[LGM] The transition

[Louis Desjardins]

Dear all,

It is my understanding that the debate is closed about the switch to
another organisation to handle our finances.

Here’s a plan for that smooth transition.

Only 8 days after the deadline. Wow!

In short,

We can act *now*, select the umbrella, sign the agreement with them, update
our website. The only economic activity we have as of now is reimbursing
and it’s under way. There is no more money coming in for this year’s LGM.
As soon as we have sponsors or donators and money coming in to put in the
bank, from now on, we use the umbrella. Once the reimbursements are
completed, whatever is left will be sent to the umbrella. Meanwhile, all
sponsorship activities can be organised; one very important step being to
put together our long awaited annual report.

In details:

*Introduction*
Structuring the finances using an umbrella organisation implicitly means
structuring our organisation. This does not mean we have to legally
constitute an organisation ; it means we, as a group, should establish the
rules we want to follow, just like we have a Code of conduct.

We suggested the creation of a *board* years ago but apparently people
where not too keen about this word. Any word that suits will do. The result
is there has to be an identifiable head to LGM. Why? Because we want to be
able to administrate a budget and this means formalities. The good news is
the work is already half done.

What we do already is a good start. Each year at LGM, we have a meeting at
the end of LGM. Provided it’s a bit more formal (keeping the* joyful tone
of the meeting* but at the same time keeping in mind we need to keep track
of certain decisions in a more official way), it’s in fact our *annual
general meeting* (AGM). What we could do to formalise things and make them
official to our sponsors, umbrella organisation and whoever is interested
in LGM: nominate (or elect if necessary) a *president of AGM* who will help
run the discussions according to the *agenda*, a *secretary* who will write
the *minutes* of that assembly. The *agenda* should be on line at least a
month prior to LGM. We can follow simple general meeting rules that already
exists.

   - Opening of meeting
   - Confirmation of quorum
   - Nomination of the meeting’s officers (at least 2 people: president and
   secretary)
   - Reading of the agenda, adding to it if necessary
   - We are presented the previous year financial state.
      - We vote it so it becomes official.
      - We discuss what’s on the agenda, point by point, and make decisions
   - We vote when necessary
   - The next venue is agreed and officially voted (if possible).
   - The next budget is presented, discussed and made official by a vote.
   - We welcome and vote for new board members when necessary.
      - Board members have a 2-year mandate and can be re-elected
      (endlessly?), for 2-years mandate.
   - We can create as many committee as we need.
      - People are free to offer their help.
      - Committees that are asked for present their report, if any.
      - Since a budget is involved, the board has to be officially voted so
   LGM can speak with authority to our umbrella organisation and in turn our
   umbrella organisation is assured that it handles money that have a specific
   goal that is agreed upon by who represents the LGM community.
   - The committee members do not require to be elected unless we think so.
   - The minutes are kept for the next AGM when they will be made official.
   - The meeting finishes

