Re: Resolution 2019-05-25.jrk.1: Removing Jenkins as associated project

I'd like to propose this resolution for the June 10 meeting to reflect
Jenkins's shift from SPI to CDF, their desire to transfer assets, and
our legal restrictions on what outbound asset transfers are permissible.

---
Resolution 2019-05-25.jrk.1: Removing Jenkins as associated project

WHEREAS

1. Jenkins is currently an SPI associated project.

2. Jenkins is a founding member of the Continuous Delivery Foundation,
which furthers free software related to continuous integration and
delivery. under the aegis of the Linux Foundation.

3. Jenkins no longer requires or intends to use the services which SPI
provides to associated projects, such as receiving donations, except
with respect to the management of assets currently held by SPI for
Jenkins.

4. Jenkins wishes to transfer its assets held by SPI to the Continuous
Delivery Foundation, to the extent not spent before the transfer is
completed.

5. Although neither the Linux Foundation nor the Continuous Delivery
Foundation is itself a 501(c)(3) public charity, legal counsel for all
organizations involved are working together to explore which procedures
for asset transfer are compliant with SPI's legal obligations as a
501(c)(3) public charity.

THE SPI BOARD RESOLVES THAT

1. Jenkins is removed from the list of SPI associated projects.

2. SPI will endeavor in good faith to transfer all assets currently held
by SPI for Jenkins to the Linux Foundation, to the Continuous Delivery
Foundation, or to an organization affiliated with the Linux Foundation
or the Continuous Delivery Foundation, under the conditions laid out in
paragraphs 3 to 5, within a reasonable time from the date of approval of
this resolution.

3. Any SPI directors, officers, contractors, employees, volunteers or
other agents who approve the transfer described in section 2 on behalf
of SPI (hereinafter "SPI transferors") shall only proceed with the
transfer if they believe it will further SPI's exempt charitable
purposes as approved by the IRS and will comply with SPI's legal
obligations regarding transfering assets held by SPI to other
organzations.

4. SPI transferors shall consider advice of SPI's legal counsel in
reaching the conclusions required in paragraph 3.

5. The organization receiving the transfer shall provide any commitments
SPI transferors may feel necessary to assure SPI that the assets
received will remain dedicated to use of the Jenkins project, and/or to
promote free and open source software rather than proprietary software.

6. Until the transfer described in section 2 has completed, SPI will
continue to accept expenditure or other asset management requests from
Jenkins with respect to those assets SPI continues to hold for
Jenkins, as if Jenkins were still an SPI associated project.

7. It is SPI's good-faith intention to complete the transfer described
in section 2. However, if this transfer cannot be completed within a
reasonable time, in the sole discretion of SPI transferors or the SPI
board, SPI may (but is not required to) abandon plans to complete the
transfer.

8. In the scenario where the transfer plans are abandoned, if Jenkins
does not wish to rejoin SPI as an associated project and does not spend
down the assets in a timely fashion as permitted by paragraph 6, SPI
will explore what asset disposition options remain available and
consistent with its legal obligations and its charitable mission.

9. SPI will no longer actively seek donations on behalf of Jenkins.

10. This is subject to any undischarged obligations SPI may have with
respect to Jenkins. We are not aware of any such undischarged
obligations. We ask anyone who is aware of any to notify us within 30
days of this resolution.
---

- Jimmy Kaplowitz
jimmy(at)spi-inc(dot)org

Hello Jimmy,

Minor: There is a full stop vs comma typo in (2).

Is there precedent for project leaving the SPI where they do not (yet)
have a 501(c)(3) public charity to transfer their assets to? If not, this
seems to me personally to be a sensible and practical way to handle this.

Thank you,

Peter
(Open Bioinformatics Foundation Treasurer)

