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The case for formal LUG organisation can be debated:
Pro: Incorporation and recognised tax-exemption limits
liability and helps the group carry insurance. It aids fundraising.
It avoids claims for tax on group income.
Con: Liability shouldn't be a problem for modestly careful
people. (You're not doing skydiving, after all.) Fundraising isn't needed
for a group whose activities needn't involve significant expenses.
(Dead-tree newsletters are so 1980.) Not needing a treasury, you avoid
needing to argue over it, file reports about it, or fear it being taxed
away. Meeting space can usually be gotten for free at ISPs, colleges,
pizza parlours, brewpubs, coffeehouses, computer-training firms,
Linux-oriented companies, or other friendly institutions, and can
therefore be free of charge to the public. No revenues and no expenses
means less need for organisation and concomitant hassles.
For whatever it's worth, this HOWTO's originator and second maintainer lean,
respectively, towards the pro and con sides of the debate -- but choose
your own poison: If interested in formally organising your LUG, this
section will introduce you to some relevant issues.
Note: this section should not be construed as competent legal
counsel. These issues require the expertise of competent legal
counsel; you should, before acting on any of the statements made in
this section, consult an attorney.
United States of America
There are at least two different legal statuses a LUG in the USA may
attain:
- incorporation as a non-profit entity
- tax-exemption
Although relevant statutes differ among states, most states
allow user groups to incorporate as non-profit entities. Benefits
of incorporation for a LUG include limitations of liability
of LUG members and volunteers, as well as limitation or even exemption
from state corporate franchise taxes.
While you should consult competent legal counsel before incorporating
your LUG as a non-profit, you can probably reduce your legal
fees by being acquainted with relevant issues before consulting
with an attorney. I recommend the Non-Lawyers' Non-Profit
Corporation Kit (ISBN 0-937434-35-3).
As for the second status, tax-exemption, this is not a legal status, so
much as an Internal Revenue Service judgement. It's important to realise
non-profit incorporation does not ensure that IRS will rule
your LUG tax-exempt. It is quite possible for a non-profit corporation
to not be tax-exempt.
IRS has a relatively simple document explaining the criteria
and process for tax-exemption. It is Publication 557:
Tax-Exempt Status for Your Organization, available as
an Acrobat file from the IRS's Web site. I strongly recommend
you read this document before filing for non-profit incorporation.
While becoming a non-profit corporation cannot
ensure your LUG will be declared tax-exempt, some
incorporation methods will prevent IRS from declaring your
LUG tax-exempt. Tax-Exempt Status for Your Organization
clearly sets out necessary conditions for your LUG to be declared
tax-exempt.
Finally, there are resources available on the Internet for non-profit
and tax-exempt organisations. Some of the material is probably
relevant to your LUG.
Canada
Thanks to
Chris Browne
for the following comments about the Canadian situation.
The Canadian tax environment strongly parallels the US environment, in
that the "charitable organisation" status confers similar tax
advantages for donors over mere "not for profit" status, while
requiring that similar sorts of added paperwork be filed by the
"charity" with the tax authorities in order to attain and maintain
certified charity status.
Germany
Correspondent
Thomas Kappler warns that the process of founding a non-profit entity in Germany
is a bit complicated, but comprehensively covered at
http://www.wegweiser-buergergesellschaft.de/praxishilfen/arbeit_im_verein/vereinsrecht/vereinsgruendung_1.php.
Bootlegging
As a reminder, it's vital that offers or requests to copy
distribution-restricted proprietary software of any sort be heavily
discouraged anywhere in LUGs, and banned as off-topic from all Linux user
group on-line forums. This is not generally even an issue -- much less
so than among proprietary-OS users -- but (e.g.) one LUG of my
acquaintance briefly used a single LUG-owned copy of PowerQuest's
Partition Magic on all NTFS-formatted machines brought to its
installfests for dual-boot Linux installation, on a very dubious theory
of legality.
If it smells unlawful, it almost certainly is. Beware.
Antitrust
It's healthy to discuss the Linux consulting business in general in user
group forums, but for antitrust legal reasons it's a bad idea to get into
"How much do you charge to do [foo]" discussions, there.
Chris Browne has the
following to say about the kinds of intra-LUG political dynamics that
often crop up (lightly edited and expanded by the HOWTO maintainer):
People have different feelings about free / open-source software
Linux users are a diverse bunch. As soon as you try to put a lot of
them together, some problem issues can arise. Some, who are
nearly political radicals, believe all software, always, should be
"free". Because Caldera charges quite a lot of money for its
distribution, and doesn't give all profits over to (pick favorite
advocacy organisation), it must be "evil". Ditto Red Hat or
SuSE. Keep in mind that all three of these companies have made and
continue to make significant contributions to free / open-source software.
(HOWTO maintainer's note: The above was a 1998 note, from before
Caldera exited the Linux business, renamed itself to The SCO Group,
Inc., and launched a major copyright / contract / patent / trade-secret
lawsuit and PR campaign against Linux users. My, those times do change.
Still, we're grateful to the Caldera Systems that was , for
its gracious donation of hardware to help Alan Cox develop SMP kernel
support, for funding the development of RPM, and for its extensive past
kernel source contributions and work to combine the Linux and historical
Unix codebases.)
Others may figure they can find some way to highly exploit the
"freeness" of the Linux platform for fun and profit. Be aware that many
users of the BSD Unix variants consider their licences that
do permit companies to build "privatised" custom versions of
their kernels and C libraries preferable to the "enforced permanent
freeness" of the GPL as applied to the Linux kernel and GNU libc. Do
not presume that all people promoting this sort of view are necessarily
greedy leeches.
If/when these people gather, disagreements can occur.
