[ALAC] ICANN as a 501(c)(3) Organisation
Olivier MJ Crepin-Leblond
ocl at gih.com
Tue Apr 25 16:45:24 UTC 2017
Indeed, the Global Domains Division (GDD) is indeed a fully owned
division of ICANN. It is the part of ICANN that deals with contractual
work with all contracted parties. (Registries and Registrars). Its
portal is on: http://gddportal.icann.org/
Kindest regards,
Olivier
On 25/04/2017 16:03, Seun Ojedeji wrote:
> 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
> <mailto: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
> <mailto: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
> <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
> <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
> <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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--
Olivier MJ Crépin-Leblond, PhD
http://www.gih.com/ocl.html
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