On Sun, May 26, 2019 at 1:52 AM Jimmy Kaplowitz <jimmy(at)spi-inc(dot)org> wrote:
>
> I'd like to propose this resolution for the June 10 meeting to reflect
> Jenkins's shift from SPI to CDF, their desire to transfer assets, and
> our legal restrictions on what outbound asset transfers are permissible.
>
> ---
> Resolution 2019-05-25.jrk.1: Removing Jenkins as associated project
>
> WHEREAS
>
> 1. Jenkins is currently an SPI associated project.
>
> 2. Jenkins is a founding member of the Continuous Delivery Foundation,
> which furthers free software related to continuous integration and
> delivery. under the aegis of the Linux Foundation.
>
> 3. Jenkins no longer requires or intends to use the services which SPI
> provides to associated projects, such as receiving donations, except
> with respect to the management of assets currently held by SPI for
> Jenkins.
>
> 4. Jenkins wishes to transfer its assets held by SPI to the Continuous
> Delivery Foundation, to the extent not spent before the transfer is
> completed.
>
> 5. Although neither the Linux Foundation nor the Continuous Delivery
> Foundation is itself a 501(c)(3) public charity, legal counsel for all
> organizations involved are working together to explore which procedures
> for asset transfer are compliant with SPI's legal obligations as a
> 501(c)(3) public charity.
>
> THE SPI BOARD RESOLVES THAT
>
> 1. Jenkins is removed from the list of SPI associated projects.
>
> 2. SPI will endeavor in good faith to transfer all assets currently held
> by SPI for Jenkins to the Linux Foundation, to the Continuous Delivery
> Foundation, or to an organization affiliated with the Linux Foundation
> or the Continuous Delivery Foundation, under the conditions laid out in
> paragraphs 3 to 5, within a reasonable time from the date of approval of
> this resolution.
>
> 3. Any SPI directors, officers, contractors, employees, volunteers or
> other agents who approve the transfer described in section 2 on behalf
> of SPI (hereinafter "SPI transferors") shall only proceed with the
> transfer if they believe it will further SPI's exempt charitable
> purposes as approved by the IRS and will comply with SPI's legal
> obligations regarding transfering assets held by SPI to other
> organzations.
>
> 4. SPI transferors shall consider advice of SPI's legal counsel in
> reaching the conclusions required in paragraph 3.
>
> 5. The organization receiving the transfer shall provide any commitments
> SPI transferors may feel necessary to assure SPI that the assets
> received will remain dedicated to use of the Jenkins project, and/or to
> promote free and open source software rather than proprietary software.
>
> 6. Until the transfer described in section 2 has completed, SPI will
> continue to accept expenditure or other asset management requests from
> Jenkins with respect to those assets SPI continues to hold for
> Jenkins, as if Jenkins were still an SPI associated project.
>
> 7. It is SPI's good-faith intention to complete the transfer described
> in section 2. However, if this transfer cannot be completed within a
> reasonable time, in the sole discretion of SPI transferors or the SPI
> board, SPI may (but is not required to) abandon plans to complete the
> transfer.
>
> 8. In the scenario where the transfer plans are abandoned, if Jenkins
> does not wish to rejoin SPI as an associated project and does not spend
> down the assets in a timely fashion as permitted by paragraph 6, SPI
> will explore what asset disposition options remain available and
> consistent with its legal obligations and its charitable mission.
>
> 9. SPI will no longer actively seek donations on behalf of Jenkins.
>
> 10. This is subject to any undischarged obligations SPI may have with
> respect to Jenkins. We are not aware of any such undischarged
> obligations. We ask anyone who is aware of any to notify us within 30
> days of this resolution.
> ---
>
> - Jimmy Kaplowitz
> jimmy(at)spi-inc(dot)org
> _______________________________________________
> Spi-general mailing list
> Spi-general(at)lists(dot)spi-inc(dot)org
> http://lists.spi-inc.org/listinfo/spi-general

Hi Peter,

Thanks for noticing the typo. I accept that fix. Tim, if you see this
email when adding this resolution the agenda, please include the typo
fix. I'll check at some point and fix it if not yet done.

I don't believe we've had similar cases before at SPI, no. We've had
cases before where a request was made, but either it was less clearly in
keeping with what's good for the future of the project as a member of
the free software community, or there wasn't enough legal counsel
attention on both sides to drive forward a solution.

There have been similar cases at other free software nonprofits, and
we've had informal conversations with people there about how those
situations were handled. It's not my place to publicly disclose the
content of those private / off-the-record conversations. What I can
confirm that is this type of transfer is indeed not easy (nor should it
be!), but also that it is occasionally possible with creative planning
and a lot of attention to many details.