*Tasks*

   1. *Create the Committee of **Finances, determine goals, tasks, etc.*
   2. *Find people for this committee* (eg. Frank, Suzan, Nate, Louis, etc.
   I would suggest that this committee should always have on board the local
   organiser of the next year.)
   3. *Select the umbrella organisation* (responsible: LGM organisation)
   4. *Get the infos from them about the nuts & bolts of invoicing* (who
   does what, when, how is this handled, controlled), *getting the money*
   (there must be a follow-up mechanism that LGM org agrees upon), *using
   the money *(how orders to reimburse an expense are given by LGM org, who
   is entitled to give such orders, who controls what, how.)
5.
*Update the sponsorship page on the website with the new infos. *
   6. *Put together the annual report for 2016* — this is a *collective
   effort* from all the teams and should definitely include stuff about
   previous years. I suggest we ask specifically some of our best writers to
   help at least once with this task (Prokoudine? Nate? Greg?). The structured
   frame of this report will be used in the following years.
   7. *Be ready to print n copies and to make available the report on the
   website as a PDF. *The report by the way should be made using either
   Scribus or Libre Office, as a suggestion. (My offer to print it for free is
   still on the table)
   8. This report should be available to translators.
9. *Create a follow up on line document for sponsors’ contacts.*
      - Gather all the possible contacts from all our networks
      - Establish a list of past and present sponsors
      - Enrich that list, update it regularly, make it accessible to the
      members of the committee.
   10. *Start the sponsorship process asap *(immediately after the umbrella
   association has been chosen and everything has been agreed upon — say,
   weeks from now).
11. *Pursue and conclude the discussion about membership* and *attendance
   fees* (or, if we do not like the idea of a membership or an attendance
   fee, a *voluntary contribution* — basically, people who can afford it,
   based on their sole evaluation, pay whatever they want and we can help them
   with some hints numbers).
      - In my view, this discussion is inevitable
      - A few comments cannot terminate that discussion. It’s not enough
      data.
      - We must gather a much larger array of facts and opinions about that
      idea.
      - A poll would greatly help gather this valuable info.
      - In addition to the ideas already proposed, a "project membership"
      could be envisioned. This means for instance that active contributors to
      projects could see their membership fees paid by their own
organisation and
      not them personnaly + a bonus paid by the organisation itself. We can
      discuss that.
      - Or else, someone urgently needs to step in with a *better idea to
      secure an annual budget*, sustainably and high enough to cover needs
      that can go between 10K and 30K annually (and, once we get
organised, these
      needs might increase).
      12. *Complete the 2016 reimbursements* and any pending request before
   end of June 2016 (LD)
13. *Final financial report* (LD) by the end of July
   14. *Umbrella org invoices AQDPLL for the remaining amount* so any money
   remaining after the last reimbursement is done will be transferred to the
   umbrella organisation. (This is how it was done between GNOME and AQDPLL in
   2010).



*Things to consider*
*On site expenses (the local organiser)*
(eg. renting of some equipment, printing, t-shirts, local transport, etc.)

   - The local organiser should be reimbursed just the same as a traveller.
   - The local organiser could use a personal credit card or cash or debit
   card, gather the invoices or receipt and submit a final expenses report and
   get reimbursed just the same as a regular submitter
   - The expenses are reviewed and accepted (the expenses should be agreed
   and accepted beforehand, so the local organisers are sure to be reimbursed
   if they pay from their personal credit card, for instance).

*Off site expenses (the travellers)*
They need to file themselves in, on the online form, and provide the
relevant documents.

