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probable switch to for-profit CS: Team newsletter
Posted April 16th, 2011 - 1:41 pm by from Alexandria, United States (Permalink)
hey all,

In today's team newsletter, Casey seems to be suggesting a switch to for-profit status (I'm guessing B-corporation http://www.bcorporation.net/).

(sidenote: I've gotta take partial issue with Casey's characterization that all non-profits rely upon private funding...the local, state and federal government sends hefty chunks of change their way, too, via grants and tax breaks...but CS couldn't access this money because they didn't get the 501c3. Now they can become eligible for tax breaks and private grant $, if the B-corps status comes through...yet they'll also be able to sell CS, in the future if they want, and distribute profits to shareholders....not bad things, actually, just changes IMO...I've gotta research more on it to be more certain)

Thank you to my anonymous friend for passing along this really interesting news. Good times ahead, y'all...I'll be curious to see how this transition plays out. I think, overall, it will be a good thing and actually a necessary change....just my opinion. Stay tuned!

Marg

***********


Team Member News: Special Bulletin
Dear Team Members and Ambassadors,
Each one of you has helped make this community possible for over 2 million people. CouchSurfing simply wouldn't be here without you! That's why I wanted you to be the first people to know about some new things on the horizon for us. We're looking at big changes for the organization, and I think that what's happening is really exciting, and ultimately what's best for the CouchSurfing community.
I want to ask for your trust and patience as I try to share the news with you in as much detail as possible as it happens. It's important to me that I communicate clearly about where we are now and what's ahead. However, we're still working out all the details. We're hoping to have everything sorted out by June. For now, I'd like to give you an overview of our current situation.
As you know, CouchSurfing is incorporated in the US as a non-profit, and has been trying for four years to be recognized by the government as a charity (known as 501c3 status). Like all charities, we want to change the world for the better. The thing is, we have a very innovative approach to this: we think we can make change by giving people the chance to have inspiring experiences. This approach is one that doesn't fit into the categories our government traditionally uses.
As you can imagine, this news puts us in a difficult situation: if CouchSurfing can't be a non-profit, what can we be? How do we make the best possible organization to support our members and our Vision?
Luckily, the government is willing to help us find the best solution, and they've been very responsive to us. Additionally, we've been working with some of the best attorneys and experts on socially responsible organizations. CouchSurfing's co-founder, Daniel Hoffer, and I have also been in contact with insightful thinkers from a number of mission-driven organizations, talking about what's worked for them.
Right now I'm very hopeful. It turns out we're not alone in this situation. The non-profit sector in the United States, which relies on private funding, has been shrinking ever since the economy went downhill a few years ago. That means that a lot of formerly non-profit organizations are looking for ways to run more sustainably while still keeping all of the values and goals of a non-profit. And after a lot of research, I think we've found a place for CouchSurfing in one of the legal structures pioneered by these other idealistic groups.
Unfortunately, I can't give you more details right now. We are still in the middle of the legal process necessary to create a new structure for the CouchSurfing organization. What I can tell you right now are the commitments we're making. First, our community's Vision will always be our organization's first priority. Second, surfing and hosting will continue to be free. Third, we will always be focused on serving our members.
This is a time of big change, but that means a lot of opportunity, too. This restructuring is going to give us the ability to provide more features and support for CouchSurfing members. I know how deeply all of you care about this community. I really think that you'll be pleased with the information that I have to share with you in the future, and I promise you that I'll be in touch as soon as I can tell you more.
Regards,

Casey Fenton
CouchSurfing International

Posted April 16th, 2011 - 3:29 pm by from Hameln, Germany (Permalink)
Really bad news from the LT.

Please be aware about your personal informations you post here at CS. These infos could be good material to sell FOR PROFIT !!!

Posted April 16th, 2011 - 3:32 pm by from Trieste, Italy (Permalink)
Thanks for this interesting piece of information, Marg. I sincerely can't understand why this news should be reserved to volunteers and ambassadors. For instance, I could well decide to close our profile on CSing if it should officially becomes a for profit company, and I would surely inform other people about this...
Let's wait, in the meanwhile I suppose I will start to backup some contact informations of all the people I met on CSing and I would like to meet again someday.
-Marzio-

Posted April 16th, 2011 - 4:05 pm from Oslo, Norway
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Posted April 16th, 2011 - 6:36 pm by from London, England (Permalink)
Agree with RWGIRL about honesty, BUT what happens to all the people who donated time labour and money believing they were donating to a non-profit? Will they now be compensated if the fruits of their labour turn out to be a marketable commodity which may end up enriching Casey and the ST?

