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

Mon May 8 13:43:58 UTC 2017

+1

-Carlton

==============================
*Carlton A Samuels*

*Mobile: 876-818-1799Strategy, Planning, Governance, Assessment &
Turnaround*
=============================

On Sun, Apr 30, 2017 at 9:03 PM, Holly Raiche <h.raiche at internode.on.net>
wrote:

> Trust me, Kaili.  This is a debate that is a long standing one that won’t
> be settled quickly or easily.
>
> One view says that ICANN cannot be a regulator in the traditional sense of
> the word.  It was not created by legislation, but rather by agreement in
> the first instance, and latterly, its ‘power’, if you can use the term,
> comes from both its contractual relationship with registrars and
> registries, and the voluntary membership of other organisations.  Another
> equally important and valid view of ICANN is that its function is that of a
> global regulator of the DNS system, regardless of structure.
>
> Yes, the question is very well defined, and has been the subject of much
> debate.  And Steve Cocker is well aware of those debates, which is why he
> used the language he is.
>
> I think everyone within the ICANN community is well aware of what ICANN
> does/can do.  What you will not reach agreement on is the term you use to
> describe it.
>
> Holly
>
> On 1 May 2017, at 11:29 am, Kan Kaili <kankaili at gmail.com> wrote:
>
> Hi,
>
> As ICANN CEO visited China last week, I raised a question during the
> meeting:  Exactly what is ICANN?
>
> According to what ICANN does, it is a de facto REGULATOR serving the
> public interest by regulating the DNS industry.
>
> However, he flatly denied that, saying ICANN is a "stock exchange".
>
> As I see it, this is a fundamental undefined question of ICANN.  Even
> during the openning speech in Copenhagen, Steve Croker said "whatever ICANN
> is ..."
>
> However, this question leads to the position and weight of ALAC, and the
> consumers'/end-users' interests, within ICANN, including the number of
> seats on the Board, budget allocation, etc.
>
> Thus, I hope this question at least could be clarified within the At-Large
> community, before we can make it clear in ICANN.
>
> Thank you.
>
> Kaili
>
>
>
>
> ----- Original Message -----
> *From:* Olivier MJ Crepin-Leblond <ocl at gih.com>
> *To:* ALAC Working List <alac at atlarge-lists.icann.org>
> *Sent:* Tuesday, April 25, 2017 2:10 PM
> *Subject:* [ALAC] ICANN as a 501(c)(3) Organisation
>
> 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.
>
> I really think that we should fully play this card when it comes down to
> use of funds in ICANN. The At-Large Community is part of this "promoting
> the global public interest" and we need to remind everyone about this
> regularly.
>
>
> Kindest regards,
>
>
> Olivier
>
>
>
> ------------------------------
>
> _______________________________________________
> ALAC mailing list
> ALAC at atlarge-lists.icann.org
> https://atlarge-lists.icann.org/mailman/listinfo/alac
>
> At-Large Online: http://www.atlarge.icann.org
> ALAC Working Wiki: https://community.icann.org/display/atlarge/At-Large+
> Advisory+Committee+(ALAC)
>
> _______________________________________________
> ALAC mailing list
> ALAC at atlarge-lists.icann.org
> https://atlarge-lists.icann.org/mailman/listinfo/alac
>
> At-Large Online: http://www.atlarge.icann.org
> ALAC Working Wiki: https://community.icann.org/display/atlarge/At-Large+
> Advisory+Committee+(ALAC)
>
>
>
> _______________________________________________
> ALAC mailing list
> ALAC at atlarge-lists.icann.org
> https://atlarge-lists.icann.org/mailman/listinfo/alac
>
> At-Large Online: http://www.atlarge.icann.org
> ALAC Working Wiki: https://community.icann.org/display/atlarge/At-Large+
> Advisory+Committee+(ALAC)
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://atlarge-lists.icann.org/pipermail/alac/attachments/20170508/e613b1fe/attachment.html>