Re: Fwd: Draft of Proposal for the GNOME Foundation.

[kelly poverty bloomington in us]

Some comments, from a law student with some familiarity with
corporation and non-profit law.  Please note that these are not formal 
legal advice; for that see an attorney.  I'm raising issues, not
telling you what needs to be done.

1. Permitting donors to specify a named recipient probably violates
the anti-inurement requirement for non-profit status under IRS
regulations.  A non-profit entity may not inure to the benefit of a
private individual.  Allowing a donor to say "please give this money
to X" would cause the Foundation to inure to X's benefit; the
Foundation would be required to reject such gifts.  I suspect that the
most a donor can do is tag funds for a specific project.  (If the
Board directs a donor to send funds directly to a recipient, the
donation is not tax deductible.)

2. It is unwise to declare Miguel sole chairman in perpetuity.  No
offense intended to Miguel, but it is possible that he will be unable
or unwilling to handle those duties; that he may prove ill-equipped
for the role; or, for that matter, that he might be killed in a freak
rubber band accident next week.  Provision must be made for voluntary
resignation and for removal in case of death, incapacity, or
abandonment, and also for the appointment of deputy or interim
chairpersons.  Without such provisions, the Foundation would be
dissolved upon his departure for lack of successorship, or at least
badly tied up in court.  The IRS also looks askance at organizations
with a sole named chairman without provisions for successorship; such
organizations are viewed as having a considerable risk of inuring to
that individual.  A more normal choice is to have the Chairman
selected by the Board as the first matter of business after the
election of new board members.  I have little doubt that Miguel would
be acclaimed as the first chairperson should he wish to serve.

3. "No single organization or company will be allowed to have a
majority of the board seats."  It was my impression that individuals,
not organizations or companies, would hold board seats.  You'll have
to come up with a formulation that says what you mean, keeping in mind 
that people like me change "employers" on a regular basis (I'm an
independent contractor).

4. An Executive Director should be appointed to manage day-to-day
affairs of the Foundation.  Convening board meetings solely to resolve
to pay the organization's phone bill is nonproductive.  It is usually
best that the Executive Director NOT be the Chairman of the Board.

5. The corporation law in most states requires that board meetings and
membership meetings be held so that all persons in attendance may hear
each other.  Electronic meetings are not yet legal unless they include
voice transmission.  Email is not yet an acceptable means to conduct a
vote or an election; the use of public key cryptography is not yet
acceptable.  The law dictates specific forms for conducting votes and
similar business; failing to observe them may lead to administrative
dissolution.  The statutory requirements are generally not waivable.

6. While fixed term limits are probably not wise, directors should be
required to periodically stand for reelection.

7. Unenforced trademarks dilute.  I would recommend a licensing scheme 
where the use of the mark is conditioned on making certain written
promises in furtherance of the Foundation's interest -- either
financial or non-financial -- along with a liquidated damages clause
and an agreement to be liable for fees and costs in the event of
breach.  A lawyer can advise better on these matters.

8. Copyright assignment needs to be discussed.

Kelly