- Jimmy Kaplowitz
jimmy(at)spi-inc(dot)org

On Mon, May 27, 2019 at 12:08:55PM +0100, Peter Cock wrote:
> Hello Jimmy,
>
> Minor: There is a full stop vs comma typo in (2).
>
> Is there precedent for project leaving the SPI where they do not (yet)
> have a 501(c)(3) public charity to transfer their assets to? If not, this
> seems to me personally to be a sensible and practical way to handle this.
>
> Thank you,
>
> Peter
> (Open Bioinformatics Foundation Treasurer)
>
> On Sun, May 26, 2019 at 1:52 AM Jimmy Kaplowitz <jimmy(at)spi-inc(dot)org> wrote:
> >
> > I'd like to propose this resolution for the June 10 meeting to reflect
> > Jenkins's shift from SPI to CDF, their desire to transfer assets, and
> > our legal restrictions on what outbound asset transfers are permissible.
> >
> > ---
> > Resolution 2019-05-25.jrk.1: Removing Jenkins as associated project
> >
> > WHEREAS
> >
> > 1. Jenkins is currently an SPI associated project.
> >
> > 2. Jenkins is a founding member of the Continuous Delivery Foundation,
> > which furthers free software related to continuous integration and
> > delivery. under the aegis of the Linux Foundation.
> >
> > 3. Jenkins no longer requires or intends to use the services which SPI
> > provides to associated projects, such as receiving donations, except
> > with respect to the management of assets currently held by SPI for
> > Jenkins.
> >
> > 4. Jenkins wishes to transfer its assets held by SPI to the Continuous
> > Delivery Foundation, to the extent not spent before the transfer is
> > completed.
> >
> > 5. Although neither the Linux Foundation nor the Continuous Delivery
> > Foundation is itself a 501(c)(3) public charity, legal counsel for all
> > organizations involved are working together to explore which procedures
> > for asset transfer are compliant with SPI's legal obligations as a
> > 501(c)(3) public charity.
> >
> > THE SPI BOARD RESOLVES THAT
> >
> > 1. Jenkins is removed from the list of SPI associated projects.
> >
> > 2. SPI will endeavor in good faith to transfer all assets currently held
> > by SPI for Jenkins to the Linux Foundation, to the Continuous Delivery
> > Foundation, or to an organization affiliated with the Linux Foundation
> > or the Continuous Delivery Foundation, under the conditions laid out in
> > paragraphs 3 to 5, within a reasonable time from the date of approval of
> > this resolution.
> >
> > 3. Any SPI directors, officers, contractors, employees, volunteers or
> > other agents who approve the transfer described in section 2 on behalf
> > of SPI (hereinafter "SPI transferors") shall only proceed with the
> > transfer if they believe it will further SPI's exempt charitable
> > purposes as approved by the IRS and will comply with SPI's legal
> > obligations regarding transfering assets held by SPI to other
> > organzations.
> >
> > 4. SPI transferors shall consider advice of SPI's legal counsel in
> > reaching the conclusions required in paragraph 3.
> >
> > 5. The organization receiving the transfer shall provide any commitments
> > SPI transferors may feel necessary to assure SPI that the assets
> > received will remain dedicated to use of the Jenkins project, and/or to
> > promote free and open source software rather than proprietary software.
> >
> > 6. Until the transfer described in section 2 has completed, SPI will
> > continue to accept expenditure or other asset management requests from
> > Jenkins with respect to those assets SPI continues to hold for
> > Jenkins, as if Jenkins were still an SPI associated project.
> >
> > 7. It is SPI's good-faith intention to complete the transfer described
> > in section 2. However, if this transfer cannot be completed within a
> > reasonable time, in the sole discretion of SPI transferors or the SPI
> > board, SPI may (but is not required to) abandon plans to complete the
> > transfer.
> >
> > 8. In the scenario where the transfer plans are abandoned, if Jenkins
> > does not wish to rejoin SPI as an associated project and does not spend
> > down the assets in a timely fashion as permitted by paragraph 6, SPI
> > will explore what asset disposition options remain available and
> > consistent with its legal obligations and its charitable mission.
> >
> > 9. SPI will no longer actively seek donations on behalf of Jenkins.
> >
> > 10. This is subject to any undischarged obligations SPI may have with
> > respect to Jenkins. We are not aware of any such undischarged
> > obligations. We ask anyone who is aware of any to notify us within 30
> > days of this resolution.
> > ---
> >
> > - Jimmy Kaplowitz
> > jimmy(at)spi-inc(dot)org
> > _______________________________________________
> > Spi-general mailing list
> > Spi-general(at)lists(dot)spi-inc(dot)org
> > http://lists.spi-inc.org/listinfo/spi-general

Jimmy Kaplowitz writes ("Re: Resolution 2019-05-25.jrk.1: Removing Jenkins as associated project"):
> There have been similar cases at other free software nonprofits, and
> we've had informal conversations with people there about how those
> situations were handled. It's not my place to publicly disclose the
> content of those private / off-the-record conversations. What I can
> confirm that is this type of transfer is indeed not easy (nor should it
> be!), but also that it is occasionally possible with creative planning
> and a lot of attention to many details.

