[ZF] Why is non-profit status important?

[Tres Seaver]

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On 02/10/2012 10:46 AM, Benji York wrote:
> On Fri, Feb 10, 2012 at 10:21 AM, Jim Fulton <jim at zope.com> wrote:
>> On Fri, Feb 10, 2012 at 9:14 AM, Jim Fulton <jim at zope.com> wrote:
>>> Aroldo's note prompts me to ask: Why is non-profit status so
>>> important?
>>> 
>>> Do we think the amount of contributions would be substantially 
>>> different if the Foundation was non-profit? I'm skeptical.
>>> 
>>> Given that the board members are all busy, pursuing non-profit 
>>> status seems like a waste of time.
>> 
>> Note:
>> 
>> - Rob Page pointed out to me in person that without non-profit 
>> status, any Foundation Income in excess of expenses is taxed. I
>> don't know if this is an issue, but I still doubt it's worth
>> worrying about.
> 
> That's a good point.
> 
> Is it not already paying taxes because it's for-profit at this time? 
> There's been at least one tax year to end since the ZF was created, I 
> suppose it payed taxes then.  We can use that as a measure of how
> much being for-profit would hurt.

AFAIK, the foundation hasn't shown a profit after that first year (2006):
 we are still operating on the "cushion" of the original
"consoritum"-level dues paid by ZC and a couple of others (Nuxeo?)
Current revenues from sponsor members ($399 each annually) don't exceed
our hosting costs.

We started the process of obtaining 501-c3 status, and need to determine
what our actual status is with the IRS.  I am currently waiting on scans
of some hardcopy correspondence with the IRS about this status (the
treasurer is out of the country until next week).  Based on what we find
there, I expect that the board will either decide to table the issue
indefinitely (if the IRS issued a final decision), or else try to
complete the process.


Tres.
- -- 
===================================================================
Tres Seaver          +1 540-429-0999          tseaver at palladion.com
Palladion Software   "Excellence by Design"    http://palladion.com
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