[ale] ICANN expands top level domain name options

[Michael H. Warfield]

On Sun, 2008-06-29 at 13:00 -0400, Jim Popovitch wrote:
> 2008/6/29 Michael H. Warfield <mhw at wittsend.com>:
> >        Actually, it's an ingenious way to duck out of the whole political .xxx
> > controversy.

> Possibly, but then they should immediately announce that the $100,000
> to $500,000 USD signup fees will be donated to charities, not their
> own pockets.   I'll stand by my original assessment that this is all
> about $$, at least until I see some evidence that they will pass the
> money on to others.

	You are ignoring one very important detail.

	ICANN is a "not for profit public-benefit" organization incorporated in
California and governed by California laws regarding non-profits.  By
interesting coincidence, I just returned from the AGM (Annual General
Meeting) for FIRST (Forum of Incident Reaction Security Teams) in
Vancouver last week.  FIRST is another "not for profit" organization
incorporated in California and governed by those same California laws.

	At the AGM, in the general meeting itself, we, the voting membership,
go over the financials of the organization, the budget, the income, and
the tax status.  It's no joke that if we "make too much money", the tax
man cometh and we could easily loose that tax exempt status.  Our
treasurer verifies and confirms our tax exempt status every year and
reports our tax status to the membership along with the budget.  We have
to submit our finacials every year to the IRS (US and California) and
renew our non-profit status in order to retain it.

	We have a small conference (a little over 400 attendees this year)
which still means a conference budget of somewhat close to a quarter of
a million dollars.  Any "profit" from our conference must go into the
operation of the organization or into our other projects, as does our
membership fees, which are substantial.  Some of you, on this list, will
remember the Atlanta Linux Showcase (ALS).  We had some of this
discussion regarding the running of that show and what to do with any
excess moneys to avoid having to deal with the tax man.  You really do
NOT want to cross that line.

	We (FIRST) "can not" and "must not" "turn a profit".  Legally, we can
keep a couple of years worth of operating capital in the bank invested
for future operations or a contingency against some future emergency,
but even that is limited, just like ALS could keep some money in the
bank to bankroll future conferences.  We (a non-profit) can not "pay"
our officers (actually, we pay a service to act as our "secretariat" and
it's a pittance - our board of directors get most of their expenses paid
and that's all - they are "volunteers") anything excessive for the size
of our organization in comparison to other similar non-profits or we
will loose our tax exempt status.  So an individual can not shield a
personal for-profit operation behind a non-profit and take those excess
profits as personal income.

	So, no, it can't be all about the money unless they are going to pour
all of it back into expanded programs.  Legally, they can not turn a
profit and retain their non-profit tax status.  Legally, if they do turn
a profit, they have to do something like what you suggest.  They have to
pour profits back into their programs or otherwise dispose of it.

> -Jim P.

	Mike
-- 
Michael H. Warfield (AI4NB) | (770) 985-6132 |  mhw at WittsEnd.com
   /\/\|=mhw=|\/\/          | (678) 463-0932 |  http://www.wittsend.com/mhw/
   NIC whois: MHW9          | An optimist believes we live in the best of all
 PGP Key: 0xDF1DD471        | possible worlds.  A pessimist is sure of it!

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