The key point is that SPI is a charity. That's what a 501(c)(3) is:
it's US tax law jargon for "charity".

The Linux Foundation is a 501(c)(6). Despite the similarity in the
numbers, these are completley different things. A 501(c)(6) is a
trade association.

The purpose (the legal objective) of a charity is the public benefit.

The purposeof a trade association is the benefit of its members.
By members here we do not mean projects like Jenkins. We mean the
corporate members like[1]:
AT&T, Cisco, Fujitsu, Hitachi, Huawei, IBM, Intel, Microsoft,
NEC, Oracle, Qualcomm, Samsung, and VMware

Clearly SPI's charitable funds cannot legally be, and must not be,
applied for the private benefit of these corporations.

If the Jenkins project itself is now being governed by these
corporations then it is not clear that promoting or improving Jenkins
(the software) is any longer a charitable activity.

Perhaps there are things in the Jenkins ecosystem that are focused
towards the needs of the wider public rather than the corporate
interests; those are the things that the money can be spent on.
(Those things might even conflict with the policies or objectives of
the new corporate trade association umbrella foundation.)

As for legal advice, there is a conflict of interest here between the
public interest (as represented here by SPI) and these foundations.
I hope that SPI will take proper formal legal advice from our own
laywers - not LF or CDF laywers - about what SPI can and should do
with these assets.

That legal advice may cost money. That ought to come out of the SPI
Jenkins earmark. (I think it must be paid for out of SPI's charitable
funds because we should be the lawyers' paymaster.)

Ian.

[1] Taken from the example list of members at
https://en.wikipedia.org/wiki/Linux_foundation
You can see the full list of members of these foundations here:
https://www.linuxfoundation.org/membership/members/
https://cd.foundation/members/

I'm the liaison of the Jenkins project to SPI.

IANAL, but this status difference was identified from the beginning. The
legal counsel from both sides looked at this and I believe they concluded
that there are a number of ways forward. I believe the 1st choice is to
transfer the assets to a 501(c)(3) under the LF. This is laid out in
"whereas #5",

The governance of the Jenkins project under the CDF is not under these
companies, at least no more than how the governance of the Linux kernel is
under those companies. More specifically, the charter of the CDF is laid
out here <https://github.com/cdfoundation/charter/blob/master/CHARTER.md>.

On Thu, May 30, 2019 at 9:07 PM Ian Jackson <ijackson(at)chiark(dot)greenend(dot)org(dot)uk>
wrote:

> Jimmy Kaplowitz writes ("Re: Resolution 2019-05-25.jrk.1: Removing Jenkins
> as associated project"):
> > There have been similar cases at other free software nonprofits, and
> > we've had informal conversations with people there about how those
> > situations were handled. It's not my place to publicly disclose the
> > content of those private / off-the-record conversations. What I can
> > confirm that is this type of transfer is indeed not easy (nor should it
> > be!), but also that it is occasionally possible with creative planning
> > and a lot of attention to many details.
>
> The key point is that SPI is a charity. That's what a 501(c)(3) is:
> it's US tax law jargon for "charity".
>
> The Linux Foundation is a 501(c)(6). Despite the similarity in the
> numbers, these are completley different things. A 501(c)(6) is a
> trade association.
>
> The purpose (the legal objective) of a charity is the public benefit.
>
> The purposeof a trade association is the benefit of its members.
> By members here we do not mean projects like Jenkins. We mean the
> corporate members like[1]:
> AT&T, Cisco, Fujitsu, Hitachi, Huawei, IBM, Intel, Microsoft,
> NEC, Oracle, Qualcomm, Samsung, and VMware
>
> Clearly SPI's charitable funds cannot legally be, and must not be,
> applied for the private benefit of these corporations.
>
> If the Jenkins project itself is now being governed by these
> corporations then it is not clear that promoting or improving Jenkins
> (the software) is any longer a charitable activity.
>
> Perhaps there are things in the Jenkins ecosystem that are focused
> towards the needs of the wider public rather than the corporate
> interests; those are the things that the money can be spent on.
> (Those things might even conflict with the policies or objectives of
> the new corporate trade association umbrella foundation.)
>
> As for legal advice, there is a conflict of interest here between the
> public interest (as represented here by SPI) and these foundations.
> I hope that SPI will take proper formal legal advice from our own
> laywers - not LF or CDF laywers - about what SPI can and should do
> with these assets.
>
> That legal advice may cost money. That ought to come out of the SPI
> Jenkins earmark. (I think it must be paid for out of SPI's charitable
> funds because we should be the lawyers' paymaster.)
>
> Ian.
>
> [1] Taken from the example list of members at
> https://en.wikipedia.org/wiki/Linux_foundation
> You can see the full list of members of these foundations here:
> https://www.linuxfoundation.org/membership/members/
> https://cd.foundation/members/
> _______________________________________________
> Spi-general mailing list
> Spi-general(at)lists(dot)spi-inc(dot)org
> http://lists.spi-inc.org/listinfo/spi-general
>