Ultimately CS needs to be more sustainable but sadly it looks to me like the volunteer corps have been or may well be shafted. I hope the switch will be accompanied by big changes in personnel at the top.

Posted April 16th, 2011 - 6:37 pm by from London, England (Permalink)
Also if they do go for B-Corps status I hope Margaret gets formally credited for the idea ;)

Posted April 17th, 2011 - 12:54 pm from Oslo, Norway
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Posted April 23rd, 2011 - 9:31 pm by from New York, United States (Permalink)
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Posted April 17th, 2011 - 12:04 am by from Paris, France (Permalink)
RWGIRL: "I'd be happy to see them become a for profit entity. Then there's honesty."

Not so quick. If that for-profit company is run by the same incompetent, dishonest people as today there is no significant progress made towards professionalism or honesty. For the moment at least the positive spin put on the failure to obtain 501c3 status is more a sign of continued dishonesty and of taking their audience for complete idiots rather than of a suddenly honest approach to running this organization. Or can someone explain to me how the legal status of the organization has prevented improvements in the past and how a new legal status is "going to give us the ability to provide more features and support for CouchSurfing members" which weren't possible before?

This is how it sounded last time Casey Fenton officially presented the advantages of the 501c3 to members:

"From Casey Fenton (San Francisco, California, United States)
Sent November 25th, 2007 - 2:04

CouchSurfing Files for 501(c)(3) Non-profit Status

Dear Members,

Great news! After a long and difficult process lasting for more than a year, it is with great excitement that we announce the submission of our application for the federally recognized 501(c)(3) US non-profit status.

Currently, CouchSurfing International, Inc. is a legally recognized and official charitable non-profit corporation in the US state of New Hampshire. This means our purpose and any income is dedicated only to charitable non-profit use but as a locally-based organization in New Hampshire.

Submitting our application to be federally recognized "tax-exempt" non-profit organization is an exhilarating time for CouchSurfing. It shows how we have grown from a small community project into a structured charitable enterprise with a clear focus on the mission of facilitating intercultural understanding. This status will also provide several arge and dynamic benefits that will serve to ensure the CouchSurfing community remains strong, sturdy and sustainable.

The advantages of 501(c)(3) non-profit status include:

Worldwide recognition as a philanthropic organization that complies with legal requirements for charitable endeavors

Increased legal protections and accountability

Eligibility for financial grants

Donations to CouchSurfing will be tax-deductible in the US

We are confident our 501(c)(3) application will be accepted based on the advice we have received from several experienced legal professionals, however the approval process will take several months so we will keep you updated when we have more news. We expect this classification to be a major step forward for achieving CouchSurfing's core purpose of facilitating intercultural exchanges that lead to understanding, tolerance, and ultimately a kinder world.

We are very grateful for the efforts of Matthew Whatley, CouchSurfing member and international non-profit lawyer, who has been a key force in moving this process forward. We also owe many thanks to this amazing community for carrying out our mission everyday!

For more info on US 501(c)(3):

http://www.irs.gov/charities/charitable/index.html

http://en.wikipedia.org/wiki/501c3

Happy Surfing!

The CouchSurfing Leadership Team"

In order to assess if the upcoming change is good for the CouchSurfing community I would want to know what exactly will be the new legal status of the organization and the fate of the various assets accumulated thanks to the generous contributions of volunteers, members and donors, part of whom were lead to believe they were contributing time, skills, knowledge or money to a charity, to a charitable cause, to a common good owned forever by the community, to improving safety or to easier access to couches.

Posted April 17th, 2011 - 4:21 am by from Alexandria, United States (Permalink)
thanks guys!

and thanks William...I'm always happy to pass along info because I believe in allowing people to see how processes work in real time...not fake/PR-altered-reality time. How else can we connect with each other, as committed people, to a worthy goal?

I think that this switch to for-profit status will be good, and was needed, because CS didn't get the 501c3, period.

The site will go dark in 2012 without this restructuring. If the CS manager-dudes had gotten the greenlight from the IRS, we would not have received this news, today, from them describing the need to change to for-profit status. The 501c3 would have been really nice...

...but they didn't get it, because of incompetency and inexperience, and general fucking up.

So: the next best option, FOR SURE, was to incorporate as a for-profit, B-corporation. This was apparent 6 mos ago: it's a sweet deal that can save CS and bring them back to integrity.

