[Chapter-delegates] Follow-up on Chapters Advisory Council Meeting of 17 September 2024

Thu Oct 10 10:09:36 PDT 2024

The foundation is formally a supporting organization under nonprofit tax
law.

V

On Thu, Oct 10, 2024, 12:35 Eduardo Diaz via Chapter-delegates <
chapter-delegates at elists.isoc.org> wrote:

> IIona:
>
> From your email, I understand there is no formal "contract for services"
> between ISOC and the ISOC Foundation. Is my interpretation correct?
>
> -ed
> ISOC Puerto Rico
>
> On Thu, Oct 10, 2024 at 12:04 PM Ilona Levine via Chapter-delegates <
> chapter-delegates at elists.isoc.org> wrote:
>
>> Hi Olivier,
>>
>>
>>
>> Thank you for your follow up email. I think the use of the term
>> "outsourcing" in the email below might have caused some confusion.  You
>> mentioned you are familiar with the “supporting organizations” and how they
>> operate, but it might also be helpful for me to provide some additional
>> background for others.
>>
>> As you know, the relationship between supporting and supported
>> organizations is not a vendor or contractor relationship. Though
>> the Foundation is a separate corporation, it is a controlled subsidiary of
>> ISOC, not a third-party service provider or outside contractor.  So ISOC is
>> not “outsourcing” to the Foundation but instead, the two entities cooperate
>> to achieve the mission of the Internet Society.  In other words, as a
>> supporting organization, the Foundation’s purpose is to operate for the
>> benefit of, and to support, ISOC. In furtherance of that purpose, the
>> Foundation conducts programs and activities that benefit ISOC and furthers
>> ISOC’s mission. For example, the Foundation engages in communications
>> activities at the direction of and to the benefit of ISOC.
>>
>> As you also know based on your extensive experience with nonprofits, the
>> Internet Society Board develops the overall strategy for ISOC. Internet
>> Society management then develops its action plan and in turn, works with
>> the Foundation to ensure that it, as a supporting organization, provides
>> the support necessary to achieve ISOC’s goals. The Foundation does that
>> through its own action plan, which sets out objectives for all of its
>> functions, including the communications function.  So the Board sets the
>> strategy, Internet Society management creates the action plans, and the
>> Foundation management allocates resources to support those plans as
>> necessary.
>>
>>
>>
>> After the approval of the 2025 action plans, ISOC will share them with
>> the community.  As discussed earlier, part of that will be Chris presenting
>> to this community how the communications group will be tackling its work in
>> the upcoming year.
>>
>>
>>
>> Best regards,
>>
>> Ilona
>>
>>
>>
>> *From: *Olivier MJ Crépin-Leblond <ocl at gih.com>
>> *Date: *Tuesday, October 8, 2024 at 8:47 AM
>> *To: *Ilona Levine <levine at isoc.org>, Ted IETF <ted.ietf at gmail.com>
>> *Cc: *Chapter Delegates <Chapter-delegates at elists.isoc.org>, Sally
>> Wentworth <wentworth at isoc.org>
>> *Subject: *Re: Follow-up on Chapters Advisory Council Meeting of 17
>> September 2024
>>
>>
>>
>> Dear Ilona,
>>
>> Further to our discussion two weeks ago regarding the definition of the
>> relationship between the Internet Society and the Internet Society
>> Foundation, in the absence of your response, I wish to reiterate the need
>> for a clear outsourcing agreement between these entities. It is recognised
>> as good business practice internationally to establish such agreements to
>> delineate respective liabilities in the execution of these contracts.
>>
>> Responding to your note: "*All necessary legal documents, including
>> agreements, have been put in place to respect the separate nature of the
>> two organizations.*"
>>
>> All I am asking is for them to be shared. If that is not possible, even
>> in a redacted manner, for whatever reason, then please provide a list of
>> the agreements to which you refer, including the date of the agreement, the
>> name of the agreement, the signatory parties, and a brief description of
>> each agreement.
>>
>> Looking forward to your prompt response.
>>
>> Kindest regards,
>>
>> Olivier Crépin-Leblond
>>
>>
>> On 24/09/2024 17:22, Olivier MJ Crépin-Leblond wrote:
>>
>> Dear Ilona,
>>
>> Many thanks for your follow-up.
