[Owasp-leaders] OWASP charitable status (was: Re: OWASP Election)

Jim Manico jim.manico at owasp.org
Sun Oct 11 07:12:28 UTC 2015

Robert "everyone is doing it" is a good reason to potentially research this more, but at the same time it's a bit creepy to hear that phrase uttered.

Another thing to consider is that trade associations cannot at all compete with it's members. Per my understanding we would have to at least drop conference training since it competes with its members.

While I think this is a horrifically bad idea, I am happy to facilitate looking more closely into this. If you would like we can call the IRS charity customer support or similar together and ask questions and report back to the community. And since I've been quite aggressive in this conversation I'd also be happy to hire a lawyer that specializes in this area (at my personal expense) so we can ask pointed questions.



Unlike 501(c)(3) charities, which can operate ancillary activities such as festivals or bake sales for profit, a 501(c)(6) organization may not oversee any profit-generating enterprises. The organization is also prohibited from offering the same type of services or products sold by its membership. For example, an association of optometrists may only work to improve the industry as a whole. If the organization examines patients or sells eyeglasses, it may lose its 501(c)(6) tax exemption.

Jim Manico
Global Board Member
OWASP Foundation
Join me in Rome for AppSecEU 2016!

> On Oct 11, 2015, at 5:55 AM, Robert Shullich <robert.shullich at owasp.org> wrote:
> In the USA "anyone" is not true.
> As a 501 c(3) anyone donating, may be eligible to deduct - within certain limits and thresholds - under a Schedule A under charitable donations, which means you also need to itemize your 1040.
> Corporate sponsors on the other hand would not be doing this. They would most likely be deducting sponsorships as business expenses.
> Also, individuals - even if not a 501 c(3) - can deduct dues and probably some donations as business expenses, which requires a Schedule C (if they run a business) or as an individual, itemize on a schedule A but is subject to anything over 2% 
> So in the USA I don't see corporate sponsorship being affected. I have no idea why we would lose 25% of membership, 
> As I said before, and no one seemed to have any opinion or comment -
> Is to consider making a 501c6 organization for OWASP for the membership and keep the OWASP foundation mainly for receiving and managing donations
> The concept of having the membership as a 501c6 and a side foundation as a 501c3 is the current structure of ASIS, (ISC)2, and ISACA, to name a few. I don't see converting OWASP  to this model as impossible, but will take a lot of work, budget, and filing new corporate papers as well as new tax determination letters.
> As a 501c6 - OWASP would still be tax exempt non profit, but not a charitable organization. The foundation would remain a charitable non-profit and still collect donations, and should be able to pass most of those donations over to the 501c6.
> I don't know what the advantages of doing this, but almost everyone else is doing this, even universities, so there must be some benefit.
> Sent from my iPhone
> Robert Shullich, CPP, CISSP, CISM, GSEC, CIPP/US
> Enterprise Security Architect
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>> On Oct 10, 2015, at 8:40 PM, Kevin W. Wall <kevin.w.wall at gmail.com> wrote:
>> On Thu, Oct 8, 2015 at 2:36 PM, Jim Manico <jim.manico at owasp.org> wrote
>>> Larry Conklin wrote:
>>>> Hey Jim can you please list what we would loose (we don't really gain
>>>> anything but we lose a lot.) if we moved to a 501(c)(6) organization?
>>> OWASP would lose 25% of of it's active membership, including myself, if it
>>> stopped being a charity. Also, anyone donating money to OWASP would lose the
>>> ability to deduct those funds. Trade associations are mostly vendor run and
>>> self funded. This is the exact opposite direction I think OWASP should be
>>> going in, IMO.
>> Apologies for joining this thread late; I'm way behind on personal emails.
>> If it's true that "anyone donating money to OWASP would lose the
>> ability to deduct those funds", then my speculation is that OWASP would
>> loose a significant portion of its corporate sponsored funding. At least
>> that seems the logical conclusion if Jim's statement is true.
>> It seems that this is one part of the decision that hasn't been
>> mentioned though.
>> -kevin
>> -- 
>> Blog: http://off-the-wall-security.blogspot.com/
>> NSA: All your crypto bit are belong to us.
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