...so now we need to really watch them as they liquidate assets and get to a zero balance (as required by the restructuring). We need to make SURE that the money YOU ALL donated doesn't go toward paying bonuses to the people who fucked up the 501c3 and destroyed the translations team, etc.

We need to ascertain that YOUR donation money goes to a worthy charity, and not to bail out folks who failed to get the 501c3, but will be put to work with your charitable goals in mind.

If we can do this...yeah I'm behind the for-profit swapout.

if we cannot...I'm gone.

Posted April 17th, 2011 - 4:23 am by from Alexandria, United States (Permalink)
"In order to assess if the upcoming change is good for the CouchSurfing community I would want to know what exactly will be the new legal status of the organization and the fate of the various assets accumulated thanks to the generous contributions of volunteers, members and donors, part of whom were lead to believe they were contributing time, skills, knowledge or money to a charity, to a charitable cause, to a common good owned forever by the community, to improving safety or to easier access to couches."

...Uli said it first, and better, before me: agreed.

Posted April 17th, 2011 - 4:44 am by from Alexandria, United States (Permalink)
"...BUT what happens to all the people who donated time labour and money believing they were donating to a non-profit?"

thanks Niall...and yah, as you suspect: they are shafted. This is the risk of the charity game.

This, exact issue, is why I've repeatedly warned, especially to young donors, DO NOT give your heart and DO NOT give your money to orgs that are not vetted by the 501c3. Don't give anything to orgs whose staff do not get back to your emails...or who do not respond to you, personally, as a unique person...with a grateful, polite reply. And, emphatically, don't take shit from hubris-bloated staff who dismiss your efforts as committed CS members and invested volunteers....as did many many others here. http://www.opencouchsurfing.org/2007/05/24/in-retrospective/

...if you *feel* abused, as a volunteer, yeah: you are.

Posted April 17th, 2011 - 7:00 am by from Paris, France (Permalink)
"so now we need to really watch them as they liquidate assets and get to a zero balance (as required by the restructuring)"

The main asset of CouchSurfing international Inc. is the member database. If that has to be liquidated, too, it's a whole new game.

As for the proprietary site code developed over the past 5 years (since the self-inflicted "reboot" in 2006), that's probably more of a liability than an asset, so if that is gone and the new organization switches to state-of-the-art code, that's probably a good thing rather than a loss.

Posted April 17th, 2011 - 8:53 am by from Paris, France (Permalink)
"This restructuring is going to give us the ability to provide more features and support for CouchSurfing members."

Putting my last two posts together this surprising statement actually starts to make sense:

If CouchSurfing has to drop the site code as part of the asset liquidation and start over, that would in fact mean that the new site could finally be using better code and provide more features and support for CouchSurfing members. If the stubborn "we-are-smarter-than-everyone-else", "we love to reinvent the wheel" and "we-are-a-network-based-on-trust-but-we-don't-trust-anyone" approaches to coding are abandonned as a result of the restructuring imposed by the failure to obtain 501c3 status, then the statement becomes somewhat true, although I still don't see why that couldn't have been done without being forced to do so by the IRS.

Posted April 17th, 2011 - 8:57 am from Amsterdam, Netherlands
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Posted April 17th, 2011 - 9:43 am by from Rome, Italy (Permalink)
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Posted April 17th, 2011 - 10:00 am by from Paris, France (Permalink)
Flavio: "actually the code is starting to get better and better each day from the absolute mess it was before"

Perhaps the code is getting better and better but unfortunately I and othes are not seeing the result. These past days I have had time-out errors almost systematically for each and every post, something that leads to many multiple posts by those who don't check to see if the post has gone through. And I just lost a post in a Firefox crash, which is rare. "Better and better" perhaps, but not as good as it could and should be considering the multi-million dollar income.



Oh: "There are currently 1798 website viewers online of which 319 are not logged in."

Posted April 17th, 2011 - 10:11 am by from Paris, France (Permalink)
And here is the new version:



The clock has not advanced...

Posted April 17th, 2011 - 10:24 am by from Moscow, Russia (Permalink)
1800 users is surely a number to crash any website down =) Yet, this may be just a symptom of ongoing code work -- but gosh, CS has a special DEV version to play around so this website is left untouched until changes are fully debugged and the code is stable. So is this "better and better" code implemented just as messy as it was all the time before? Quantity rather than quality?


Will they now be compensated if the fruits of their labour turn out to be a marketable commodity which may end up enriching Casey and the ST?

