
> signing date of the agreement. It cross references the terminations
> provisions in paragraph 7 (which is explained in greater detail
> below).
> Note, though, that Evergreen can choose to leave the Conservancy at
> any
> time.
> 
> Paragraph 2 - Project Management and Activities
> 
> a) Both parties agree that Evergreen will be FLOSS. As noted above,
> this is the fundamental goal and charitable purpose of the
> Conservancy. The Conservancy will not and cannot sponsor proprietary
> projects.
> 
> b) This clearly sets out the limits of the Conservancy's management
> over
> Evergreen. Due to requirements connected to Conservancy's tax exempt
> status, the ultimate legal control of the projects must be with the
> Conservancy. From the IRS's perspective, the projects are part of
> the Conservancy, and the purpose of its tax exemption is to forward
> the FLOSS mission of those projects.
> 
> However, the Conservancy does not want to interfere with the
> successful software development, documentation and advocacy work
> already underway in member projects; such activity should continue
> after the agreement without interruption or interference. This
> paragraph delegates some of Conservancy's legal authority back to the
> developers, so that Evergreen can run itself in day-to-day matters.
> 
> The only limitations that we must place are to prevent Evergreen from
> producing non-free software (as per Conservancy's charitable purpose)
> and from spending money or conducting activities that would
> jeopardize the Conservancy's tax exempt status. All the ordinary
> activities of FLOSS projects come well within these limitations.
> Some specific activities that are restricted include lobbying
> activities and spending money in ways other than consistent with the
> charitable purposes of the Conservancy (i.e., forwarding FOSS).
> 
> Note that developers of Evergreen in their capacity as individuals
> (when not representing Evergreen still may engage in for-profit
> service businesses related to their FLOSS work. The work of
> Evergreen itself must fit the guidelines, but individuals are free to
> act in their own capacity in other endeavors, as long as they clearly
> state that they are not acting on behalf of the project when they do
> so.
> 
> If you are ever concerned that a particular activity -- be it one
> carried out for Evergreen or one that an individual developer engaged
> in independently -- might be a problem, you can always ask the
> Conservancy for clarification.
> 
> c) As discussed above in (b), this section describes the corporate
> relationship of the project and the Conservancy. For clarity, it
> refers to section (b), which delegates the actual management of
> Evergreen to the relevant developers. Conservancy, when acting as a
> fiscal sponsor, must have the legal authority to manage Evergreen
> even though section (b) delegates the day-to-day operations to the
> developers.
> 
> d) This section clarifies that Evergreen can't represent the
> Conservancy
> without getting written authorization first. If you'd like to
> represent the Conservancy at a conference or other such event, you
> can always talk to us about it.
> 
> Paragraph 3 - No Fees
> 
> It's just as it sounds. The Conservancy provides services to projects
> to benefit the FLOSS community and does demand member projects to bear
> the overhead costs. Projects are encouraged to make donations to the
> Conservancy as a percentage of their funds to assist the Conservancy
> with its operating expenses. Please note, though, that Conservancy is
> only able to provide its services to member projects because there is
> a
> reasonably healthy general fund available. Donations from our member
> projects are not the only source of general fund revenue, but it is a
> substantial component in Conservancy' sustainability plan.
> 
> Therefore, if you choose to do so, this section provides suggested
> wording in brackets for donating a percentage of the Project's income
> to
> be used towards keeping the Conservancy up and running (10% is a very
> common rate that many umbrella organizations require for their fiscal
> sponsorship services).
> 
> Paragraph 4 - Project Fund/Variance Power
> 
> This sets out the financial structure in connection with the
> relationship described above in paragraph 2. Conservancy will
> separately
> account for Evergreen's revenue (and Evergreen will have its own bank
> account at the Conservancy once its balance reaches $3,500). For tax
> purposes, Conservancy will report all of the income to Evergreen in
> its
> IRS and state filings. Evergreen therefore will not need to file any
> separate tax documents with the IRS. Conservancy will keep the
> financial books for Evergreen, sending periodic reports to the
> project's
> developers.
> 
> The developers will direct the Conservancy to spend the money on
> behalf
> of Evergreen within the limitations imposed by the tax laws and
> Conservancy's 501(c)(3) mission. Conservancy will receive any checks
> on
> behalf of Evergreen, and it will also write checks on behalf of
> Evergreen.
