[ZF] Why is non-profit status important?

[Jim Fulton]

On Fri, Feb 10, 2012 at 11:09 AM, Tres Seaver <tseaver at palladion.com> wrote:
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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.

In that case, I really see no point in non-profit status.

>
> 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.

Wow.  Well, if the board enjoys dealing with the IRS ;) ...
this appears to be recreational.

Jim

-- 
Jim Fulton
http://www.linkedin.com/in/jimfulton