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

From: Jimmy Kaplowitz <jimmy(at)spi-inc(dot)org>
To: Theodore Ts'o <tytso(at)mit(dot)edu>
Cc: board(at)spi-inc(dot)org, spi-general(at)lists(dot)spi-inc(dot)org, Ian Jackson <ijackson(at)chiark(dot)greenend(dot)org(dot)uk>, secretary(at)spi-inc(dot)org
Subject: Re: Resolution 2019-05-25.jrk.1: Removing Jenkins as associated project
Date: 2019-05-31 17:21:30
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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


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