That's what is on for the past several years, only without being legally recognised, and unseen by 99% users of CS.

...so now we need to really watch them as they liquidate assets and get to a zero balance (as required by the restructuring). We need to make SURE that the money YOU ALL donated doesn't go toward paying bonuses to the people who fucked up the 501c3 and destroyed the translations team, etc.

We need to ascertain that YOUR donation money goes to a worthy charity, and not to bail out folks who failed to get the 501c3, but will be put to work with your charitable goals in mind.

If we can do this...yeah I'm behind the for-profit swapout.

Margaret, how is it possible without CS having anything elective? Is their a way members can influence anything at all (apart from massively leaving for another project)?

Posted April 17th, 2011 - 12:37 pm by from Alexandria, United States (Permalink)
thanks guys

These are all really great questions and worthy speculations...and it does raise the question: what exactly are the assets CS possesses? I always just considered the cash balances...but you are correct, Uli and Henk: the code and the host roster are both valuable assets.

I really wonder how people will justify their willingness to offer their couch, for free, to enrich a for-profit company....it't a great point. Why do this? I suspect that the meet-up function of CS will overtake (if it hasn't already...) the hosting function...unless the managers create some really terrific, creative, programming to encourage hosting (doubtful with this group of people, who have had 10 years to do so...and have not). The volunteers, who organize events like the couchcrashes and tent-surf events, have always done the best job at creative, cost free, programming...but now, will they be so motivated?

not sure...but most people will be unaware of this change...and will probably go on doing what they always have done: bring people together.

@Joesla,

you make a great point! We *need* to oversee the operations...but how?

The managers need to convince US that they are handling this transition appropriately and legally. They need to SHOW US evidence of this, by communicating frequently and genuinely...honest dialog, NOT yay-4-us public relations bullshit. We are THEIR customers now...and they need to woo us in order to keep us, as active hosts and surfers...since our efforts could potentially enrich them. If they fail to do this, then yes: we delete our profiles and encourage others to do the same...organize a vocal campaign against the organization publicly.

i personally will not be convinced of the sincerity of this transition until I see some incompetent people fired from their jobs...starting with Jim Stone.

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Posted April 17th, 2011 - 12:48 pm by from Rome, Italy (Permalink)
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Posted April 18th, 2011 - 8:29 pm by from Paris, France (Permalink)
Got a new one for a change, for at least an hour now:

"503 Service Unavailable
No server is available to handle this request."

Posted April 19th, 2011 - 8:32 am by from Paris, France (Permalink)
Flavio: "actually the code is starting to get better and better each day from the absolute mess it was before"

Perhaps the code is getting better and better but unfortunately I and othes are not seeing the result. These past days I have had time-out errors almost systematically for each and every post, something that leads to many multiple posts by those who don't check to see if the post has gone through. And I just lost a post in a Firefox crash, which is rare. "Better and better" perhaps, but not as good as it could and should be considering the multi-million dollar income.



Oh: "There are currently 1798 website viewers online of which 319 are not logged in."

Posted April 19th, 2011 - 8:37 am by from Paris, France (Permalink)
Sorry about the delayed double post. That's what happens when the browser window refreshes on CS after a 504 error message, even days later. Just another bug...

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Posted April 23rd, 2011 - 10:00 pm by from New York, United States (Permalink)
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Posted April 17th, 2011 - 1:10 pm from Oslo, Norway
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Posted April 17th, 2011 - 1:43 pm by from Paris, France (Permalink)
Shea, we'll have to put together a CS dictionary one day:

instead of employees say "paid contributors"
instead of lawyers say "legal professionals"
instead of office say "base camp"
instead of company say "community"
instead of PR say "news"
instead of mismanagement or mistake say "innovative approach"
instead of "premium membership fee" say "verification donation"
instead of "we don't want to do that" say "it is against CS policy" (alternative: "CS has limited resources")
etc.

"But as long as membership numbers remain high, there's not going to be much motivation for CS to change its manner of operation."

With most members only paying once until they realize that perhaps they shouldn't have it is not the membership in absolute terms which motivates CS, but the steady influx of new members and with it verification payments.

Posted April 17th, 2011 - 2:34 pm by from Slavsk, Russia (Permalink)
yes realy, Poliglot, such dictionar should be main point in reform of CS,,

if after such dictionary in CS apears more people able make declaration: "I believe and understand what I talk"

than of cause this company will face great future..

and till that all depends from tomorow...
tomorow I´ll talk whit HC manager,,what in fackt is the same sa CS,,..if he´ll find forece talk for him self,,..
than,,..than CS manager will receive the same force and whithout looking for..

