Re: Developing Software as Charity?

Let's say that I would like pay someone to Open Source a closed-source
library or pay someone to develop an Open Source library and I'd also like
to be able to claim that on my taxes as a charitable contribution.

Any idea of how to go about this or channel the money in such a way that it
is a charitable contribution?

AJ ONeal

AJ ONeal <coolaj86(at)gmail(dot)com> writes:

> Let's say that I would like pay someone to Open Source a closed-source
> library or pay someone to develop an Open Source library and I'd also
> like to be able to claim that on my taxes as a charitable
> contribution.

In general, a state will grant tax breaks for donations only if the
recipient is a charitable organisation registered as such with that
specific state.

You would need to look into the available registered charities in your
state. Which ones do you have that could accept your donation for this
purpose?

--
\ “Ignorance more frequently begets confidence than does |
`\ knowledge.” —Charles Darwin, _The Descent of Man_, 1871 |
_o__) |
Ben Finney

I was thinking more along the lines of something like this:

I suggest that a free software organization of some sort produce some sort
of software.
I donate the money necessary to fund the development of said software.

I benefit from the donation, but so does everyone else.

Perhaps there is no such organization currently in place.

AJ ONeal

On Tue, Dec 14, 2010 at 11:55 PM, Ben Finney <
bignose+hates-spam(at)benfinney(dot)id(dot)au <bignose%2Bhates-spam(at)benfinney(dot)id(dot)au>>wrote:

> AJ ONeal <coolaj86(at)gmail(dot)com> writes:
>
> > Let's say that I would like pay someone to Open Source a closed-source
> > library or pay someone to develop an Open Source library and I'd also
> > like to be able to claim that on my taxes as a charitable
> > contribution.
>
> In general, a state will grant tax breaks for donations only if the
> recipient is a charitable organisation registered as such with that
> specific state.
>
> You would need to look into the available registered charities in your
> state. Which ones do you have that could accept your donation for this
> purpose?
>
> --
> \ “Ignorance more frequently begets confidence than does |
> `\ knowledge.” —Charles Darwin, _The Descent of Man_, 1871 |
> _o__) |
> Ben Finney
>
> _______________________________________________
> Spi-general mailing list
> Spi-general(at)lists(dot)spi-inc(dot)org
> http://lists.spi-inc.org/listinfo/spi-general
>

Hi AJ,

On Wed, Dec 15, 2010 at 12:16:20AM -0700, AJ ONeal wrote:
> I was thinking more along the lines of something like this:
>
> I suggest that a free software organization of some sort produce some sort
> of software.
> I donate the money necessary to fund the development of said software.
>
> I benefit from the donation, but so does everyone else.
>
> Perhaps there is no such organization currently in place.

One thing to consider is whether the specific benefit you receive for the work
you requested would reduce or eliminate the amount of the tax benefit you might
otherwise get from any charitable contribution. Another is what complications
might arise if the transaction is deemed to be an independent contracting
relationship, or even an employment relationship (with the developer as
employee). Further still, free/open source software development may not always
qualify as a charitable activity, depending on the country. All of these
questions may have different answers depending on your specific situation and
jurisdiction.

All I can recommend is to consult a tax professional such as an accountant or
tax lawyer in the jurisdiction where you are located. If you have a specific
proposal for SPI, keeping in mind that we are a US-based nonprofit with
501(c)(3) public charity status with the Internal Revenue Service, we'd be
happy to consider it. This particular list is publically archived and indexed
by search engines; spi-private(at)lists(dot)spi-inc(dot)org is not publically archived or
indexed but is available to all SPI contributing members; and board(at)spi-inc(dot)org
will reach the SPI board of directors. Use whichever method of contact you feel
is appropriate.

- Jimmy Kaplowitz
Member, SPI Board of Directors
jimmy(at)spi-inc(dot)org

Jimmy Kaplowitz:
> Hi AJ,
>
> On Wed, Dec 15, 2010 at 12:16:20AM -0700, AJ ONeal wrote:
> > I was thinking more along the lines of something like this:
> >
> > I suggest that a free software organization of some sort produce some
> > sort of software.
> > I donate the money necessary to fund the development of said software.
> >
> > I benefit from the donation, but so does everyone else.
> >
> > Perhaps there is no such organization currently in place.
Hi,

while you're discussing this, may you also consider the opposite case? I'd
like to work full time developing free software. People who pay me for this,
should be able to deduct my payment from taxes.

There'd need to be a charity which employs me. Maybe the charity would need to
restrict it's services only to other charities for this model to work.