>>
>> The thread may not have come all through. During the Chapter Advisory
>> Council call, Ted mentioned the transfer of some responsibilities in
>> relation to Communications from the Internet Society to the Internet
>> Society Foundation. My initial question to Ted was in regards to the
>> outsourcing agreement as follows:
>>
>>
>>
>> *"I was previously unaware of this change. Although the Internet Society
>> Foundation may have been designated by the Internet Society as a
>> "supporting organisation" of the Internet Society, it remains a distinct
>> and separate legal entity. Therefore, I assume that any "outsourcing" of
>> responsibilities such as Marketing and/or Communications would be defined
>> in a written "contract for services" between the Parties setting out
>> (inter-alia) the terms, rights, and obligations of each Party. Could you
>> please provide the terms for such an agreement and any limitations therein?
>> My principal concern lies in distinguishing between executing the
>> Communications Plan and drafting the Communications Plan. These are
>> fundamentally different tasks and would undoubtedly be included in the
>> "contract for services"".*
>>
>> The top level responsibility of the strategy of the Internet Society
>> remains within the Internet Society. I find it surprising that an
>> outsourcing entity would be able to dictate that strategy without it being
>> agreed by the Internet Society itself.
>> The Internet Society has the opportunity to outsource the execution of
>> its Communications Plan to a supporting organisation on the basis of terms
>> and conditions agreed between the parties. This requires outsourcing
>> agreement(s) in order to know where the boundaries and responsibilities are
>> between the two organisations, including their respective liabilities in
>> the execution of these agreement(s).
>>
>> For example:
>>
>>
>> Key Components of an Outsourcing Communications Agreement
>>
>>    1. *Introduction and Definitions*:
>>
>>
>>    - Clearly define the parties involved.
>>       - Provide definitions for key terms used throughout the agreement.
>>
>>
>>    2. *Scope of Services*:
>>
>>
>>    - Detail the specific services to be outsourced.
>>       - Include service level agreements (SLAs) to set performance
>>       standards.
>>
>>
>>    3. *Term and Termination*:
>>
>>
>>    - Specify the duration of the agreement.
>>       - Outline conditions for termination by either party.
>>
>>
>>    4. *Pricing and Payment Terms*:
>>
>>
>>    - Define the pricing structure and payment schedule.
>>       - Include any penalties for late payments or performance failures.
>>
>>
>>    5. *Confidentiality and Data Protection*:
>>
>>
>>    - Ensure compliance with data protection laws.
>>       - Include confidentiality clauses to protect sensitive information.
>>
>>
>>    6. *Intellectual Property Rights*:
>>
>>
>>    - Clarify the ownership of any intellectual property created during
>>       the agreement.
>>
>>
>>    7. *Warranties and Liability*:
>>
>>
>>    - Outline the warranties provided by the service provider.
>>       - Define the liability limits for both parties.
>>
>>
>>    8. *Monitoring and Reporting*:
>>
>>
>>    - Establish how performance will be monitored and reported.
>>       - Include provisions for regular review meetings.
>>
>>
>>    9. *Dispute Resolution*:
>>
>>
>>    - Specify the process for resolving disputes.
>>       - Include mediation or arbitration clauses if applicable.
>>
>>
>>    10. *Exit Management*:
>>
>>
>>    - Plan for the transition of services back to the company or to
>>       another provider.
>>       - Include provisions for the transfer of data and assets.
>>
>>
>>
>> I trust that you mentioned: "All necessary legal documents, including
>> agreements, have been put in place to respect the separate nature of the
>> two organizations."
>> Thus I would be interested in its details as explained in my email.
>>
>> Kindest regards,
>>
>> Olivier
>>
>> On 23/09/2024 18:36, Ilona Levine wrote:
>>
>> Dear Olivier,
>>
>> I understand that the nature of your request is to assist the Chapters
>> Advisory Council and Chris Locke in preparation to his session on the
>> communication plan. The agreement in place since 2018 between the
>> Foundation and Internet Society focuses on the legal obligations in line
>> with the Foundation's role as a 509(a)(3) and therefore, won’t be useful
>> for that purpose.
