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<DIV><FONT face=宋体>"What you will not reach agreement on is the term you use to
describe it." :)</FONT></DIV>
<DIV><FONT face=宋体></FONT> </DIV>
<DIV><FONT face=宋体>Thank you, Holly!</FONT></DIV>
<DIV><FONT face=宋体></FONT> </DIV>
<DIV><FONT face=宋体>Kaili</FONT></DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
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<DIV style="FONT: 9pt 宋体">----- Original Message ----- </DIV>
<DIV style="FONT: 9pt 宋体; BACKGROUND: #e4e4e4; font-color: black"><B>From:</B>
<A title=h.raiche@internode.on.net
href="mailto:h.raiche@internode.on.net">Holly Raiche</A> </DIV>
<DIV style="FONT: 9pt 宋体"><B>To:</B> <A title=kankaili@gmail.com
href="mailto:kankaili@gmail.com">Kan Kaili</A> </DIV>
<DIV style="FONT: 9pt 宋体"><B>Cc:</B> <A title=ocl@gih.com
href="mailto:ocl@gih.com">Olivier Crepin-Leblond</A> ; <A
title=alac@atlarge-lists.icann.org
href="mailto:alac@atlarge-lists.icann.org">ALAC Working List</A> </DIV>
<DIV style="FONT: 9pt 宋体"><B>Sent:</B> Monday, May 01, 2017 10:03 AM</DIV>
<DIV style="FONT: 9pt 宋体"><B>Subject:</B> Re: [ALAC] ICANN as a 501(c)(3)
Organisation</DIV>
<DIV><BR></DIV>Trust me, Kaili. This is a debate that is a long standing
one that won’t be settled quickly or easily.
<DIV><BR></DIV>
<DIV>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.</DIV>
<DIV><BR></DIV>
<DIV>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.</DIV>
<DIV><BR></DIV>
<DIV>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.</DIV>
<DIV><BR></DIV>
<DIV>Holly</DIV>
<DIV><BR>
<DIV>
<DIV>On 1 May 2017, at 11:29 am, Kan Kaili <<A
href="mailto:kankaili@gmail.com">kankaili@gmail.com</A>> wrote:</DIV><BR
class=Apple-interchange-newline>
<BLOCKQUOTE type="cite">
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<DIV><FONT size=2 face=宋体>Hi,</FONT></DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
<DIV><FONT size=2 face=宋体>As ICANN CEO visited China last week, I raised
a question during the meeting: Exactly what is ICANN?</FONT></DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
<DIV><FONT size=2 face=宋体>According to what ICANN does, it is a de facto
REGULATOR serving the public interest by regulating the DNS
industry. </FONT></DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
<DIV><FONT size=2 face=宋体>However, he flatly denied that, saying ICANN
is a "stock exchange".</FONT></DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
<DIV><FONT size=2 face=宋体>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 ..." </FONT></DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
<DIV><FONT size=2 face=宋体>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.</FONT></DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
<DIV><FONT size=2 face=宋体>Thus, I hope this question at least could be
clarified within the At-Large community, before we can make it clear in
ICANN.</FONT></DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
<DIV><FONT size=2 face=宋体>Thank you.</FONT></DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
<DIV><FONT size=2 face=宋体>Kaili</FONT></DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
<DIV><FONT size=2 face=宋体></FONT> </DIV>
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<DIV style="FONT: 9pt 宋体">----- Original Message -----</DIV>
<DIV
style="BACKGROUND-COLOR: rgb(228,228,228); FONT: 9pt 宋体"><B>From:</B><SPAN
class=Apple-converted-space> </SPAN><A title=ocl@gih.com
href="mailto:ocl@gih.com">Olivier MJ Crepin-Leblond</A></DIV>
<DIV style="FONT: 9pt 宋体"><B>To:</B><SPAN
class=Apple-converted-space> </SPAN><A
title=alac@atlarge-lists.icann.org
href="mailto:alac@atlarge-lists.icann.org">ALAC Working List</A></DIV>
<DIV style="FONT: 9pt 宋体"><B>Sent:</B><SPAN
class=Apple-converted-space> </SPAN>Tuesday, April 25, 2017 2:10
PM</DIV>
<DIV style="FONT: 9pt 宋体"><B>Subject:</B><SPAN
class=Apple-converted-space> </SPAN>[ALAC] ICANN as a 501(c)(3)
Organisation</DIV>
<DIV><BR></DIV>Dear Alan,<BR><BR>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:<BR>(Ref:<SPAN
class=Apple-converted-space> </SPAN><A class=moz-txt-link-freetext
href="https://www.icann.org/resources/pages/governance/articles-en">https://www.icann.org/resources/pages/governance/articles-en</A><SPAN
class=Apple-converted-space> </SPAN>)<BR><BR><I><FONT
color=#3366ff>Article 2.I.II:<BR>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 “<STRONG>Code</STRONG>”), 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<SPAN
class=Apple-converted-space> </SPAN><U>Article IV</U><SPAN
class=Apple-converted-space> </SPAN>hereof, pursue the charitable and
public purposes of<SPAN
class=Apple-converted-space> </SPAN><B>lessening the burdens of
government and promoting the global public interest<SPAN
class=Apple-converted-space> </SPAN></B>in the operational stability