I'll be funemployed from march next year and plan to discuss this question
with a local tax officer. I live in Switzerland a few meters away from the
German border.

Best regards,

Thomas Koch, http://www.koch.ro

Let me know what you find out.

Right now I'm hiring some guys in India to do work for me that I'm open
sourcing[1].

The end product will use the tools that they're writing, but the whole
technology community will benefit from having these tools (which will in
turn generate more tools that I may end up using for my product).

I would be very willing to hire someone to create just about every component
of my product as an open source module and then tie the modules together
myself with a UI.

AJ ONeal

[1] https://github.com/coolaj86/mtags - Media Tags output as JSON for
consumption by JavaScript, Python, Ruby, and all other sane languages that
support JSON natively.

On Sat, Dec 18, 2010 at 3:52 AM, Thomas Koch <thomas(at)koch(dot)ro> wrote:

> Jimmy Kaplowitz:
> > Hi AJ,
> >
> > On Wed, Dec 15, 2010 at 12:16:20AM -0700, AJ ONeal wrote:
> > > I was thinking more along the lines of something like this:
> > >
> > > I suggest that a free software organization of some sort produce some
> > > sort of software.
> > > I donate the money necessary to fund the development of said software.
> > >
> > > I benefit from the donation, but so does everyone else.
> > >
> > > Perhaps there is no such organization currently in place.
> Hi,
>
> while you're discussing this, may you also consider the opposite case? I'd
> like to work full time developing free software. People who pay me for
> this,
> should be able to deduct my payment from taxes.
>
> There'd need to be a charity which employs me. Maybe the charity would need
> to
> restrict it's services only to other charities for this model to work.
>
> I'll be funemployed from march next year and plan to discuss this question
> with a local tax officer. I live in Switzerland a few meters away from the
> German border.
>
> Best regards,
>
> Thomas Koch, http://www.koch.ro
>

I was wondering the same thing.

I guess they are both tax write-offs. I'm not very experienced yet. I don't
want to bend any rules, I was just curious.

Even in the case that it weren't a charitable contribution, it would still
be nice to have an organization which helped connect passionate developers
interested in particular types of development with those willing to spend
money for it.

The problem with outsourcing, in many cases, is that you don't get someone
as passionate about what you're building. You get someone who wants a job.

With open source you know you're getting someone who really loves that type
of project.

AJ ONeal

On Sat, Dec 18, 2010 at 10:38 AM, Frank Warmerdam <warmerdam(at)pobox(dot)com>wrote:

> On 10-12-18 12:20 PM, AJ ONeal wrote:
>
>> Let me know what you find out.
>>
>> Right now I'm hiring some guys in India to do work for me that I'm open
>> sourcing[1].
>>
>> The end product will use the tools that they're writing, but the whole
>> technology community will benefit from having these tools (which will in
>> turn
>> generate more tools that I may end up using for my product).
>>
>> I would be very willing to hire someone to create just about every
>> component of
>> my product as an open source module and then tie the modules together
>> myself
>> with a UI.
>>
>
> AJ,
>
> To me this is directed development and would be very iffy for charitable
> status. I don't know SPI's position on such things, but within OSGeo
> (another foundation I am involved with) we would not accept a contribution
> for such work as something that could be considered a charitable
> contribution
> under US tax law.
>
> We do allow sponsors for projects, but the sponsors are not able to provide
> any specific direction to how the project will spend the money. Projects
> can also post activities they would like to pursue and sponsors can choose
> to fund one of these efforts specifically. But we make an effort to make
> is so that organizations cannot actively direct funds to a specific
> development they need for their own commercial reasons.
>
> Now, I'm not a lawyer, and it may be that we are being overly cautious.
> But this was based on our interpretation of a lawyer's advice and various
> "wisdom" on the net. I think you should be cautious in this regard. I
> also think SPI should be careful before volunteering to be a conduit for
> such funds though I'm not going to get mixed up in it.
>
> I'm curious, if you are getting this work done to develop a product,
> isn't it enough to treat the cost as a business expense? I'm vague
> on the advantages of making a charitable contribution vs. just writing
> something off as a business expense. In Canada I believe they normally
> amount to the same tax effect.
>
> Best regards,
> --
>
> ---------------------------------------+--------------------------------------
> I set the clouds in motion - turn up | Frank Warmerdam,
> warmerdam(at)pobox(dot)com
> light and sound - activate the windows | http://pobox.com/~warmerdam<http://pobox.com/%7Ewarmerdam>
> and watch the world go round - Rush | Geospatial Programmer for Rent
>
>