--
Kohsuke Kawaguchi

On Fri, May 31, 2019 at 08:49:37AM +0800, Kohsuke Kawaguchi wrote:
> I'm the liaison of the Jenkins project to SPI.
>
> IANAL, but this status difference was identified from the beginning. The
> legal counsel from both sides looked at this and I believe they concluded
> that there are a number of ways forward. I believe the 1st choice is to
> transfer the assets to a 501(c)(3) under the LF. This is laid out in
> "whereas #5",

Has the LF committed to provide the resources to create the legal
entity that would then apply for 501(c)(3) status? And it's
understood that it can take between 2 and 12 months for the IRS to
approve granting the 501(c)(3) status to an organization, right?

This is under normal circumstances; with the IRS being slammed dealing
with the recent changes to the tax law, I have no idea what the
current guestimate for how long the IRS will take.

One of the issues that caused a huge amount of problems with the
Usenix / NewSage controversy in 2005 was a misunderstanding of how
long it can take to gin up a new 501(c)(3) organization, and the
reluctance of the then Usenix board to risk their 501(c)(3) status
transfering substantial assets to a non-501(c)(3) organization.

(I served as Treasurer on the Usenix board at the time, and the whole
thing was a real mess. This was not the whole cause of the
controversy, but the legal issues around transfer of 501(c)(3) funds
and the assumption by some that it would be trivial to create new
501(c)(3) orgs on short notice were certainly contributory factors.)

- Ted

On Thu, May 30, 2019 at 09:12:21PM -0400, Theodore Ts'o wrote:
> Has the LF committed to provide the resources to create the legal
> entity that would then apply for 501(c)(3) status? And it's
> understood that it can take between 2 and 12 months for the IRS to
> approve granting the 501(c)(3) status to an organization, right?
>
> This is under normal circumstances; with the IRS being slammed dealing
> with the recent changes to the tax law, I have no idea what the
> current guestimate for how long the IRS will take.

I was going to give a vaguer response to reflect the private and
non-final nature of the discussions between SPI and Jenkins/LF/CDF, but
since Kohsuke mentioned the 501(c)(3) hope here: my understanding is
that the potential new 501(c)(3) has already applied for recognition, so
the admittedly long timeline you describe is not all in the future.
Transfering to an approved 501(c)(3) with compatible exempt purposes
would clearly be the easiest, least risky, and preferred option for SPI;
LF already knows this.

As Kohsuke said, the resolution already allows for this possibility. We
worded the resolution to allow an intentionally vague "reasonable time"
for the transfer, with SPI having the sole discretion to decide to
abandon the process if it takes too long or otherwise becomes
infeasible. If they're not in a rush, we can probably stick with the
501(c)(3) route unless the IRS says no to them.

If we do transfer to a non-501(c)(3) org, the resolution also envisions
the possibility of requiring commitments from the receiving org as part
of being responsible and compliant with SPI's obligations as a 501(c)(3)
charity. I shouldn't play lawyer here and give a public summary of the
other requirements when transfering to a non-501(c)(3) org, but
sometimes it can be both appropriate for the charitable mission and
legally possible. We would only do that if both of these are true.

A few other comments in response to some of Ian's concerns:

* Jenkins has never been a charity any more than Debian has; associated
project relationships with SPI are non-exclusive and arms-length. It's
SPI which is the charity.

* Jenkins made its own internal decision to participate in creating the
CDF. They did consult with us before the public announcement, but as we
told them, we have no veto power. Their publicly stated reasons do make
sense to me, as well. They did incorrectly conclude in one of their main
mailing list posts about this that SPI can't sign contracts for projects
or directly pay recurring project expenses; we do both. However, they
are correct in surmising that they would benefit from a legal home with
more resources than SPI can currently offer.

