NLNet

With many thanks to http://nlnet.nl there are ten inter-related grants, documented at the nlnet proposals page.

NLNet is a Foundation and so does not have employees or enter into "work for hire" agreements. It can give money to Corporations, but not at a "Commercial Business-to-Business" rate which would be expected to include payment of Corporation insurance, tax etc.) Universities, individuals, and other Foundations are perfectly fine.

They have an extremely knowledgeable International Tax Law specialist who has negotiated tax agreements with most countries in the world and consequently, subject to your Accountant checking with the law in your country, donations - and they are charitable donations - are extremely likely to be 100% tax-deductible.

The process is as follows:

  • Proposals are submitted, reviewed, independently audited and (sometimes) approved.
  • Accepted proposals submit a Project Plan listing a set of milestones, each of which has a fixed budget associated with it (note: not an hourly rate!)
  • The Project Plan becomes part of a Memorandum of Understanding, signed by the team (note: not a contract!)
  • On 100% completion of tasks or subtasks (which must add up ultimately to the total allocated budget) after approval by the project leader, an rfp (Request for Payment) is submitted by email to nlnet.
  • The rfp is paid directly by bank transfer from NLNet not by the Libre-SOC project

Note that the lack of hourly rate and the lack of contractual obligation is what enables this to be considered charitable donations.

This lack of contractual obligation also means that if the work is not done, then there is no penalty (for you). The only thing that happens is we grumble a bit and have to find someone else to do the work.

It is your responsibility to comply with local law and to consult an Accountant. Your Accountant will be able to confirm the International Tax Agreements, from the details and/or contact information on NLNet's website https://nlnet.nl/foundation/ANBI.html. If you are not familiar with this, or if your Accountant is unfamiliar with International Tax Agreements, please contact us, and we can put your Accountant in touch with Bob Goudriaan, the Finance Director of NLnet who specialises in International Tax Law. Bob can explain the details to your Accountant; your Accountant can explain it to you.

NLNet LibreSOC Top-level

NLNet new members onboarding FAQ

This FAQ is written to assist people in understanding the key difference between being "financially rewarded with charitable donations" and "a job / contract / work-for-hire agreement".

