July 25, 2017 - Bryce Harrington
How We Simplified X.org Foundation Administration with SPI
The X.org Foundation is a non-profit governance entity charged with overseeing core components of the open source graphics community. X.org had been structured as a legal (non-profit) corporate entity registered in the state of Delaware for some years, which provided tax deduction on donations and other such benefits.
Unfortunately, being a non-profit is not cheap and entails various administrative tasks – filing annual reports, maintaining a bank account, dealing with donations and expenses, and so on – so the overhead of being an independent non-profit was deemed not worth the benefits, and in 2016 the members voted to join Software in the Public Interest (SPI). Joining SPI made a lot of sense; primarily, it would relieve X.org of administrative burdens while preserving the benefits of non-profit status. The costs of being in SPI are offset by the savings of not having to pay the various fees required to upkeep the corporate entity ourselves.
In that 2016 vote, I was elected to a position on the board to serve in the role of treasurer. I took on the tasks of establishing our financial services with SPI and closing down our Delaware registration. These seemingly straightforward administrative tasks proved to turn into a much more involved ordeal.
The Challenges of Dissolving a Non-Profit
Initiating things with SPI was complicated by the fact that I was new to the board, as well as the usual response delay endemic with volunteer-driven efforts. With some email back-and-forthing, we were added to SPI’s website, established an X.org “Click&Pledge” bucket for credit card donations, and later established Paypal donations as well.
The X.org Foundation’s cash assets were held in a Bank of America (BofA) account registered under the name of a previous treasurer. Unfortunately, BofA’s security policies meant that only the old treasurer could close out the account; fortunately, he was still available and able to do this. A lesson learned for other non-profits would be to ensure multiple people are registered for the organization’s bank accounts.
Once the assets were transferred it was time to close down the foundation itself, or “dissolution” in corporate terms. Delaware had a byzantine array of forms, fees, and procedures, and with this all being completely foreign to my experience, mistakes were inevitable. They kindly provide PDFs with fillable fields, however while some forms can be filed online, the PDFs have to be printed out and sent by mail. I was confused on this point and sent the filled in PDF to them online; unfortunately their system’s PDF processing system doesn’t support fillable fields and strips them out, resulting in invalid submissions.
Another lesson I learned is that the Division of Corporations does not notify you in case of errors, so I did not discern the failure for months and it took a number of phone calls to identify the problems and correct them. What brought the failure to my attention was when we attempted to terminate services with our registered agent. I’m still not exactly sure what a registered agent is, but corporate registration in Delaware requires it. X.org had a contract with National Registered Agents, Inc., who (once I’d squared away the dissolution paperwork) were pleasant to work with to close out our account with them.
It’s hard not to think of this transition as the end of one era and the beginning of another, and I’m very optimistic about the new capacity that the X.org Foundation has via SPI for receiving and processing donations. We’re now well positioned for organizing fund-raising activities to support X.org’s events and student sponsorships, and hopefully the information provided in this article will be beneficial to other open source communities facing similar problems.
About Bryce Harrington
Bryce Harrington is a Senior Open Source Developer at the Samsung Open Source Group focusing on Open Source Graphics. Prior to Samsung, he lead Canonical, Ltd.'s Ubuntu X.org team, and focused on stabilization of the graphics and input infrastructures for the Ubuntu distribution. Bryce began his career in the aerospace industry as a spacecraft propulsions engineer at The Aerospace Corporation, Hughes Space and Communications and TRW. Later, he joined the Open Source Development Labs as a Senior Performance Engineer working on NFSv4 testing and development of automated test systems. He is a founder and developer of the Inkscape project and serves as Chairman of the Inkscape Board. Bryce has a BS-AE from USC and an MS-AE from Caltech.
Image Credits: Sven (via Wikipedia)