* Since Jenkins wanted to do this and we couldn't stop them even if we
wanted to, the main question for the SPI board is whether we should
withhold those Jenkins assets we do control from any legally permissible
asset transfer to the new organiation, forcing them to fork / rename /
separately fundraise. If this transfer were going to convert Jenkins
into proprietary software, or were to convert it from broad community
control (with some non-exclusive leadership from CloudBees) to control
by one main sponsor, we could and would say no.

* The actual proposal to transfer to CDF, aside from the potential
change of tax status, poses none of those problems. Jenkins will remain
free software just like anything released under the aegis of the Linux
Foundation, nor will it unduly fall under the sway of one or another
corporation. Yes, Linux Foundation's 501(c)(6) orgs are pay-to-play. But
even SPI accepts projects where many corporations are actively
participating in the development, just not ones where control is
concentrated. There's nothing to suggest this transfer will concentrate
control more than the status quo.

* Regarding our legal help: I can confirm that, on this matter, our
lawyer is representing only SPI and not representing LF/CDF. LF/CDF have
separate legal counsel. SPI is currently using our usual pro bono
counsel for this matter since it is firmly within her area of expertise,
but if we do incur legal costs in connection with this transfer, any
charges which LF/CDF aren't willing to cover would indeed come out of
the Jenkins earmark and not SPI's general fund.

- Jimmy Kaplowitz
jimmy(at)spi-inc(dot)org

Jimmy,

Thanks for your note; it sounds like the board is on top of things. I
think we all agree that it's totally up to Jenkins-the-project to
decide which organization will hold their assets and provide other
legal services.

I've just seen past cases where software engineers fail to understand
how much work and real value organizations which provide these sorts
of legal services, whether it's organizations like SPI, SFLC's FSSN,
the LF's new CDF, which do this as a public service --- or for-profit
companies, like Association Headquarters, which provides these
services to not-for-profit organizations and would-be non-profit
organizations for a very tidy sum. It's really easy to take such
efforts for granted, and assume that it's trivial compared to, say,
writing a design document for a new feature in your favoriate free
software project of your choice. :-)

In any case, since I've not said this recently, we should all very
much give thanks to all of the volunteers who work on the SPI. It's a
very valuable thing that you do, and I know that it's not always fun,
and it's not always easy.

Cheers,

- Ted

Jimmy Kaplowitz writes ("Re: Resolution 2019-05-25.jrk.1: Removing Jenkins as associated project"):
> A few other comments in response to some of Ian's concerns:

Thanks. Much of this is reassuring.

However:

> As Kohsuke said, the resolution already allows for this possibility. We
> worded the resolution to allow an intentionally vague "reasonable time"
> for the transfer, with SPI having the sole discretion to decide to
> abandon the process if it takes too long or otherwise becomes
> infeasible. If they're not in a rush, we can probably stick with the
> 501(c)(3) route unless the IRS says no to them.

I do not think it is appropriate for the resolution to authorise a
transfer without clearly stating what organisation the transfer is to.
This is not a situation where a resolution that is intentionally vague
is appropriate.

If I were a board member I would worry that voting in favour of this
resolution would amount to delegating my obligations to uphold US
charity law.

Instead: the resolution now should certainly say that we should stop
accepting more donations, etc. It can also say that we should
investigate transfer options. That is fine.

But the final arrangements for the transfer, when they are known,
should be put to the board for a confirmatory vote. At that point we
will know exactly what the proposed transferee is and the SPI board
(and indeed the membership) can decide whether it is an appropriate
recipient - and its appropriateness might involve ethical or political
questions as well as legal ones.

For example,

Kohsuke Kawaguchi writes:
> I believe the 1st choice is to transfer the assets to a 501(c)(3)
> under the LF. This is laid out in "whereas #5",

How would this proposed 501(c)(3) be governed ?

Jimmy tells us that while the CDF is governed by its corporate
members, the Jenkins project is not.

Would decisions for the 501(c)(3) be made by the CDF board or the LF
board or by Jenkins's governance structures ?

While it may be lawful for SPI to transfer charitable assets to
another charity which spends those charitable funds on
legally-charitable purposes but at the direction of for-profit
corporations, it is not clear to me that it is ethically appropriate
for SPI to make such a transfer.

Ian.

