[ALAC] ICANN as a 501(c)(3) Organisation

[Seun Ojedeji]

If this means global domains division yes I believe it still is very much
within ICANN. The upcoming GDD Summit seem to confirm that as well [1].
IANA department is the one which is now incorporated as PTI.

Regards
1.
https://digitalwatch.giplatform.org/events/global-domains-division-industry-summit-2017

On Apr 25, 2017 14:49, "Gbruen" <gbruen at knujon.com> wrote:

> Olivier, do you know if GDD is still part of the larger organization or
> has it been Incorporated separately?
>
>
> *Sent from my Verizon Wireless 4G LTE Droid*
> On Apr 25, 2017 2:10 AM, Olivier MJ Crepin-Leblond <ocl at gih.com> wrote:
>
> Dear Alan,
>
> as a follow-up to my explanation on the ALAC mailing list about ICANN
> being a 501(c)(3) organisation, the relevant Article of Incorporation
> paragraph is:
> (Ref: https://www.icann.org/resources/pages/governance/articles-en )
>
>
>
>
>
>
>
> *Article 2.I.II: This Corporation is a nonprofit public benefit
> corporation and is not organized for the private gain of any person. It is
> organized under the Nonprofit Public Benefit Corporation Law for charitable
> and public purposes. The Corporation is organized, and will be operated,
> exclusively for charitable, educational, and scientific purposes within the
> meaning of § 501(c)(3) of the Internal Revenue Code of 1986, as amended
> (the “Code”), or the corresponding provision of any future United States
> tax code. Any reference in these Articles to the Code shall include the
> corresponding provisions of any future United States tax code. In
> furtherance of the foregoing purposes, and in recognition of the fact that
> the Internet is an international network of networks, owned by no single
> nation, individual or organization, the Corporation shall, except as
> limited by Article IV hereof, pursue the charitable and public purposes of
> lessening the burdens of government and promoting the global public
> interest in the operational stability of the Internet by carrying out the
> mission set forth in the bylaws of the Corporation (“Bylaws”). Such global
> public interest may be determined from time to time.  Any determination of
> such global public interest shall be made by the multistakeholder community
> through an inclusive bottom-up multistakeholder community process. Article
> 2.IV: Notwithstanding any other provision of these Articles: a. The
> Corporation shall not carry on any other activities not permitted to be
> carried on (i) by a corporation exempt from United States income tax under
> § 501(c)(3) of the Code or (ii) by a corporation, contributions to which
> are deductible under § 170(c)(2) of the Code. b. No substantial part of the
> activities of the Corporation shall be the carrying on of propaganda, or
> otherwise attempting to influence legislation, and the Corporation shall be
> empowered to make the election under § 501 (h) of the Code.*
>
> So what does the § 501(c)(3) tax code say? http://bit.ly/1Va1vVt
>
> To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an
> organization must be organized
> <https://www.irs.gov/charities-non-profits/charitable-organizations/organizational-test-internal-revenue-code-section-501c3>
> and operated
> <https://www.irs.gov/charities-non-profits/charitable-organizations/operational-test-internal-revenue-code-section-501c3>
> exclusively for exempt purposes
> <https://www.irs.gov/charities-non-profits/charitable-organizations/exempt-purposes-internal-revenue-code-section-501c3>
> set forth in section 501(c)(3), and none of its earnings may inure
> <https://www.irs.gov/charities-non-profits/charitable-organizations/inurement-private-benefit-charitable-organizations>
> to any private shareholder or individual.
>
>
> Exempt purposes:
>
> https://www.irs.gov/charities-non-profits/charitable-
> organizations/exempt-purposes-internal-revenue-code-section-501c3
>
> *The exempt purposes set forth in section 501(c)(3) are charitable,
> religious, educational, scientific, literary, testing for public safety,
> fostering national or international amateur sports competition, and
> preventing cruelty to children or animals.  The term charitable is used in
> its generally accepted legal sense and includes relief of the poor, the
> distressed, or the underprivileged; advancement of religion; advancement of
> education or science; erecting or maintaining public buildings, monuments,
> or works; lessening the burdens of government; lessening neighborhood
> tensions; eliminating prejudice and discrimination; defending human and
> civil rights secured by law; and combating community deterioration and
> juvenile delinquency.*
>
> So "lessening the burdens of government" is clearly the key reason for
> ICANN to operate as 501(c)(3), but as you can see there are other possible
> purposes. (As a side track, it is particularly important to note the
> "global public interest" part of the mission which is still undefined and
> unresolved.)
>
> With the new gTLD program generating a large income, ICANN needs to be
> very careful and show sustained support for "lessening the burdens of
> government" - thus support all sorts of Internet-related activities outside
> of ICANN. Not doing so, it could be accused of "excess benefit
> transactions" https://www.irs.gov/charities-non-profits/charitable-
> organizations/intermediate-sanctions-excess-benefit-transactions and be
> sanctioned. ICANN needs to walk a very fine line on this. I am not a US tax
> attorney and have very little knowledge of the matter, but it is my
> understanding that if ICANN was to stop supporting initiatives in the wider
> Internet ecosystem space, activities related to ICANN but not *strictly*
> relating to Names and Numbers, it would risk losing its 501(c)(3) status.
>
> This loss of 501(c)(3) status is completely independent of the point of
> view that some are holding that ICANN is spending too much money outside
> ICANN core activities.
>
> It is also worth noting that adhering to the conditions for retaining
> 501(c)(3) status will be a key issue for the allocation of Auction funds.
>
>
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