Re: SPI and the Linux Debit Card

hello SPI,

It has been about a month since I sent my first email to the spi-general
list.

To recap, I have started a project called Linux Debit Card to raise
money to help support Open Source Software. I would like to see if
Linux Debit Card could possibly operate under SPI (as I understand it
SPI is somewhat of an umbrella for multiple organizations).

Here is a little update on the Linux Debit Card project:

1) It turns out that people are interested in the project. Not everyone
but enough to make it worth it. About 5% of people visiting the website
have been signing up. I feel this is a relatively high number for a
financial product coming from a poorly designed website, and an
organization that does not yet have 501(c)(3) tax exemption. Once these
things are taken care of this number seems likely to go up to 10 to 20%.

2) Online applications - we got permission from Debitman Card and a
process developed to accept online applications. Before this we only
had a paper application that had to be printed out and mailed in which
meant basically nobody would sign-up. With an online application we can
get at least that 5% of people visiting the website.

3) PINs can now be selected. Before Debitman Card randomly generated
PIN numbers and sent them out in a PIN mailer (you were stuck with what
you got). Now they also have a phone system that will allow users to
change their PIN number to whatever they like. This is one of those
fundamental pieces that was missing before but is now in place.

4) The website for Linux Debit Card has been temporarily taken down.
The reason for this is my own misunderstanding. Non-profit motives,
intentions, and actions does not make one legally a "non-profit". We
were calling ourselves a non-profit which I found out was wrong. We
took the website down while we figure things out. I have found out I
can legally bring the website back up if we don't call ourselves a
non-profit and send apologies to all of our cardholders but before I do
so I am hoping I can find a "real" non-profit to be our fiscal sponsor
so that nobody has any doubts about us trying to do the right thing.

I would like to know if SPI would be willing to become a Fiscal Sponsor
for Linux Debit Card. A Fiscal Sponsor is a 501(c)(3) non-profit that
handles all of the finances for another organization while it gets its
own 501(c)(3) status. Basically all of our money would go to SPI and
SPI would make sure that the money is handled in a way consistent with
501(c)(3). Since SPI is already set up for handling money it would
probably make sense if SPI treated the money as if it were a donation
(at least initially and until a charter was developed to specify how
Linux Debit Cards money should be spent). Linux Debit Card does not
have many expenses and I have been paying them out of pocket anyway.

"Individuals or groups in a hurry to begin operations and accept
tax-deductible donations can become sponsored by an organization that
already has 501(c)(3) status. By doing so, the group can apply for and
accept grants, accept tax-deductible donations, and carry on other
activities under the tax-exempt status of their sponsor. However, the
activities of the sponsored group must be consistent with those of the
sponsor. For example, a group that intends to provide services to
homeless people cannot be sponsored by a 501(c)(3) that is tax-exempt
for the purposes of providing classical music concerts."
http://search.genie.org/genie/action.lasso?-DB=genie_faqs.fp3&-Lay=Layout1&-Format=ans_result.htm&-Error=ans_error.htm&-Max=All&-Sortfield=faqID&category=Fiscal+Sponsorship&-Find=Open+Sesame

My second and more long term inquiry is might the Linux Debit Card
project be able operate under SPI at some point? This would be more of
a long term question, Fiscal sponsorship would be more of a first step
with less commitment. For an organization like Linux Debit Card, which
lacks both money and legal advice at this point, the ideal way to become
a non-profit would be to operate under an existing non-profit.

Since our website is down I put of our FAQ under a tmp directory so that
you could view it:
http://www.linuxdebitcard.org/tmp/faq.php

The main features of the Linux Debit Card:

1) powered by Debitman, the Linux powered financial network
2) works with existing checking account
3) uses proven PIN based security
4) at no additional cost to the cardholder 6 cents per transaction is
donated to Open Source Software.

I am appreciative of any advice, suggestions, and feedback.