Posted April 17th, 2011 - 2:40 pm from Philadelphia, United States
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Posted April 17th, 2011 - 2:44 pm by from London, England (Permalink)
From what I can gather, there is now no mention of 501c3 status on either the donation or verification pages.It merely says donations are not tax-exempt.

However, it does say at the foot of the page 'Couchsurfing is a non-Profit organisation'. Since decisions to change that status have apparently been communicated to members, is it legal to now solicit funds on the basis of being a non-profit?

And I also agree with Michael that those responsible for this screw-up should depart the organisation, to be replaced by people who know what they are doing.

Posted April 17th, 2011 - 4:29 pm by from Paris, France (Permalink)
Here are some other mentions on the site which may have to be updated:

"How is CouchSurfing run as a non-profit organization?

CouchSurfing is a non-profit organization, funded entirely by the generous donations of our members and run according to our guiding principles -- one of which states that being a non-profit is essential to our mission."

"Achieving our charitable mission requires gathering and spending resources, but we do so with the understanding that CouchSurfing's non-profit status legally mandates that all resources must be spent directly on achieving the mission rather than creating profit for private interests."

(http://www.couchsurfing.org/about.html)

"CouchSurfing is a non-profit organization dedicated to making it more accessible for all people to explore the world and share inspiring experiences. Not only will we never charge for members to use the site, CouchSurfing's terms of use also forbid any commercial activity from occurring on the site."

(http://www.couchsurfing.org/about.html/faq)

"CouchSurfing is a non-profit organization funded primarily by member contributions and powered by volunteers from everywhere -- individuals fueled by CouchSurfing’s mission to change the world. Volunteerism is a CouchSurfing ideal. As a non-profit, no individual or investor profits from the contributions of our volunteers. All of their donated hours and skills help further the CS vision and support the community."

(http://www.couchsurfing.org/volunteering.html)

"We strive for transparency in the organization. Decision making processes and the operation of the Leadership Team is open record, including:
- Leadership Team members and area of focus
- New appointments to the Leadership Team, including selection process
- Regular communication about operations process, including quarterly leadership progress reports
- Financial Records
- Policies and guideline"

"This structure will be more like a traditional non-profit company than the looser "ad-hocracy" model used in the past. However, the new structure will create a way for any volunteer to eventually take on as much responsibility as he or she desires and to participate in the decision-making corresponding to that level of responsibility."

(http://www.couchsurfing.org/group_read.html?gid=1589&post=202762)

"The Future of CouchSurfing depends on you. Let's work on ideas, on ways to make CouchSurfing bigger, better, and more decentralized."

(http://wiki.couchsurfing.org/en/Future_of_CouchSurfing)


And here is another nice post by the General Manager of CS from August 21, 2007 (http://www.couchsurfing.org/group_read.html?gid=7161&post=330266#post333183):

"WHY IS CS A NON-PROFIT?

CouchSurfing is currently a non-profit corporation in the state of New Hampshire, and we are seeking federal non-profit status under 501c3. CS was incorporated as a non-profit and is seeking federal non-profit status because we believe it's the best way to achieve our mission and the best way to provide our free service. Our publicly stated mission is to spread intercultural understanding, which is a charitable cause.

When CS files to become a 501c3 non-profit, we are required to explain to the US government what charity service we will provide, and they have to agree to that plan. When we become a 501c3, we will be under constant scrutiny by the IRS and we'll have to prove that we're not using the organization to make money, but to serve our mission. The IRS had decades of experience catching tax dodgers, and if CS officers were found to be misappropriating funds, they would go to jail!


CAN CASEY DISSOLVE CS AND TAKE ALL THE MONEY?

Casey and the board of directors cannot take the money and run. As a 501c3, if they decided to dissolve the organization, *ALL* the assets of the organization can only be distributed to another non-profit."

This may or may not apply if someone else decides to dissolve the organization and if it has never been a 501c3.

Posted April 17th, 2011 - 3:23 pm from Oslo, Norway
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Posted April 17th, 2011 - 4:09 pm by from Slavsk, Russia (Permalink)
poor RW,,why you are making this noise there??

No one realy can´t understand your logic,,

The same as in shaire holders meeting,,..all this holderS whit 0,01 % make noise just some people whit 5 or 55% could feel conection whit suraunding..

may be you should paint transparent and go in this your polish village whit reclamation..:

"I lost my Human Right in Couch Surfing!!!

