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On Wed, Mar 23, 2011 at 3:50 PM, William L. Thomson Jr. |
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<wlt@××××××××××××××××.com> wrote: |
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> On Wed, 2011-03-23 at 15:23 -0400, Rich Freeman wrote: |
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>> Is there any controversy over the requirements, or is there a |
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>> consensus that we have a problem here? |
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> |
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> I am sure the IRS and state of New Mexico would care the mandated |
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> requirements are not being fulfilled. |
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|
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Well, neither the IRS nor the state of New Mexico is posting on this |
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mailing list. Clearly from the responses of others there is in fact a |
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controversy over whether a problem exists, and perhaps over the |
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details of the requirements. |
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|
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> |
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>> Certainly interested in an answer to this. The way I read it was that |
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>> sometime in the past there was a problem and the correction just makes |
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>> the register reflect reality. That might not be something we can fix. |
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> |
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> At what point in the past? There needs to be specifics there, not just |
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> some general statement. This is not anyones money, but alls money. |
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> Therefore there needs to be accountability for all to see, and there |
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> won't be any questions. |
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> |
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|
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Ok, so priority 1 has to be that all activity going forward is clearly |
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documented. |
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|
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If there was some error or mess in the past, then by all means we |
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should look into it. However, we may or may not ever be able to |
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resolve it, depending on the state of the records. The current (and |
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to be elected) board needs to held accountable for the things they did |
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- and only in part for their ability to clean up something that |
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happened in the past. |
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|
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Sure, the issues of the past, if uncorrected, may cost us something. |
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That alone doesn't mean that they can be corrected. |
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|
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I'm not suggesting that we shouldn't try to find out more - only that |
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this may or may not end up being possible, and so it is what it is. |
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|
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>> Any suggestions as to solution? Hiring a CPA as a part-time treasurer |
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>> might be a solution - if we can afford it. |
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> |
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> If the foundation wants to remain as such and have control over it's |
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> assets and IP, remain a legal entity. Then it must retain a CPA, and |
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> file the mandated annual reports and financial statements. |
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|
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So, I'll agree that any reports required by law must be filed. |
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Whether a CPA is required depends on the law and the complexity of the |
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task. I don't doubt that the cost is significant - maybe not |
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thousands of dollars, but they aren't going to do it for $50 unless it |
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is a donation. Also, in my experience accountants only work with what |
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you give them - if your records aren't useful then they can't generate |
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reports out of nothing. If your records are good enough to report on, |
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then there is probably a decent chance we could do the reports |
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ourselves, and rely on CPAs and attorneys only when there are issues |
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in controversy, or for auditing. |
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|
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> |
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>> The lack of reporting probably stems from one of a few possible causes: |
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>> 1. There is not agreement the work needs to be done (perhaps rightly |
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>> or wrongly). |
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> |
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> Who is questioning the federal and state requirements? This is not |
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> something to disagree on, and anyone who does disagree, clearly is |
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> unqualified. |
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|
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So, it sounds like there is debate over whether a problem even exists. |
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I was listing possible issues, and your declaration that a problem |
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exists obviously does not on its own make it so. |
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|
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|
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>> One thing we should strongly consider is that if we don't have time to |
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>> legally document an action, then we probably shouldn't perform the |
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>> action. |
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> |
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> You have no choice on this stuff. You are running for the board and you |
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> should know this stuff. Or not run for the board if you are not |
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> qualified for such. |
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|
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I think you misunderstood my point. You don't need to document |
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something that you didn't do (sure, you might have to issue a no-op |
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statement, but that's it). So, we should focus first on compliance, |
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and second on activity. If we keep the reporting ahead of the |
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activity then we will always be compliant. |
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|
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Regarding my qualifications - I never claimed to be a CPA, and neither |
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are most directors in public companies (at least from what I've seen). |
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The role of a director is primarily one of oversight normally, |
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although the reality for Gentoo is that we need to get our hands |
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dirty. I certainly have no objections to this. |
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|
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From what I've seen posted by the trustees in this thread we really |
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don't have a serious issue to worry about here. Obviously if elected |
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I will have full access to all material information and would confirm |
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that this is in fact the case. If it isn't then we'll work TOGETHER |
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to fix it. That last bit is actually pretty important - what's the |