Regards,

Todd Lisonbee

On Thu, 16 Sep 2004 17:17:45 -0700, "Todd Lisonbee"
<toddlisonbee(at)fastmail(dot)fm> said:
>
> hello Bruce,
>
> I contacted LinuxFund.org about this possibility. The LinuxFund.org
> signed an exclusivity agreement with MBNA and can not offer any other
> financial projects.
>
> I've have been emailing back and forth a little with Jerritt Collord,
> the executive director of LinuxFund.org, who has been providing some
> advice and feedback.
>
>
> The Projects are a little bit Different:
>
> Linux Debit Card
> -------------------------
> - Debit not Credit
> - Powered by Linux (i think this has some geek value)
> - Accepted where Debitman is accepted (the list is growing fast but is
> still a lot less than MasterCard)
>
> LinuxFund.org
> -------------------------
> - Credit Card
> - Accepted where ever Mastercard is accepted (which is almost
> everywhere)
> - Better recognized because it has been around awhile
>
>
> I believe that to at least some degree the projects compliment each
> other rather than compete against each other. Debit card users and
> credit card users are different types usually. Most people favor either
> one or the other.
>
> -Todd
>
>
>
> On Thu, 16 Sep 2004 15:10:26 -0700, "Bruce Perens" <bruce(at)perens(dot)com>
> said:
> > Todd,
> >
> > I think this should be within LinuxFund.org, they have operated a Linux
> > affinity credit card for about 5 years and have done a good job at it.
> > Have you briefed them yet?
> >
> > Thanks
> >
> > Bruce
> >
> > Todd Lisonbee wrote:
> >
> > >hello SPI,
> > >
> > >
> > >I have started a project called Linux Debit Card that may go nicely with
> > >SPI.
> > >
> > >the url is, http://www.linuxdebitcard.org/
> > >
> > >
> > >Here is the basic jist of my project:
> > >-------------------------------
> > >What is the Linux Debit Card?
> > >The Linux Debit Card is a way to generate revenue for Linux and other
> > >Open Source Projects. It is a secure PIN based debit card that attaches
> > >to your current checking account. The Linux Debit Card both generates
> > >revenue for Linux and is powered by Linux. Every time you use the Linux
> > >Debit Card six cents goes towards supporting Open Source Software.
> > >Linux Debit Card is a non-profit organization.
> > >
> > >What does it cost?
> > >It does not cost anything to sign-up or to use the card. In fact, while
> > >generating revenue to support Open Source projects the card can also
> > >help merchants save money.
> > >
> > >How is this possible?
> > >Whenever you use a Debit or Credit card at a merchant location the store
> > >pays a fee. With the Linux Debit Card, instead of your bank collecting
> > >the fee, money goes towards supporting Open Source software. Debitman,
> > >the Linux powered debit network, connects the Linux Debit Card to your
> > >checking account.
> > >
> > >-------------------------------
> > >
> > >6 cents per transaction doesn't sound like much but when you do the math
> > >it can work out to quite a bit:
> > >100,000 cards * 5 transactions/card/month * $0.06/transaction =
> > >$30,000/month
> > >
> > >Or:
> > >50,000 cards * 5 transactions/card/month * $0.06/transaction = $540,000
> > >over 3 years
> > >
> > >Even with 10,000 cards, which is not very many at all, you can still do
> > >nicely:
> > >10,000 cards * 5 transactions/card/month * $0.06/transaction =
> > >$3,000/month
> > >
> > >
> > >Most of the details are explained pretty well in the website,
> > >http://www.linuxdebitcard.org/faq.html
> > >
> > >-------------------------------
> > >
> > >And now the purpose of this email,
> > >
> > >As I understand it SPI is an umbrella for several organizations. Could
> > >the Linux Debit Card possibly fall under that umbrella? If it is a
> > >possiblity, how does that process work?
> > >
> > >The Linux Debit Card is not a software project but its goals seem very
> > >compatible to those of SPI.
> > >
> > >I believe for the Linux Debit Card to be successful it will need
> > >partnerships with other organizations (or to even be part of another
> > >org). Right now I could post some articles and press releases at various
> > >websites like newsforge, these would generate a lot of hits to
> > >http://www.linuxdebitcard.org/ resulting in so many cards issued. After
> > >the news article is gone though there would be nothing left to promote
> > >the card.
> > >
> > >I think the best way for the card to succeed is for it to be attached
> > >with specific projects. The money generated from the card goes towards
> > >specific projects and those projects help promote the card. Without
> > >these kinds of partnerships I think it is unlikely the Linux Debit Card
> > >will be successful. Partnerships will add longevity in the promotion of
> > >the card and add credibility to the project itself. Also, people will
> > >trust the Linux Debit Card if it is attached with an organization they
> > >know.
> > >
> > >
> > >Any feedback about the website or this idea as a way to generate revenue
> > >will be appreciated. For instance, what would it take for you
> > >personally to sign-up for a card? Does it seem like a scam? Why? Does
> > >this seem compatible with SPI? Does this sound like a crazy idea or do
> > >you think people would buy into it?
> > >
> > >
> > >
> > >Good questions to ask in evaluating this project are:
> > >
> > > Would people sign-up for the Card?
> > >
> > > and
> > >
> > > Would people use the Card?
> > >
> > >If the answer to these questions is yes then this would be a very easy
> > >way to generate a lot of revenue.
> > >
> > >
> > >Anyway, maybe some of these possibilities could be discussed a little on
> > >this list and then later maybe the subject could be brought up at an SPI
> > >meeting or looked at by a committee (or however it should work exactly).
> > >
> > >
> > >The Linux Debit Card project is live so you can fill out an application
> > >and get a card to see for yourself.
> > >
> > >I am happy to answer any questions.
> > >
> > >
> > >Have a nice day,
> > >
> > >-Todd Lisonbee
> > >
> > >
> > >
> > >_______________________________________________
> > >Spi-general mailing list
> > >Spi-general(at)lists(dot)spi-inc(dot)org
> > >http://lists.spi-inc.org/cgi-bin/listinfo/spi-general
> > >
> > >
> > >
> >
>
>