Help everyone who can?!!? ,"pLeASE""

Posted April 17th, 2011 - 5:06 pm from Oslo, Norway
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Posted April 17th, 2011 - 7:49 pm by from Slavsk, Russia (Permalink)
Dear Shea,

you know I think I red not more as everyone else in your post,,if not a little bit less,,but you also know,,you have still always right iprove me if..
if i´m..but..
I saw somehow just something as this in
in your post.:

http://www.youtube.com/watch?v=IVB4vnhQawo&feature=player_embedded

and you know I´m also afraid you can be lonely by not understanding what is about in this place where you are righ now..

but also from another hand,,if
if you found one friend in this place where you are,,than she/he of cause is able translate what is about..

Posted April 18th, 2011 - 8:23 am from Oslo, Norway
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Posted April 16th, 2011 - 6:34 pm from London, England
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Posted April 17th, 2011 - 2:38 pm from Macau, China
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Posted April 18th, 2011 - 5:18 pm from Milton, United States
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Posted April 18th, 2011 - 6:16 pm from Verdun, France
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Posted April 18th, 2011 - 7:38 pm by from Moscow, Russia (Permalink)
i do not agree that existing members who've already donated their $25 do not matter any more to CS. Oh yes they do -- cos the 2,000,000 ppl website attracts far more newbies when the website suffering strong members drainage. I wonder how soon, if ever, LT are gonna realize that fact.

@English_Wolf
Most but not all. We currently have BeWelcome (google it out because CS bans direct links to this hospex community; one of translation team leaders have recently tried to welcome his local CS group to BW and got a No Pasaran from CS website while trying to create a post). It offers its members a Do-it-yourself approach (anyone can contribute anything, freely), an elective board of directors, with possibility for every community member to be elected, and a good web interface.
So far it only lacks tens of thousands of members =)) But frankly i ve been using it since the Translation Team strike clearly showed we could get nothing from the LT, and it seems that other teams leaders are also taking up using BW, at least parallel to CS.

About private data, btw. There is one way to hide personal info from possible abuse in the future -- overwriting data in the fields might help; i doubt CS stores multiple edits of the profile. If the service turns really commercial, i will clear all the data and leave a "Welcome to Be Welcome!" link in my profile to redirect the surfers to a new place.

And its not about crying for CS in case of blackout -- CS is nothing more than a webservice. All the marvels the network has now were created by plain members and volunteers; i am sure the community is capable of changing technical grounds without breaking up =)

Posted April 18th, 2011 - 10:41 pm from Milton, United States
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Posted April 19th, 2011 - 12:50 am by from Alexandria, United States (Permalink)
.....I just received an obvious mass-emailed couchrequest from a guy, on behalf of himself and his 4 friends (who are not member couchsurfers and), who are coming to DC to 'fundraise' (this means standing at the metro stops and begging money) for their international trip. He joined March 2011. They, all 5, want to stay with me for 2 weeks, starting tomorrow....

This is the future of CS, y'all, for hosts.

...somehow, I feel...oh, I don't know....I would hate to seem distressingly NEGATIVE...so, perhaps, I'll say that I feel...um, somewhat *dissatisfied*?

bring on BeWelcome

Posted April 19th, 2011 - 1:33 am by from Alexandria, United States (Permalink)
"I have no problem with CS changing its structure but to what end? Make it a better vehicle for a sale?"

sorry Michael

i am just now seeing, reading, and understanding your post...i just skimmed across it before, so I apologize for that.

Answer: CS failed to get the 501c3. This left them in a bad position because, in order to renew as a state-level public charity, they needed to have it. The CS renewal was coming due in 2012...and still: no 501c3. Without the 501c3, and the renewal, CS could not legally solicit the public for donations (which is how they stay alive...)...so the site would go down.

They needed to become some kind of new legal vehicle. They needed to restructure, because they were being kicked out of the non-profit universe.

The for-profit B-Corps was a great choice for CS since it allows them to pursue charitable goals, get a tax break and be eligible for private grants, but still be a for-profit company that can be sold and which can distribute profits to their shareholders (of which they have none, since the company is not public...but they have the founders to enrich)

I actually really like the B-corps designation and hope that it restores CS to some semblance of integrity

...(after years of fact-dodging, way-late financial statements, tax-evasive maneuvering (fake restaurant in Istanbul or Base Camp anyone?), co-habitation bonuses, free airfare to Burning Man, Tahoe ski trips, private gym memberships, orgy room, luxury beachside villas, airfare to random destinations for no discernable purposes (let's all go to Indonesia and New Zealand with all of our friends for no actual reason that benefits the organization...), free food, and publicly-hidden reimbursements for travel that never happened....oh, I forgot: re-routing paychecks through a NL account to avoid greencard issues)

yeah I hope that CS gets some integrity as a B-corps.