*Reimbursement process in detail (task of the Committee of Finance)*

   1. LGM organisation gives a one month delay after the termination of an
   LGM to participants who need financial support to provide their proofs of
   purchase.
      - Reason: since we pay in proportion of the budget and the needs, we
      need to gather all needs before we start reimbursing.
      - If we want that situation to change, we need to secure a budget
      that will be over our needs prior to LGM.
         - We would then be able to start reimbursing right away
         - In some cases, hand out the money before people buy their
         tickets.
         - A risk exists that the traveller cancels the trip and owes us
         money.
         - The money must be in the bank before LGM starts.
         2. Each year, we must recreate from scratch the online form to
   gather the information from the participants at LGM in need of financial
   support to cover their travel only expenses to and from LGM (round trip).
      - The fields are all a necessity but there could be many less if the
      LGM organisation would decide to reimburse using Paypal only
(thus, no bank
      address, no account numbers, no IBAN/SWIFT).
      - This is a discussion to have because some participants to LGM has
      expressed clearly they do not want to use Paypal. The actual
proportion of
      submitters is more or less 50/50 depending on the year.
      - Paypal is by far the most efficient and simplistic way to transmit
      money anywhere in the world, to anyone.
      - Paypal handles more currencies than regular banks.
      - Paypal have no restriction on the time of the transaction as
      compared to banks where the transactions that need a currency rate are
      bound to the opening time of the markets, in the country we send
the money
      from and also to the access to a rate, so, no holidays in the other
      country, no week-ends. This can become tedious.
      - Paypal is the cheapest mean, by far (10 times cheaper than the
      bank). Our money is better used when we use Paypal.
      - Paypal is the fastest mean, by far (up to 1000 times faster when
      things go wrong with the bank and average 10  times faster) because there
      is basically no form to fill, aside from the email address attached to
      people’s account.
      - We could ask Paypal to find out whether there are restrictions for
      some countries.
      - However those restrictions do not compare to those of the regular
      banking system which are very tight.
      3. Once submitted, the form displays a message on the web page
   telling the submitter that the data has properly been sent.
   4. The organisers receive an email.
   5. The submitters should receive the same email (it was the case in
   previous years but not in 2016 — this needs to be fixed)
   6. See if it is possible, from one year to another, to keep the form and
   move it to the new website. This would avoid errors and delay, and extra
   (unnecessary) work.
   7. One member of the Committee logs in the website and downloads the CSV
   file from the on line form and all the uploaded documents.
   8. The CSV is put in a calc sheet and submitted to the LGM local
   organiser who must check if all listed people are actually entitled to a
   reimbursement, if they showed up at LGM and if there is no-one missing in
   the list.
   - We don’t want administrative rules to push aside someone who made a
      mistake or who simply forgot.
      - We can make a reasonable attempt to communicate with that person if
      the case occurs.
      9. Once checked, the list is returned to the Committee who can now
   check the documents for compliance, make all necessary recalls for
   documents, stamp them as OK to process, sign them and prepare the
   reimbursement orders.
   10. The orders are transmitted at once to the Umbrella organisation by
   the mean of the same calc sheet. All relevant infos show on that list.
   11. The documents are scanned, named following a strict name
   nomenclature to be established with the umbrella organisation and made
   available on a server to the umbrella organisation who will need those as a
   proof that the expense was actually done. They can download those documents
   at any time.
   12. Reimbursement can take place.
   13. Once done, the Umbrella organisation transmits the Committee a
   report that includes the real cost for each reimbursements (transaction
   fees and currency rates, total amounts).
   14. The Committee reviews the report. If anything, we sort them out with
   our contact at the Umbrella organisation.
   15. The Committee is ready to transmit the final report to the LGM board.
   16. This report will be part of the annual report made to the General
   Assembly at next LGM, for its official approval by the Assembly.

*About black listed countries:*

If we know ahead of time that it will be problematic to transmit money to a
certain country, we can reimburse on site in *cash*, provided we have all
the relevant documents. A signed receipt attached to the invoice is all the
accountant needs. We need to have access to cash, one way or another. This
is a simple process. It can also be that the local organiser takes the
money from an ATM and pays the participant, then gets reimbursed by
electronic mean, by the Umbrella organisation.

*About official receipts for tax deduction:*

I think we should not care about the capacity of our umbrella organisation
to emit official receipts for tax. My opinion is based on the fact that an
organisation is tied to a specific jurisdiction. Hence, what is fiscally
possible in one country or state has only an effect on the residents who
pay their income tax in the same jurisdiction. This is why multinational
corporations have companies in every country. The same would apply to us if
we would care so much about emitting receipts for tax deduction. We would
need to create a non-profit in every country where there are donators to
LGM. Do we want that? I don’t think so.

The amounts we will gather from individuals who donate are small (ie, below
500$ and even much less). The fiscal benefit (tax deduction) will be in
proportion of that amount. So, if this becomes an issue, it’s an issue of
principles. Not a significant impact on the financial situation of anyone
and in any case we would be favouring people from one single country. For
larger amounts (say, from 500$), the corporate world asks for invoices. To
them, fiscally, it’s an expense, so, before their bottom line. It reduces
their revenues. It reduces their income tax.

On the part of the umbrella organisation that is a non-profit, there is no
income tax so invoicing is not an issue. However there are rules that apply
when an organisation reaches a certain level of financial activity. We
should be informed at the very beginning of such rules and their effects.

*About non-profits organisations:*

Non-profits organisations have basically the same fundamentals in many
countries but there can be quite a few differences from one jurisdiction to
another as to the rules that apply to those entities. There is a fiscal law
(generally, the most complicated law in each jurisdiction, hence the
necessity for highly skilled tax experts) in every country and if the
countries share *grosso modo* the definition of non-profit organisation,
the rules that apply to them can be of a great diversity. So, it is
advisable not to try to make general assertions about those organisations,
from one country to another. The rules that run non-profits in the USA are
not the same that rule them in Belgium, for instance, or in any other
country. Wikipedia has a good article on that subject.

Hope that helps.

Louis
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