Leaders should be clear on the following facts:
- There are a lot of opinions about the GPL and other open-source
licences and how they work -- mostly misinformed. It is easy to
misunderstand both the GPL and alternative licensing schemes. Most
attempts at debating same are, at root, pointless, ritualised symbolic
warfare among people who should know better. In the rare event that
participants actually aspire to understand the subject, please direct
them to the OSI's "license-discuss" mailing list and the Debian
Project's "debian-legal" mailing list, where substantive analysis is
possible and encouraged.
- Linux benefits from contributions from many places, including
proprietary-software vendors, e.g., in the Linux kernel, XFree86, and
gcc.
- Proprietary implies neither better nor horrible.
The main principle can be extended well beyond this; computer "holy
wars" have long been waged over endless battlegrounds, including
Linux vs. other Unix variants vs. Microsoft OSes, the "IBM PC" vs.
sundry Motorola 68000-based systems, the 1970s' varied 8-bit systems
against each other, KDE versus GNOME....
A wise LUG leader will seek to move past such differences, if only
because they're tedious. LUG leaders ideally therefore will have thick
skins.
Non-profit organisations and money don't mix terribly well.
It is important to be careful with finances in any sort of non-profit.
In businesses, which focus on substantive profit, people are not
typically too worried about minor details such as alleged misspending of
immaterial sums. The same cannot be said of non-profit
organisations. Some people are involved for reasons of principle, and
devote inordinate attention to otherwise minor issues, an example of C.
Northcote Parkinson's
Bike Shed Effect. LUG business
meetings' potential for wide participation correspondingly expands the
potential for exactly such inordinate attention.
As a result, it is probably preferable for there to not be any
LUG membership fee, as that provides a specific thing for which people
can reasonably demand accountability. Fees not collected can't be
misused -- or squabbled over.
If there is a lot of money and/or other substantive property,
the user group must be accountable to members.
Any vital, growing group should have more than one active person. In
troubled nonprofits, financial information is often tightly held by
someone who will not willingly relinquish monetary control. Ideally,
there should be some LUG duty rotation, including duties
involving financial control.
Regular useful financial reports should be made available to those
who wish them. A LUG maintaining official "charitable status"
for tax purposes must file at least annual financial reports
with the local tax authorities, which would represent a minimum
financial disclosure to members.
With the growth of Linux-based financial software, regular reports are
now quite practical. With the growth of the Internet, it should even be
possible to publish these on the World-Wide Web.
Governing your LUG democratically is absolutely vital -- if and
only if you believe it is. I intend that remark somewhat less cynically
than it probably sounds, as I shall explain.
Tangible stakes at issue in LUG politics tend to be minuscule to the point of
comic opera: There are typically no real assets. Differences of view
can be resolved by either engineering around them with technology (the Linux-ey
solution) or by letting each camp run efforts in parallel. Moreover, even the
most militantly "democratic" LUGs typically field, like clockwork,
exactly as many candidates as there are offices to be filled -- not a
soul more.
It's tempting to mock such exercises as empty posturing, but such
is not (much) my intent. Rather, I
mention them to point out something more significant: Attracting and
retaining key volunteers is vital to the group's success. Anything that
makes that happen is good. It seems likely that the
"democratic" exercise stressed in some groups, substantive or not,
encourages participation, and gives those elected a sense of status,
legitimacy, and involvement. Those are Good Things.
Thus, if elections and formal structure help attract key
participants, use them. If those deter participants,
lose them. If door-prizes and garage sales bring people in, do
door-prizes and garage sales. Participation, as much as software, is
the lifeblood of your LUG.
The reason I spoke of "key" volunteers, above, is because, inevitably, a
very few people will do almost all of the needed work. It's just the
way things go, in volunteer groups. An anecdote may help illustrate my
point: Towards the end of my long tenure as editor and typesetter of
San Francisco PC User Group's 40-page monthly magazine, I was repeatedly
urged to make magazine management more "democratic". I finally replied
to the club president, "See that guy over there? That's Ed, one of my
editorial staff. Ed just proofread twelve articles for the current
issue. So, I figure he gets twelve votes." The president and other
club politicos were dismayed by my work-based recasting of their
democratic ideals: Their notion was that each biped should have an equal
say in editorial policy, regardless of ability to typeset or proofread,
or whether they had ever done anything to assist magazine
production. Although he looked quite unhappy about doing so, the
president dropped the subject. I figured that, when it came right down
to it, he'd decide that the club needed people who got work done more
than they needed his brand of "democracy".
But we weren't quite done: A month or so later, I was introduced to a
"Publications Committee", who arrived with the intent of doing nothing but
vote on matters of newsletter policy (i.e., issue "executive" orders to the
volunteer production staff). Their first shock came when I listened politely
to their advice but then applied my editorial judgement as usual. Much
worse, though: I also assigned them work, as part of my staff. Almost
all immediately lost interest. (Bossing around other people seemed likely
to be fun; doing actual work was not.)
The point is that the widespread urge to vote on everything is at best
orthogonal to any desire to perform needed work; at worst, the former
serves as an excuse to compulsively meddle in others' performance
of the latter.
To sum up: Have all the "democracy" that makes you happy, but watching after
the well-being of your key volunteers is what matters. (To quote Candide,
"We must cultivate our garden.")
Last, plan for your replacement: If your LUG is a college student
group, and must go through a paperwork deathmarch every year to stay
accredited, make sure that and all other vital processes are documented,
so new LUG officers needn't figure everything out from scratch. Think
of it as a systems-engineering problem: You're trying to eliminate
single points of failure.
And what works for the guys in the next town may not work for your crowd:
Surprise! The keys to this puzzle are still being sought. So, please
experiment, and let me know what works for you, so I can tell others.
Have fun!
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