FOSS projects and their legal structures

Free Software has been growing pretty much everywhere around the world, and so much so that we now face challenges nobody would have thought possible even ten years ago. One of these unexpected issues is the need for proper legal structures. Traditionally, only a handful of entities used to exist. They could be dedicated to one, large project or act as a hub for a “forge” or a set of more or less related projects: that’s the case with the Eclipse or the Apache Software Foundation. Others were one of kind: Software In the Public interest, SPI, is handling funds for large and small projects and has been doing so for well over 15 years. The Free Software Foundation both directly and through the Free Software Conservancy has also hosted many FOSS projects developments, infrastructure and financial resources.

Most of the time, these structures have served FOSS projects quite well. The growth of the actual numbers of projects, the increasing difficulties to set up a non-profit entities for open source initiatives in the US, as well as the global development of several FOSS communities are factors that prompt many communities to create legal entities harboring their activities.

This is where it becomes interesting. Depending on the project the choice of the type and the location of the entity may be quite different. In this regard the days where the choice between joining an established entity such as the FSF or the ASF, and setting up a 501c Non Profit Corpoation in the US seem gone. Looking around, more and more projects choose European based entities, may they be non profit corporation based in England such as Wikipedia UK, or associations (Mageia, KDE, & several others) and even full-fledged foundations such as the Document Foundation. Why is there so much diversity? Isn’t there a pitfall in setting up so many different kinds of NGOs? I think it’s actually a pretty good sign for Free Software in general.

First, the incorporation of a non profit corporation in the US is much more complex than it seems; especially after the change in how the IRS changed its policy in dealing with entities harboring FOSS projects. The legal “monoculture” in that sense, has suffered a rather hard blow as it became obvious the days where the federal government didn’t really mind accepting these legal structure were over.
Second, there are entities that are quite easy and inexpensive in Europe: that’s the case with associations in France or in Belgium and “Verband” in Germany. Third, independance matters at least sometimes. Some projects are just fine being hosted under an umbrella organization such as SPI, ASF and the Conservancy; others are even born from these entities, such as Apache projects. But others value independance, even if some of those entities can provide tools for them such as bank account management. With independence comes responsibility, accountability on financial, legal and community levels. And sometimes, that’s just what these projects are looking to achieve.

Last but not least, there are other needs that have to be addressed for some projects beyond a legal structure to hold the trademark and open a bank account: sometimes you need adequate protection of the project’s assets, and the ability to understand the challenges of that matter as well as an inclination of the project’s founders for a country or a continent do weigh in quite a lot. That’s the case with the Document Foundation. One of the key reasons to set up a foundation in Europe was to ensure its assets would be protected to matter what would happen to the project and the community itself; the scenario we had in mind was the takeover from a corporate sponsor that would alter the very existence of the project. Setting up the foundation was difficult, and it can be even more difficult when most of legal minutiae and processes are not in English. But it’s worth it as what was created was more than a shield; it’s a fortress built around the LibreOffice project and its assets. It is quite possible that other projects will see a similar need for protection of their assets and their future independence.

There is one thing, however, that no legal structure will ever be able to provide: a functionning and active community of contributors. One should not expect that a legal structure built for a FOSS project could at any time become an answer to a non-existent community or a buggy codebase. A legal structure helps when a community is already functioning and ready to move on to another level. Much in the same way, starting a new project within an existing structure means that both the original community and the structure are mature enough and ready to expand.

This is precisely because Free Software has grown so much in the past ten years that new structures are being set up everywhere in the world. This is the evidence of a global success.