>>
>> Best regards,
>>
>> Ilona
>>
>>
>>
>> *From: *Olivier MJ Crépin-Leblond <ocl at gih.com> <ocl at gih.com>
>> *Date: *Sunday, September 22, 2024 at 8:52 AM
>> *To: *Ilona Levine <levine at isoc.org> <levine at isoc.org>, Ted IETF
>> <ted.ietf at gmail.com> <ted.ietf at gmail.com>
>> *Cc: *Chapter Delegates <Chapter-delegates at elists.isoc.org>
>> <Chapter-delegates at elists.isoc.org>, Sally Wentworth <wentworth at isoc.org>
>> <wentworth at isoc.org>
>> *Subject: *Re: Follow-up on Chapters Advisory Council Meeting of 17
>> September 2024
>>
>>
>>
>> Dear Ilona,
>>
>> thank you for clarifying that all necessary legal documents, including
>> agreements, have been duly executed to respect the separate nature of the
>> two organisations.
>>
>> I am aware of the publication of the original IETF Administration LLC
>> agreements with the Internet Society, specifically:
>> IETF-ISOC Funding Agreement (2020)
>> <https://www.ietf.org/media/documents/IETF_Funding_Agreement_-_Executed_-_20201123.pdf>
>> IETF-ISOC Funding Agreement Amendment (2020)
>> <https://www.ietf.org/media/documents/IETF_ISOC_Funding_Amendment_Amendment_-_20201222.pdf>
>> IETF-ISOC Funding Agreement Amended and Restated (2024)
>> <https://www.ietf.org/media/documents/ISOC-IETF_Amended_Funding_Agreement_-_20240103_-_Redacted_Executed.pdf>
>>
>> These documents are accessible on the IETF Administration LLC’s website
>> at https://www.ietf.org/administration/overview/.
>>
>> Could you kindly confirm whether the agreements between the Foundation
>> and the Internet Society are also publicly available? I have been unable to
>> locate them on either website.
>>
>> I would appreciate it if you could provide a list of the agreements to
>> which you refer, including the date of the agreement, the name of the
>> agreement, the signatory parties, and a brief description of each agreement.
>>
>> I look forward to your kind response.
>>
>> Kindest regards,
>>
>> Olivier
>>
>>
>> On 20/09/2024 19:48, Ilona Levine wrote:
>>
>> Hi Olivier, thank you for your follow up email.  You noted that you are
>> aware of the tax requirements that apply to supporting organizations.
>> Mainly, those requirements relate to supporting the mission of its
>> supported entities.  In this case, the Internet Society.
>>
>>
>>
>> As part of that support, the Foundation provides grants to other
>> organizations that have missions consistent with the Internet Society’s in
>> order to fund programs that further the Internet Society’s purposes. The
>> Foundation also engages in activities that support Internet Society
>> directly. For example, the Foundation engages in fundraising and
>> communication activities for the benefit of the Internet Society.
>>
>>
>>
>> As you also pointed out, the Foundation is a separate legal entity.  It
>> is a controlled subsidiary of Internet Society.  All necessary legal
>> documents, including agreements, have been put in place to respect the
>> separate nature of the two organizations.
>>
>>
>>
>> I trust this answers your question.
>>
>>
>>
>> Best regards,
>>
>> Ilona
>>
>>
>>
>> *Ilona Levine,* SVP, General Counsel and Corporate Secretary
>>
>> levine at isoc.org|
>> internetsociety.org | @internetsociety
>>
>> Donate today. <https://bit.ly/3nUsQmJ>
>>
>> *Help protect the Internet for everyone.*
>>
>>
>>
>> [image:
>> https://backchannel.internetsociety.org/wp-content/uploads/2020/01/image001.png]
>>
>> This communication is the property of the Internet Society and may
>> contain confidential or privileged information.  Unauthorized use of this
>> communication is strictly prohibited.  If you have received it in error,
>> please notify the sender by reply e-mail and destroy all copies of the
>> communication and any attachments.
>>
>>
>>
>>
>>
>>
>>
>> *From: *Olivier MJ Crépin-Leblond <ocl at gih.com> <ocl at gih.com>
>> *Date: *Friday, September 20, 2024 at 11:38 AM
>> *To: *Ted IETF <ted.ietf at gmail.com> <ted.ietf at gmail.com>, Ilona Levine
>> <levine at isoc.org> <levine at isoc.org>
>> *Cc: *Chapter Delegates <Chapter-delegates at elists.isoc.org>
>> <Chapter-delegates at elists.isoc.org>, Sally Wentworth <wentworth at isoc.org>
>> <wentworth at isoc.org>
>> *Subject: *Re: Follow-up on Chapters Advisory Council Meeting of 17
>> September 2024
>>
>>
>>
>> Dear Ted,
>>
>> thank you for your follow-up on this matter. I am aware of the special
>> tax terms in relation to "supporting organisations".
