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

[Olivier MJ Crépin-Leblond]

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
>
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