  • Q: I heard that NLnet is EU funded, I am not in the EU therefore I cannot help?
  • A: we get this a lot: it is wrong. NLnet is quite happy to give donations for work done by people outside of the EU, for the PET Programme tasks (http://nlnet.nl/PET). The "Assure" Programme is slightly different.
  • Q: I work for a company, can my company receive donations?
  • A: of course! Just bear in mind that NLnet will not pay your employer's Corporation Tax contributions (because NLnet is a Charitable Foundation).
  • Q: I am from India. Can i receive charitable donations?
  • A: Directly? no you can't! This is due to a Law in India that prohibits India Nationals from directly receiving any Charitable Donations from Foreigners! However, "work" turns out to be absolutely fine, and if you have a foreign bank account (outside of India), that's also fine. It's transfers to India bank accounts from Foreign Charities that is prohibited by India Law. There are solutions, basically.
  • Q: So I start work on a bug: do I get paid "per hour"?
  • A: No. NLnet's donations are for "results" (Milestones) not time. This avoids NLnet being, for example, qualified under local law (e.g. UK IR35) as an "employer" (which would interfere with their status and responsibilities as a Charitable Foundation).
  • Q: What if I don't complete the work?
  • A: then you can't submit a Request for Payment.
  • Q: Are there any penalties or consequences for me if I don't?
  • A: No. there's no contract (it's a Memorandum of Understanding), so no penalties. You just don't get the associated "gift / donation".
  • Q: What if it's a really long task?
  • A: We can (and do) split the (pre-agreed) Milestones into sub-tasks in our bugtracker. The same rules apply: 100% completion is required.
  • Q: What if i take a longer or shorter time?
  • A: If it's shorter, great! you still get the same gift/donation (good for you!) If it's longer, then, well, this is really no different from having given a "quote" for a job. If that's really problematic we may be able to sort something out.
  • Q: So do I pay any tax on what I get paid?
  • A: This is a question that you will have to ask your Accountant. In most jurisdictions, Charitable Gifts (which is what NLnet gives you) are entirely tax-free, however beyond a certain point some jurisdictions might start taxing it. Bottom line: it is your responsibility to check with your Accountant. Not ours, and not NLnet's. We can help get you through the "Understanding Hoops" on that however it is definitely your responsibility and your responsibility alone.
  • Q: What was that about a Memorandum of Understanding?
  • A: Part of NLnet's funding remit (under the EU Horizon 2020 Programme) and also part of the protection for yourself and for them, you will need to be listed as a Project Contributor on the associated Grant's MoU. Note and reinforcement reminder: this is not a contract, it is simply for the NLnet Foundation's "Accountability and Audit trails" and is entirely private. Also note that the MoU specifically states (reinforcing the above) that you agree that it's your responsibility to contact an Accountant and to comply with local Tax Law regarding the donations that you receive.
  • Q: What about my privacy in that regard?
  • A: NLnet do not give out confidential names and addresses and we request that you communicate that information directly to them (not to us as Project Leaders or to other Project Members)
  • Q: What about Bank Account information for payments, I mean donations
  • A: Again: we request that you pass on the Bank Account information directly to NLnet.
  • Q: So... you - personally - the other LibreSOC developers - are not paying us or involved in payment in any way?
  • A: Correct. We receive personal charitable donations (gifts) from NLnet, just like you would, having first also been added to the MoU.
  • Q: This all sounds very odd! I want to consult my Lawyer!
  • A: Yeah please don't do that (and please don't complain - especially publicly, which, very disappointingly, we've seen online - about the fact that we are asking you not waste Charitable Donations on a Lawyer. PLEASE READ THIS ANSWER CAREFULLY and if you do not understand it, contact us and ask questions rather than make public remarks about something that you do not properly understand). Paying a Lawyer with Charitable Donations - which you would receive and then use to pay that Lawyer - is Charitable Donations completely and utterly wasted for absolutely no good reason, because that Lawyer will not have the knowledge or expertise to correctly answer your question. Worse than that, you will be asking the wrong expert (unless they are also an expert in International Finance, specialise in International Tax Agreements, and are also a Chartered Accountant, or they are prepared to work "Pro-bono"). NLnet is Charitably funding "Works for the Public Good". If you pay your lawyer hundreds to thousands of dollars for "advice", that money needs to be replenished in your bank account. That means, ultimately, that NLnet, a Charity, is paying your legal costs to ask a question that your lawyer is not even qualified to answer, because they are not an Accountant! Please instead have your Accountant review the International Tax Agreements that apply to Charities like NLnet, and give your Accountant the following information: https://nlnet.nl/foundation/ANBI.html as well as a Reference to the tax rules that apply to Charities of the type that NLnet is registered as: https://en.wikipedia.org/wiki/Algemeen_nut_beogende_instelling. Your Accountant can check and also explain to you the following rules for philanthropy in Europe: https://www.philanthropyadvocacy.eu/legal-environment-for-philanthropy-in-europe/. If your Accountant does not understand them, have them contact Bob Goudriaan directly. Bob Goudriaan, who is a Chartered Accountant specialising in International Tax Law, can explain it to your Accountant, your Accountant can explain it to you. Did we emphasise enough, yet, that this is something that is within the domain expertise of an Accountant, not a Lawyer?
  • Q: I wanted to ask about "Works for the Public Good". What does that mean, in practical terms?
  • A: It means that our (your) work - must be made available under Libre Licenses. In this project's case we chose the LGPLv3+.
  • Q: Do I retain copyright?
  • A: Yes you do however we do ask that you make a "dual-assignment" so that we can enter into (non-exclusive, non-transferrable) re-licensing agreements to large Corporations that do not like the LGPLv3+. Given that you would receive a percentage of a substantial amount of money (which will be a donation by that Corporation) there is a financial incentive there (licensing deals for GPUs start around USD 250,000 for the low-end ones and go up from there).
  • Q: What's this about transparency?
  • A: We are funded under NLnet's Privacy and Enhanced Trust Programme https://nlnet.nl/PET. The mandate is so that people to be able to trust what we are doing, and for independent audits to be able to take place. Therefore, development discussion needs to be under resources within our control to record (i.e. not github). Even the IRC channel is logged.
  • Q: So I have to record everything?
  • A: No, just make sure to use the bugtracker, mailing lists, IRC channel gitolite3 and FTP server for general day-to-day development. Not your "personal conversations" or (if a Professor for example) your Lectures which happen to mention LibreSOC.
  • Q: That sounds nerve-wracking!
  • A: This is just how Libre software development is done: entirely publicly! There is nothing new here in 30+ years of Libre software development, it's just that it's a condition of involvement rather than optional. [sotto voice: and to be honest the traffic volume is so high and it's of such specialist interest that nobody's going to be looking who isn't genuinely interested :) ] An additional very important reason: we need proof of prior art, in case some idiotic patent troll tries to patent ideas they happen to get a glimpse of. By keeping the full and complete discussion on recorded timestamped archives such efforts may be invalidated.