> 
> Paragraph 5 - Project Fund Management/Performance of Charitable
> Purposes
> 
> This paragraph clarifies that all assets will be devoted to the
> project's purposes, as those purposes are a subset of the
> Conservancy's
> purposes. Assets cannot be used in connection with activities that
> would jeopardize the Conservancy's tax exempt status. As discussed
> above, in practice, most typical expenses of FLOSS projects will come
> well within these limitations. Activities that are restricted include
> lobbying activities and spending money in ways other than consistent
> with the charitable purposes of Conservancy (i.e., forwarding FLOSS).
> 
> Paragraph 6 - Representation of the Project in the Conservancy
> 
> As the note in this section indicates, we understand that each project
> will have its own management structure that it has developed to
> reflect
> its size and community. This paragraph requires that certain
> representatives be named as the individuals that can officially
> communicate decisions on behalf of Evergreen. This can be a single
> maintainer, a committee of developers or a few specified
> representatives.
> 
> To the extent that it makes sense for Evergreen to have a committee of
> representatives, we should indicate how decisions can be made by that
> committee. For example, should all decisions be communicated to the
> Conservancy by all members of the committee or would a simple majority
> suffice? Can any one representative communicate official decisions on
> behalf of all? Evergreen should also consider adding a mechanism here
> for adding and removing representatives over time. We're happy to
> discuss methods that have worked for other projects with you to help
> you
> select the solution that is right for you.
> 
> We generally find this is the most difficult provisions for projects
> to
> work out, as it does require that your project consider the form and
> type of leadership structure it wants to have, and that structure will
> be legally formalized in this document for perpetuity.
> 
> Paragraph 7 - Outstanding Liabilities
> 
> In this section, Evergreen confirms that it has told the Conservancy
> about any liabilities that might be outstanding prior to joining the
> Conservancy. This gives the Conservancy some assurance that its due
> diligence process has been complete and that the Conservancy's Board
> received all of the information it needed to properly evaluate the
> project. Liabilities include, for example, financial obligations, such
> as any debts or outstanding bills, or any legal claims that could be
> outstanding against Evergreen.
> 
> If you believe some liabilities exist, or that something may be a
> liability and aren't sure, please err on the side of letting
> Conservancy
> know about it.
> 
> Paragraph 8 - Termination
> 
> Projects can leave Conservancy at will. This section sets out the
> mechanisms for termination to make sure that when a project leaves the
> Conservancy it does so without jeopardizing the tax exempt status of
> the
> Conservancy (and, consequently, the status of all of the other
> projects
> in the Conservancy).
> 
> There is a 60 day notice requirement so that a new tax exempt
> non-profit
> can be found for Evergreen to join. If there isn't another fiscal
> sponsor or other tax exempt non-profit to take over Evergreen,
> Evergreen
> can incorporate as a separate entity and apply for tax exemption
> recognition. If there is no separate entity -- for example if a
> project
> loses momentum and has been abandoned by its developers -- the
> Conservancy must be left with the assets for use by the Conservancy
> for
> other FLOSS-related charitable work.
> 
> These restrictions would also apply to any separate tax exempt entity,
> so if Evergreen were to incorporate and achieve tax exemption outside
> of
> Conservancy, it would have to deal with the same considerations upon
> any
> wind-up or distribution of assets. Members of the Conservancy's board
> are familiar with non-profit wind-down situations, and can assist in
> the
> unlikely event that this unfortunate outcome occurs.
> 
> Paragraph 9 - Miscellaneous
> 
> These provisions are standard agreement boilerplate - they clarify the
> enforceability of separate provisions, specify that the contract be
> governed by New York Law and state that any amendments to this
> agreement
> need to be agreed to in writing by all of the parties.
> 
> Paragraph 10 - Counterparts/Facsimile
> 
> Although it's good to have original signatures in the corporate
> records,
> this allows you to simply scan a copy for the contract to take effect.
> 
> 
> We hope this explanation document has made it clear why the agreement
> is
> structured in this way. If any provisions seem problematic to you, let
> us know and we'll work with you to try to build an agreement that
> works
> for both of us. We look forward to Evergreen joining the Conservancy!
> 
> 
> --
> Bradley M. Kuhn, Executive Director, Software Freedom Conservancy