On Mar 8, 2004, at 8:25 AM, Kelly Martin wrote:

Dave Neary wrote:

Daniel Rogers wrote:
Avoid self-dealing.
What's this?

Self-dealing is whenever the people who control the organization command the organization to do business with themselves in their personal capacity. Self-dealing "tears the veil" and makes the director or officer who engages in it personally liable for the corporation's debt by creating the presumption that the corporation is an "alter ego" of the individual. In the case of a non-profit, it also violates the rule against private inurement.

this is true, but it deals more directly with, as a board member, arranging a deal between The GIMP foundation and a board member. Self-dealing is when, for example, you own some property that you wish to sell to TGF and you are on TGF board. You have to do some full disclousure, follow very specific rules, and making too much money is frowned upon. Really it is not so much about avoidance (but that helps) as much as it is about following the rules. California and the US are very picky about making sure that non-profits are not used as a vehical to profit the board members.

It means, inter alia, that the directors of the non-profit cannot also receive money from it except possibly a small stipend and reimbursement of their expenses in attending board meetings and other organization functions. Being a member of the board of a non-profit organization is charity work: you generally cannot expect to get paid.

this is not true, actually. 51% of the members have to be "disinterested." It means that 51% of the board members cannot themselves or anyone related to them be paid (except the stipend and compensation you mentioned). Related, here, has a very specific definition. It means that if there are four board members, and I am getting paid to hack on gegl by TGF, then none of the other board members can get paid. It also means that if I hire my wife to do some work, then I am "interested" and no one else (or their relatives) on a four person board can get paid.

If you're looking to get a job with the GIMP Foundation, you can't also be a member of its board of directors (except as an ex-officio member, which the Executive Director typically would be). This doesn't mean that the Foundation can't hire staff, just that those staff can't be the ones making the ultimate decisions on how to spend the organization's money.

Again, this is _not_ true. More than half must be volunteer though.

Staff can recommend, but final approval of at least the general budget has to be by the volunteer board.

This bit is true, except that the board must simply be more than half volunteer.

To do otherwise risks a finding that the organization inures to the benefit of a private party, which destroys non-profit status.

There are of course, other ways to destroy non-profit status, such as getting too much regular funding from a single source.

I'm very interested in the idea of a Foundation and would love to be a part of one, but I have no expectation of it turning into a personal revenue stream.

Again, if you are a board member, you could get a job with TGF. But seeing how TGF, at this point, is not exactly handing out jobs, I would agree with this sentiment.


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