of the Internet by carrying out the mission set forth in the bylaws of the
Corporation (“<STRONG>Bylaws</STRONG>”). 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.<BR><BR>Article 2.IV:<BR>Notwithstanding any other provision of
these Articles:<SPAN class=Apple-converted-space> </SPAN><BR>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.<BR>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.</FONT></I>
<P>So what does the § 501(c)(3) tax code say?<SPAN
class=Apple-converted-space> </SPAN><A class=moz-txt-link-freetext
href="http://bit.ly/1Va1vVt">http://bit.ly/1Va1vVt</A></P>
<P>To be tax-exempt under section 501(c)(3) of the Internal Revenue Code,
an organization must be<SPAN class=Apple-converted-space> </SPAN><A
href="https://www.irs.gov/charities-non-profits/charitable-organizations/organizational-test-internal-revenue-code-section-501c3">organized</A><SPAN
class=Apple-converted-space> </SPAN>and<SPAN
class=Apple-converted-space> </SPAN><A
href="https://www.irs.gov/charities-non-profits/charitable-organizations/operational-test-internal-revenue-code-section-501c3">operated</A>exclusively
for<SPAN class=Apple-converted-space> </SPAN><A
href="https://www.irs.gov/charities-non-profits/charitable-organizations/exempt-purposes-internal-revenue-code-section-501c3">exempt
purposes</A><SPAN class=Apple-converted-space> </SPAN>set forth in
section 501(c)(3), and none of its earnings may<SPAN
class=Apple-converted-space> </SPAN><A
href="https://www.irs.gov/charities-non-profits/charitable-organizations/inurement-private-benefit-charitable-organizations">inure</A><SPAN
class=Apple-converted-space> </SPAN>to any private shareholder or
individual.</P>
<P><BR></P>
<P>Exempt purposes:</P>
<P><A class=moz-txt-link-freetext
href="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</A></P>
<P><I><FONT color=#3366ff>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<SPAN
class=Apple-converted-space> </SPAN><EM>charitable</EM><SPAN
class=Apple-converted-space> </SPAN>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;<SPAN class=Apple-converted-space> </SPAN><B>lessening the
burdens of government</B>; lessening neighborhood tensions; eliminating
prejudice and discrimination; defending human and civil rights secured by
law; and combating community deterioration and juvenile
delinquency.</FONT></I></P>
<P><FONT color=#3366ff>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.)</FONT></P>
<P><FONT color=#3366ff>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"<SPAN
class=Apple-converted-space> </SPAN><A class=moz-txt-link-freetext
href="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</A><SPAN
class=Apple-converted-space> </SPAN>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.<BR></FONT></P>
<P><FONT color=#3366ff>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.<SPAN
class=Apple-converted-space> </SPAN><BR></FONT></P>
<P><FONT color=#3366ff>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.<BR></FONT></P>
<P><FONT color=#3366ff>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.</FONT></P>
<P><FONT color=#3366ff><BR></FONT></P>
<P><FONT color=#3366ff>Kindest regards,</FONT></P>
<P><FONT color=#3366ff><BR></FONT></P>
<P><FONT color=#3366ff>Olivier<BR></FONT></P>
<P><FONT color=#3366ff><FONT size=+0></FONT><BR></FONT></P>
<DIV><BR class=webkit-block-placeholder></DIV>
<HR>
<DIV><BR
class=webkit-block-placeholder></DIV>_______________________________________________<BR>ALAC
mailing list<BR><A
href="mailto:ALAC@atlarge-lists.icann.org">ALAC@atlarge-lists.icann.org</A><BR><A
href="https://atlarge-lists.icann.org/mailman/listinfo/alac">https://atlarge-lists.icann.org/mailman/listinfo/alac</A><BR><BR>At-Large
Online:<SPAN class=Apple-converted-space> </SPAN><A
href="http://www.atlarge.icann.org/">http://www.atlarge.icann.org</A><BR>ALAC
Working Wiki:<SPAN class=Apple-converted-space> </SPAN><A
href="https://community.icann.org/display/atlarge/At-Large+Advisory+Committee+(ALAC)">https://community.icann.org/display/atlarge/At-Large+Advisory+Committee+(ALAC)</A></BLOCKQUOTE>_______________________________________________<BR>ALAC
mailing list<BR><A
href="mailto:ALAC@atlarge-lists.icann.org">ALAC@atlarge-lists.icann.org</A><BR><A
href="https://atlarge-lists.icann.org/mailman/listinfo/alac">https://atlarge-lists.icann.org/mailman/listinfo/alac</A><BR><BR>At-Large
Online:<SPAN class=Apple-converted-space> </SPAN><A
href="http://www.atlarge.icann.org/">http://www.atlarge.icann.org</A><BR>ALAC
Working Wiki:<SPAN class=Apple-converted-space> </SPAN><A
href="https://community.icann.org/display/atlarge/At-Large+Advisory+Committee+(ALAC)">https://community.icann.org/display/atlarge/At-Large+Advisory+Committee+(ALAC)</A></DIV></BLOCKQUOTE></DIV><BR></DIV></BLOCKQUOTE></BODY></HTML>