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Posted April 19th, 2011 - 9:31 am by from Moscow, Russia (Permalink)
i'd say BW needs some progressive ideas input to move on; Brainstormers gurus could help with it =)

Posted April 19th, 2011 - 11:57 am by from London, England (Permalink)
BW needs to find a way to attract members, it has everything else. Perhaps use word of mouth at Rainbow gatherings?

Posted April 19th, 2011 - 12:22 pm by from Slavsk, Russia (Permalink)
"Perhaps you're right. It wasn't my intention to come across as CS is commiting a gross human rights violation."

yes realy,,CS and HC looks as one the croise of choise..:

mariage or
or more - less profesional "love"

and who realy can decide it?

Just Veit and Casley...
But they are two boys,,how they can realy talk about traditional mariage?? And if even one is atheist and another have some complex of public relations,,..than what,,..
just spliting in more and more separated sectas,,or just working for such two not enough discuvered gays??

May be you RW could somehow feel and take more responsability as girl of CS for example?


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Posted April 19th, 2011 - 2:05 pm from Berlin, Germany
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Posted April 19th, 2011 - 3:00 pm by from Paris, France (Permalink)
Welcome back Norbert. Let's hope your worst fears are unfounded and CS management suprises us pleasantly.

How do you feel about this statement reportedly made by the General Manager Mattthew Brauer in October 2008:

"CouchSurfing can never and will never become a for-profit. CS is legally forbidden from ever becoming a for-profit." ?

(http://www.couchsurfing.org/group_read.html?gid=429&post=1654953#post1677501)

This is probably a good time to ask for clarification. As Casey said in his newsletter, and we certainly won't contradict him:

"It's important to me that I communicate clearly about where we are now and what's ahead."

He also says:

"I think we've found a place for CouchSurfing in one of the legal structures pioneered by these other idealistic groups.
Unfortunately, I can't give you more details right now."

I believe Casey can and should do better.

Posted April 19th, 2011 - 3:44 pm from Berlin, Germany
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Posted April 19th, 2011 - 6:17 pm by from Alexandria, United States (Permalink)
...they should look at their D&O insurance, quick; its coverage better be through the roof:)

hey Norbert! glad to see you!

I'm going to disagree with you, though, and I'll tell you why: currently, the B-corps are wicked cool and trendy. We know that these dudes love to be cutting-edge popular, even more than they love money, and they can scam the details of the b-corps as easily as an LLC, IMO....correct me if I'm wrong, there.

The main driver for these guys, all along, in my opinion is that they never really wanted to be org-managers...they've always wanted to be rockstars. They're more motivated by social power, adoration, and groupies who worship them for their ability to "change the world" (ooooo...how idealistically selfless, y'all...I'm in loooove)

...than wealth acquisition (...which seems so 90's, don't you think?:)

Posted April 19th, 2011 - 7:02 pm from Amsterdam, Netherlands
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Posted April 19th, 2011 - 7:43 pm from Berlin, Germany
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Posted April 19th, 2011 - 9:48 pm by from Alexandria, United States (Permalink)
hi again Norbert

Your characterization may well be correct...I just dont' know.

I do know that we're treated to insinuation of the lameness of the 9-5 cubicle jobs, constantly, and understand ourselves to be quite unsexily unpalatable, if this situation describes our chosen work life...but I think you and I may differ on the hinge of motivation: you tend to see these guys as deliberate and strategic in their maneuverings toward a life of paid leisure and cube-lessness...and I tend to see them as generally nice, once-idealistic, people who were corrupted by too much money and adulation....and now they're in defensive crouch.

We may both be correct, on some points, and not others, or in degrees, but both stances are valid to analyze since we just dont' know why these managers do their jobs as poorly as they do...and why CS members have tolerated it. I'm actually optimistic that things will improve with a B-corps designation, since it will mean a fresh start.

