[Chapter-delegates] Various fundraising stuff (was Re: ISOC's regional engagement)

[Andrew Sullivan]

Hi,

On Wed, Sep 20, 2023 at 03:11:54PM +0100, Christian de Larrinaga via Chapter-delegates wrote:
>
>Firstly I do think it is really important that ISOC has broad user buy
>in and does so globally and that it can show that off.
>
>So the fact that other incomes are not growing sufficiently is a worry
>that no doubt is being worked on.

Yes.  But I also think that we have a history in which even our own members are sceptical that we need contributions, however small.  I am acutely aware that there are lots of members of the Internet Society who are in no position to give us anything.  But I am equally aware that we have members who certainly could make a small contribution, and don't.  That's harmful to us.

>But does this US 501.3 c rule require that PIR have to only fund another US
>based 501.3c or could the community form regional "ISOCs" with
>charitable purposes and allow PIR to spread the load so to speak?

It's actually way more complicated than that.

PIR is a supporting organization of the Internet Society.  Supporting organizations and supported organizations are another fascinating part of US not-for-profit tax law that I never imagined I would know anything about!  One feature of a supporting organization is that it does not have an independent public support test obligation on its own (so this is the case for PIR and also true of the Internet Society Foundation).  _But_, to be free of that obligation, the supporting organizations are much more tightly constrained in what they are permitted to fund.  There are rules around what is a permissible beneficiary.  It would be possible to construct a strategy along the lines you mention, I imagine, but it might not help as much as desired because of the possible constraints on such organizations. (This is, in effect, one of the wrinkles in the way the Foundation works.)

>Is PIR funding ISOC that then funds the ISOC Foundation?
>Or is PIR funding ISOC and separately the ISOC Foundation?

PIR contributes directly to the Internet Society and to the Foundation, but this is permissible precisely because the Foundation is a supporting organization of the Internet Society.

>Lastly - One of the big improvements with what I would expect marketable
>gains at ISOC in recent years has been the subject matter expertise that
>ISOC has fostered internally.
>
>Are these programs marketed to attract participant / beneficiary income
>flows ?

Yes, but it is taking time to attract that support.  Also, an _awful_ lot of what people want is specific expertise on specific things, and that makes the engagement not a contribution but a fee for service.  Fee for service arrangements turn into what's called "unrelated business income" in our books, and that revenue has two problems.  First, it does contribute to the overall revenue (and not public support), but it is also taxable (whereas charitable contributions are not).  

Best regards,

A

-- 
Andrew Sullivan, President & CEO, Internet Society
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