On Mon, Jun 03, 2019 at 12:15:53PM +0100, Ian Jackson wrote:
>...
> But the final arrangements for the transfer, when they are known,
> should be put to the board for a confirmatory vote. At that point we
> will know exactly what the proposed transferee is and the SPI board
> (and indeed the membership) can decide whether it is an appropriate
> recipient - and its appropriateness might involve ethical or political
> questions as well as legal ones.
>...
> While it may be lawful for SPI to transfer charitable assets to
> another charity which spends those charitable funds on
> legally-charitable purposes but at the direction of for-profit
> corporations, it is not clear to me that it is ethically appropriate
> for SPI to make such a transfer.

These are the assets of the associated project that are only held in
trust by SPI.

It would be unethical if the board or membership of SPI would refuse
a lawful transfer for political reasons.

It would also set a dangerous precedent if the personal opinions of
SPI members could result in withholding of assets from projects.

> Ian.

cu
Adrian

--

"Is there not promise of rain?" Ling Tan asked suddenly out
of the darkness. There had been need of rain for many days.
"Only a promise," Lao Er said.
Pearl S. Buck - Dragon Seed

Adrian Bunk writes ("Re: Resolution 2019-05-25.jrk.1: Removing Jenkins as associated project"):
> On Mon, Jun 03, 2019 at 12:15:53PM +0100, Ian Jackson wrote:
> > While it may be lawful for SPI to transfer charitable assets to
> > another charity which spends those charitable funds on
> > legally-charitable purposes but at the direction of for-profit
> > corporations, it is not clear to me that it is ethically appropriate
> > for SPI to make such a transfer.
>
> These are the assets of the associated project that are only held in
> trust by SPI.

They are indeed held in trust by SPI. The terms of the trust are,
largely, the SPI Associated Project Framework:

http://www.spi-inc.org/corporate/resolutions/2004/2004-08-10.iwj.1/

| money will be spent according to the instructions of (and SPI's
| agreement with) the Project, provided that these instructions are
| consistent with SPI's goals and legal obligations.

Note the reference to SPI's goals.

> It would be unethical if the board or membership of SPI would refuse
> a lawful transfer for political reasons.

The board should refuse a lawful transfer if it is not consistent with
SPI's goals.

> It would also set a dangerous precedent if the personal opinions of
> SPI members could result in withholding of assets from projects.

No-one is suggesting withholding these assets. Even if there is a
delay or a difficulty with transferring them to another organisation,
they remain available to be spent on Jenkins-related things.

Obviously if the Jenkins project has decided (via its own governance
processes) that it wants to transfer these assets and have them
managed by a different body than SPI, then that is a very good reason
to do that. We definitely don't want to hang onto things.

But it is not conclusive. The SPI board must act lawfully, which
means complying with US tax law, and using SPI's assets to further
SPI's legal objectives. It must also act ethically, which means
dealing honourably and also furthering SPI's goals more generally.

Right now we don't know exactly what the shape of the proposed new
organisation is. The SPI board should certainly not approve a
transfer to an as-yet-unknown organisation.

If the proposed new organisation becomes clearly defined then we need
to evaluate it on its merits. If it is a 501(c)(3) whose management
of the transferred assets would be broadly similar to SPI's,
particularly with respect to decisions of the Jenkins project, then
there is no problem.

If it is an organisation, even a 501(c)(3), which is controlled by the
LF's or the CDF's corporate members, SPI should probably seek to
clarify with the Jenkins project's representatives what undertakings
(if any) SPI should seek with respect to the transferred assets.

For example, will the new foundation take the assets on trust in a
manner similar to SPI, and respect the Jenkins project's decisions ?
If not then SPI should at the very least clarify with the Jenkins
project that they realise that they are losing control of the money
and wish to proceed anyway.

To put it another way: if it is proposed that the trust should be
dissolved - rather than merely transferred to a new trustee (or
converted into a broadly similar arrangement with a new sponsoring
organisation) - we should be very clear about that.

Ian.

--
Ian Jackson <ijackson(at)chiark(dot)greenend(dot)org(dot)uk> These opinions are my own.

If I emailed you from an address @fyvzl.net or @evade.org.uk, that is
a private address which bypasses my fierce spamfilter.

On Mon, Jun 03, 2019 at 12:15:53PM +0100, Ian Jackson wrote:
> I do not think it is appropriate for the resolution to authorise a
> transfer without clearly stating what organisation the transfer is to.
> This is not a situation where a resolution that is intentionally vague
> is appropriate.
>
> If I were a board member I would worry that voting in favour of this
> resolution would amount to delegating my obligations to uphold US
> charity law.

