[Koha] Subject: Re: Message from PTFS/LibLime and 501-c-3 organizations

[Jim Minges]

Hello,

I am not promoting establishment of a Koha foundation under U.S. tax laws in
preference to incorporation in some other country, but with respect I
believe some of the concerns about use of the U.S. IRS 501-c-3 status are
not entirely accurate. I have some experience in that area having
established several 501-c-3 organizations including most recently a library
foundation in 2009. While it certainly does take some time to gain that
status the process is not inherently difficult, simply detailed and time
consuming. The terms "public charity" and "private foundation" have
particular meanings in tax law, primarily related to their sources of
funding, but either is a fully tax-exempt organization. Probably the funding
sources of a Koha organization would lead to its having the status of a
private foundation. Any 501-c-3 is also incorporated in a U.S. state as a
not for profit corporation, an extremely simple process.

An association is really not a meaningful legal term, so a Koha Association
could in fact be legally established as a foundation. The distinctions in
governance and control that are of obvious concern would depend upon the
bylaws and some details of the 501-c-3 application, rather than than either
its name, or its legal status as a charity or foundation. I understand that
there are connotations to words that might make the Koha community more
comfortable with a particular name for the organization. That would present
no obstacle to the 501-c-3 process.

I repeat that I am not personally expressing any preference for the country
in which the organization would be incorporated. I have confidence in the
Koha community being able to come to a good decision on that in the process
that seems to be underway.

Jim Minges


-- 

"NEKLS and its member libraries are leaders and innovators in providing
exemplary library services."

Jim Minges, Director
Northeast Kansas Library System
4317 West 6th Street
Lawrence, KS  66049
Phone: 785-838-4090      FAX: 785-838-3989
jminges at nekls.org
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