============================================================================= Information Item Bylaw 3 - Is a change required? Relative to "Minimum Contribution" Guidelines Christopher L. Cope Executive Director execdir@freenet.carleton.ca Jan 14, 1999 =========================================================================== Every year, the organization provides guidance to members on what is required to keep the organization healthy. Every year NCF adjusts the guidance according to the experience of the previous year, and to financial requirements. Recently the organization began giving guidance that members ought to contribute a minimum, either in time or money. In general, this has been well-received and contributions are beginning to return to levels required for sustainability. The Board has received proposed motions to amend or repeal Bylaw 3, arising from our implementation of "Minimum Contribution" guidelines. The purpose of this report is to assist the Board in its deliberations and to recommend a course of action. Bylaw 3 reads: "There shall be no membership fees or dues." One motion from a member proposes that bylaw 3 be altered so that NCF charge a fee, and another proposes that NCF at least ought to have the potential to charge a fee. I spoke to Philippa Lawson on January 6, 1999 regarding our new "minimum contribution" policy. Lawson is a lawyer working with the Public Interest Advocacy Centre (PIAC) and is something of an authority on not-for-profits and registered charities. See also http://www.web.net/piac/ I asked Ms. Lawson 2 questions. In my first question, I asked whether or not we would disaffect our not-for-profit status if we were to charge a fee (as proposed by some members). The clear answer is no. Not-for-profits often charge fees and there are no restrictions. The important issue for not-for-profits, regardless of their revenue sources, is that there be no pecuniary gain to the members. This means that we can keep the Bylaw 3, repeal it, or amend it at our discretion without concern for our not-for profit status. Considerable additional information can be obtained from Industry Canada's website at: http://strategis.ic.gc.ca/sc_mrksv/corpdir/engdoc/7j.html My second question related to the guidance we give to members about how to support NCF. I asked: "If we 'ask' for a donation, and say that we will accept volunteer labour in lieu of cash, does this constitute a fee or can we continue to treat these contributions as donations?" I explained that our policy is to renew any member regardless of contribution, but that we were intentionally not highlighting this policy because we believe it is in the interest of members to contribute a minimum this year. Lawson suggested that in order to give us a definitive opinion, she would have to do a study of case law, and of course, this information was exchanged in a telephone conversation, rather than in writing, and I supplied all NCF information. She did however, offer an impromptu assessment. She suggested that the critical aspect of "donation" is its voluntary nature. She said that as long as the contribution (whether money or in-kind) is not mandatory, it can still be considered as a donation. She further suggested that what it really comes down to is a matter of practice. If it is our practice to allow a member to continue to use NCF without making a contribution of any kind, then we can continue to describe contributions as donations and are safe in retaining the Bylaw as is. She did suggest however, that we do create some ambiguity in our method and being more forthright in the wording of our renewal notice would remove this ambiguity but perhaps not give us the same level of participation. During December, 1998 the percentage of renewing members who donated, climbed to 83.2% with an average donation of $27.99, notwithstanding the fact that some of these members received their notices of renewal prior to our implementing "Minimum Contribution". This apparent success suggests that our program is working as is. During this period, no member was refused renewal regardless of whether they claimed that they were unable, or were simply unwilling to contribute. We did not experience a landslide from people who wished to avoid contributing, nor did we experience a massive number of "hollow volunteerism" from members wishing only to avoid cash payment, We did however recruit about a dozen new volunteers, some of whom have been members for several years. Our program served as a catalyst to prompt their input. Repealing, or amending Bylaw 3, specifically to allow for fees might be interpreted as a signal that we are definitely moving to a fee structure soon. It now appears that such measures will not be required and such a signal at this time is unwarranted. We have identified that the greatest challenge facing us at present, is to attract new members and the concept of a donation-based organization is the glue which bonds us to the majority of our corporate Key Partners. The support of these Key Partners will be needed, if not instrumental, in developing and maintaining programs of broad interest. Some discussion has centered on the issue of our name. Some feel that it is inappropriate to include the word "free" in our name. Since inception, people have interpreted "FreeNet" in many ways and sometimes felt misled. NCF has taken pains to make it clear that 'free' does not mean 'free to operate' or 'no need for your support'. It has been said repeatedly that NCF is just a large group of people getting together to share costs and workload. Moreover the word "free" in the context of community networking is as much rooted in the notion of freedom (not free of cost). By creating a vehicle which is affordable and accessible by all citizens of our community, we create an opportunity for them to enjoy free and open expression with the World using the Internet; an opportunity which would otherwise be unavailable. The word "free" in this context is not taken in the form of "gratis", but in the sense of "uncontrolled". Neither government nor industry is paying for or controlling this opportunity. It is the members themselves, who pay for and manage their own resource. As Sandy Campbell has said in his submission: "The system remains "free," with no agenda beyond providing service to its users and to the community. It has no political or corporate affiliation, no restrictions on who may have an account, and reasonable requirements governing usage and cost-sharing. The name should stay; its meaning must simply be understood in the broader sense. For our members, and for potential members and for the general community there is a valuable cachet and powerful symbolism in the name under which FreeNet was born. We should not casually turn our backs on our history. Symbols have meaning and are important." Recommendations: ~~~~~~~~~~~~~~~~ 1. Bylaw 3 There would appear to be no legal requirement to amend or repeal this bylaw. Moreover, amending or repealing the bylaw might be misunderstood. Accordingly, it is recommended that the Board reject all motions to change or repeal bylaw 3. 2. Renewal Letter The language in the present renewal letter does not explicitly refer to non-contribution because it is felt that to do so would be to incorrectly communicate management's guidance to members this year about how to support NCF so that it can continue. The language of the renewal letter does not conflict with our bylaws or mission however, and in fact is considered highly beneficial to the interests of members. No change is recommended 3. "Free"Net In terms of recognition and goodwill in the community, the name FreeNet has significant value. Changing the name might have adverse impact, in both corporate support and disruption, without compensating benefits. NCF does not promote the interpretation of 'free' meaning 'no need to contribute', and actively tries to dissuade people of that interpretation. Accordingly, no change is recommended. Background Material: ~~~~~~~~~~~~~~~~~~~~ 1. NCF Bylaws: http://www.ncf.ca/ip/freenet/papers/by-laws 2, Text of NCF Renewal Letter http://www.ncf.ca/ncf/renewal/letter.txt 3. Industry Canada's "Non-Profit Kits and Related Annexes" http://strategis.ic.gc.ca/sc_mrksv/corpdir/engdoc/7j.html 4. PUBLIC INTEREST ADVOCACY CENTRE http://www.web.net/piac/ 5. BY-LAWS OF CHEBUCTO COMMUNITY NET SOCIETY (Chebucto charges annual dues to be a member of the society) http://www.chebucto.ns.ca/Chebucto/bylaws.html 6. Great Plains Free-Net (a) constitution: ftp://gpfn1.gpfn.sk.ca/pub/gpfn/constitution/by1-adopt950808.txt (b) fee structure: ftp://gpfn1.gpfn.sk.ca/pub/gpfn/constitution/by2-adopt950808.txt 7. Saskatoon Free-Net Association Inc. Bylaws (SFN charges membership fees) http://www.sfn.saskatoon.sk.ca/SFN/sfnbylaws.html -- *** Christopher L. Cope, Executive Director *** National Capital Freenet / Libertel de la Capitale nationale tel. (613) 520-2600 ext. 8024 -or- fax (613) 520-3524