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point of Gentoo if we're throwing stones at each other? |
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|
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> |
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>> If accepting a check involves 18 hours of paperwork, then we |
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>> might consider whether the check ought to be accepted at all. |
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> |
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> Then why does the foundation exist at all? |
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> |
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> The flip side is how will that money be spent, and what impact that will |
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> have over what period of time. You will likely find out that the benefit |
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> completely outweighs the cost. Which is some what the entire idea behind |
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> a non-profit foundation. |
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|
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|
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Again, I think you misunderstood my point. I wasn't suggesting that |
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we shouldn't accept money. My point was that if any particular |
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transaction is unusually onerous from a reporting or legal standpoint, |
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then we should consider that as part of the cost/benefit balance. If |
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somebody wants to set up a trust to benefit Gentoo in the amount of |
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$47, and that trust takes Gentoo 75 pages of accounting over the next |
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10 years to work out the reporting, then we should probably just ask |
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them to write us a check or give it to somebody who can handle that. |
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On the other hand, if that trust costs us writing the number $47 in |
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line 8 of form ABC then we should take it. |
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|
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> |
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>> A report is easy at the start of the reporting period - copy balance |
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>> forward from last period, activities are all zero, end balance is |
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>> equal to start. |
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> |
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> Problem is neglect has gone on for so many years. Each year that passes |
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> is just one more to play catch up up. Things were quite behind in 2008, |
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> and now in 2011, only more so. |
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|
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Again, priority 1 is that documentation for current activities is |
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good. Priority 2 is that we catch up on old messes. You can't clean |
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up a mess if you're making it worse every day. |
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|
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And the current trustees seem to claim that all is in order. |
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|
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> |
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>> Might not hurt to use something like Google docs with backups to |
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>> facilitate/etc. |
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> |
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> Thats pretty irrelevant, but many things could be leveraged. |
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> |
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|
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Well, I was trying to be constructive. If you care about Gentoo, and |
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you're going to point out problems, then it doesn't hurt to suggest |
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options for solutions. I won't be hurt if they aren't ultimately |
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implemented. |
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|
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If things are actually under control then perhaps the status quo is adequate. |
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|
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Certainly I'd support increased transparency, like a webpage with |
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periodic statements. The checkbook register need not be public - |
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mainly because it probably contains details that might be personal/etc |
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in nature. |
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|
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> (Paraphrased) |
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> You had commented on losing non-profit status/etc. |
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|
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I don't know that you specifically said anything incorrect, but there |
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are a lot of common misconceptions out there around non-profit status |
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and what that means as far as the IRS goes. |
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|
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The IRS taxes corporations (that's what we are, legally) and |
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businesses in general based on PROFIT. If you don't make a profit, |
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then you don't owe taxes, period. You don't need any particular |
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status to benefit from this. |
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|
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501(c)3 status is about allowing contributors to claim a tax deduction |
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in the US on their donations. You can write a check to Microsoft |
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right now, and there are no issues for Microsoft receiving that money |
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(they just have to put it in their revenue, and pay taxes if not |
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offset by a loss). However, you can't deduct that from your income |
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for tax purposes. If you write that check to the American Red Cross |
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you can, because they are 501(c)3. |
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|
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In summary: |
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|
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Bottom line is that I'm all for transparency. However, I'm not going |
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to accuse the current trustees of not doing their job unless I have |
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evidence that this is actually the case. Sure, I'd love to see more |
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transparency, and we can work constructively to have that. However, |
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if our interests REALLY are the welfare of Gentoo we can do that |
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without making accusations. |
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|
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How about a simple "Hey, I was curious if Gentoo's financial |
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statements are posted anywhere public. Can you point them out, or is |
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there some way we can work towards making them public?" This is much |
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more constructive than starting with "I know you're hiding something - |
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prove that you aren't!" |
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|
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If you're looking for somebody who is going to antagonize anybody |
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trying to help out until they all quit then by all means don't elect |
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me to the trustees. I'm all for compliance and am willing to pitch in |
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to help out. I'm fine with hiring professional help when that makes |
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sense. What I'm not for is stirring the pot just to make people run |
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around. |
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|
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Rich |