Board members at any organization routinely delegate their obligations
to comply with the law to the individuals who carry out the detailed
work. More specifically, the role of the board is to oversee, but this
does not mean final approval must be given individually to each transfer
only after every detail is known. It means enough attention to the
parameters that the rest can _responsibly_ be left to trusting those
acting for SPI, as well as following up after the fact. SPI has
historically leaned too much on board votes, and that's been a
contributing factor toward the high level of burnout that SPI directors
have had.

The resolution contains several safeguards in the interest of being
responsible.

For one, it does not contain any individualized grant of authority
toward specific people or roles in carrying out the transfer. The only
people with inherent authority to carry out the board's proposed
instruction are already officers (possibly other directors as well), who
already have statutory obligations toward SPI. If they delegate or
designate anyone else to act on this, this will of course not relieve
them of their own obligations. But I do imagine that, in practice, it
will be an SPI officer who gives final approval to the transfer.

Additionally, the resolution recognizes that SPI may want commitments
from the receiving organization to ensure that the interests of the free
software community or the Jenkins project are protected. This to me
feels like a suitable catch-all provision for the category of concerns
you're (rightly!) raising, aside from ensuring legality of course.

My strong preference is not to bother the board with two votes on this,
after we set suitable parameters and continue to oversee the officers
and other individual actors like a board should. Therefore I don't plan
to draft or propose amendments to request a confirmatory vote.

But, if any other directors feel strongly enough that it's worth two
votes, they can draft and propose such an amendment. I wouldn't oppose
it if their wording seems workable and they find it necessary in order
to vote in favor next Monday.

> > I believe the 1st choice is to transfer the assets to a 501(c)(3)
> > under the LF. This is laid out in "whereas #5",
>
> How would this proposed 501(c)(3) be governed ?
>
> Jimmy tells us that while the CDF is governed by its corporate
> members, the Jenkins project is not.
>
> Would decisions for the 501(c)(3) be made by the CDF board or the LF
> board or by Jenkins's governance structures ?

I don't know anything about the governance plans for the proposed
501(c)(3). What I meant is that, while LF and CDF have explicitly
pay-to-play governance structures in the way that is allowable for
501(c)(6) organizations, such a structure would not be approved by the
IRS for a 501(c)(3) organization. They would have basically the same
duty we do to act in the interest of the general public and not for the
private benefit of, or private inurement to, their members.

So, the mere fact of IRS approval of a 501(c)(3) mitigates a lot of the
risk in this regard.

> While it may be lawful for SPI to transfer charitable assets to
> another charity which spends those charitable funds on
> legally-charitable purposes but at the direction of for-profit
> corporations, it is not clear to me that it is ethically appropriate
> for SPI to make such a transfer.

As noted above, I think IRS approval of a 501(c)(3) would go a long way
to satisfying this concern. To whatever extent it doesn't, that's why
the resolution allows us to insist on commitments from the receiving
organization. Commitments can be legally binding if necessary, and this
might well be required due to our legal obligations if the receiving org
ends up not being a 501(c)(3).

- Jimmy Kaplowitz
jimmy(at)spi-inc(dot)org

On Mon, Jun 03, 2019 at 05:06:33PM +0100, Ian Jackson wrote:
> Adrian Bunk writes ("Re: Resolution 2019-05-25.jrk.1: Removing Jenkins as associated project"):
> > On Mon, Jun 03, 2019 at 12:15:53PM +0100, Ian Jackson wrote:
> > > While it may be lawful for SPI to transfer charitable assets to
> > > another charity which spends those charitable funds on
> > > legally-charitable purposes but at the direction of for-profit
> > > corporations, it is not clear to me that it is ethically appropriate
> > > for SPI to make such a transfer.
> >
> > These are the assets of the associated project that are only held in
> > trust by SPI.
>
> They are indeed held in trust by SPI. The terms of the trust are,
> largely, the SPI Associated Project Framework:
>
> http://www.spi-inc.org/corporate/resolutions/2004/2004-08-10.iwj.1/
>
> | money will be spent according to the instructions of (and SPI's
> | agreement with) the Project, provided that these instructions are
> | consistent with SPI's goals and legal obligations.
>
> Note the reference to SPI's goals.
>...

Which legal document or resolution does this reference?

According to Article 2 of the by-laws the purpose of SPI includes
basically everything involving computers except running a school.

> Ian.

cu
Adrian

--

"Is there not promise of rain?" Ling Tan asked suddenly out
of the darkness. There had been need of rain for many days.
"Only a promise," Lao Er said.
Pearl S. Buck - Dragon Seed