>>
>> That being said, the Internet Society Foundation is a distinct and
>> separate legal entity to the Internet Society, irrespective of the
>> relationship between them. As a result, any outsourcing task undertaken by
>> one, for the other entity, would be defined in a contract, whether written,
>> verbal or otherwise. If not, there is a lack of clarity and expectations
>> about the relationship, which brings potential liability and risk that both
>> entities are subjected to, in relation to the other's actions. Any lawyer
>> would tell you that it is highly advisable to have a written contract, if
>> only for legal protection.
>>
>> Thanks for letting me know that you are travelling. I am copying
>> President and CEO Sally Wentworth in case you're unavailable for a length
>> of time.
>>
>> Kindest regards,
>>
>> Olivier
>>
>> On 20/09/2024 13:12, Ted Hardie wrote:
>>
>> Hi Olivier,
>>
>>
>>
>> A supporting organization is a term of art in US tax law, please see:
>>
>>
>>
>>
>> https://www.irs.gov/charities-non-profits/charitable-organizations/supporting-organizations-requirements-and-types
>>
>>
>>
>> and
>>
>>
>>
>>
>> https://www.irs.gov/charities-non-profits/section-509a3-supporting-organizations
>>
>>
>>
>> Explaining how the two relate is complicated enough that there are legal
>> briefs on it; I have cc'ed the Society's chief counsel in case you would
>> like that level of detail.  The summary, however, is that a supporting
>> organization is a charity because it supports the charitable purpose of the
>> main organization.  As a result, it can provide services to the main
>> organization under the special tax rules noted above.
>>
>>
>>
>> Note that I am traveling and will generally be slow to respond for a few
>> days, but hopefully the links above will get you started and Ilona can
>> provide more detailed legal information as needed.
>>
>>
>>
>> regards,
>>
>>
>>
>> Ted Hardie
>>
>>
>>
>>
>>
>> On Fri, Sep 20, 2024 at 6:24 AM Olivier MJ Crépin-Leblond <ocl at gih.com>
>> wrote:
>>
>> Dear Ted,
>>
>>
>> During this week’s Chapters Advisory Council call, you mentioned that the
>> Internet Society Foundation, as a "supporting organisation" of the Internet
>> Society, is managing the communications department for the Internet
>> Society.
>>
>> Upon seeking clarification, you explained that the Internet Society
>> Foundation comprises two elements: one philanthropic (grant-making) and the
>> other as a "supporting organisation" of the Internet Society. "This implies
>> that many of the supporting functions for the Internet Society as a whole
>> are now part of the Foundation, primarily because the Foundation can
>> provide these services to the Internet Society at no cost".
>>
>> You further elaborated that this "arrangement" allows the Internet
>> Society to allocate its budget more effectively.
>>
>> I was previously unaware of this change. Although the Internet Society
>> Foundation may have been designated by the Internet Society as a
>> "supporting organisation" of the Internet Society, it remains a distinct
>> and separate legal entity. Therefore, I assume that any "outsourcing" of
>> responsibilities such as Marketing and/or Communications would be defined
>> in a written "contract for services" between the Parties setting out
>> (inter-alia) the terms, rights, and obligations of each Party. Could you
>> please provide the terms for such an agreement and any limitations therein?
>>
>> My principal concern lies in distinguishing between executing the
>> Communications Plan and drafting the Communications Plan. These are
>> fundamentally different tasks and would undoubtedly be included in the
>> "contract for services".
>>
>> The "contract for services" (together with any relevant supporting
>> information) will be helpful input for both the Chapters Advisory Council
>> and also for Chris Locke and his Team (including for the current "branding"
>> presentations) in preparation for the promised session from Chris Locke to
>> the Chapters Advisory Council.
>>
>> I look forward to your response and to receiving a copy of the "contract
>> for services" agreement, together with any relevant supporting information
>> as requested above.
>>
>> Kindest regards,
>>
>> Olivier
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>> _______________________________________________
>> As an Internet Society Chapter Officer you are automatically subscribed
>> to this list, which is regularly synchronized with the Internet Society
>> Chapter Portal (AMS): https://community.internetsociety.org.
>> -
>> View the Internet Society Code of Conduct:
>> https://www.internetsociety.org/become-a-member/code-of-conduct/
>>
>
>
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