I checked out the B-corps website to have a look at the ratings system that they require...and couldn't access it without creating a free account. So instead I accessed it by looking at the example they provided here:
http://www.bcorporation.net/resources/bcorp/documents/2010-B-Impact-Assessment%20(1).pdf

I found this system easy to scam...in that: you do not apparently need to provide proof of, or action on, these items, for the rating to credit you with their implementation. I understand that they audit randomly and that recert is required every 2 years....but this is the game these CS-guys play: convince, via earnest-seeming social interaction, of your sincerity. Bend it, twist it, mold it to your purpose: a ski trip to Tahoe for you and your friends, indeed, can be characterized as professional development since it builds 'team bonding'....and yo it was: http://www.couchsurfing.org/group_read.html?gid=2125&post=2476846

Casey et. al. are really good at it (ok, not good enough for the IRS, but those guys are globally bad-ass on the big screen. The B-corps people? who knows...they want to believe, I'm sure, since it's a new designation, and our CS-heroes do seem to be able to full-court-press their sincerity to others. I worry a bit about that: that the B-corporation oversight will be heavily idealistic and scammable.)

I dont' know who actually conducts the audits, recertifications, and examinations of authenticity for the B-corporation, but, since it's new, I'm betting that they aren't up to par with the charities' regulators, or IRS adjudicators, who've seen every trick in the book, by now.

Posted April 19th, 2011 - 11:48 pm by from London, England (Permalink)
well well.... interesting.

So under what conditions can CS collect funds/ solicit donations if they get B-Corps status?

And would I be right in thinking that a switch to this status will NOT be enough to save them from any class-action lawsuit for previously donated time and money?

I can't see any major changes before 2012 - why not run out the clock a bit,as usual.

Posted April 19th, 2011 - 11:51 pm by from London, England (Permalink)
Oh yes and welcome back Norbert, livening things up as usual ;)

Posted April 20th, 2011 - 2:47 am by from Alexandria, United States (Permalink)
...more:
http://www.bcorporation.net/resources/bcorp/documents/The%20Business%20Case_Become%20a%20B%20Corporation2.pdf

sounds like the certification and spot-checks are carried out by an affiliated, but unrelated, 501c3 called B-Lab that operates independently from B-corporation: http://www.bcorporation.net/index.cfm/fuseaction/content.page/nodeID/08c9dc4d-6064-48cb-af04-4fd9d4ced055/externalURL//

It seems like they're still working out the tax breaks, degree and type, state-by-state, for b-corporations, so, I'm guessing Niall: sure, you can donate to b-corps but you can't deduct this donation on your taxes. I'm betting that they'll be lobbying state, and federal, legislators to change this....http://www.nonprofitquarterly.org/index.php?option=com_content&view=article&id=4011:nonprofit-newswire-the-b-corporationtax-preferred-status&catid=155:nonprofit-newswire&Itemid=986

I think the main perk to being a b-corps now is bragging rights to a place at the cool kids' lunch table: 'our organization was among the first 500 b-corporations...so you know that we're dope'

...even if they're not exactly a practicing cool kid, from objective criteria...but can fake it....which is my concern: poseur-ness. I would like to know how scammable this system is.

Posted April 20th, 2011 - 3:54 am by from Paris, France (Permalink)
Thanks for posting all this information, Margaret.

From your first link:

"Benefit Corporations must create a positive impact on society and the environment"

I cannot see how a company like CouchSurfing which encourages travel for worldwide real-life connections, much of it by air, can possibly meet that second criterion.

Although this looks like a nice Marketing tool, unless I have missed something I believe CS will need to look elsewhere to get out of the mess they got us all into.

Posted April 20th, 2011 - 9:20 am from Macau, China
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Posted April 20th, 2011 - 3:23 pm by from Alexandria, United States (Permalink)
thanks guys...and thanks for the link Michael.

It seems like B-corporation is currently lacking teeth, IMO...and is a certification, such as LEEDS or 'organic'...but that it is still a work in progress, as B-Lab founders acknowledge.

http://solveclimate.com/news/20090713/b-corporation-new-way-doing-business

In the article above, King Arthur Flour b-corps founder admits that he wants the designation partly to differentiate his company in the marketplace...using B-corps status as a good-guy stamp. (He also says that it provides a benchmark for how well they're doing in the sustainable-business game...which is actually a nice feature; the ratings sheet acts as a report card).

My concern is that B-corporate status will become another empty marketing tool. They insist that companies must change their articles of incorporation to reflect b-corp values...but what if CS does what it always has done: operate without any by-laws, at all. They could certainly write them...and then simply never vote on them, as they've done for their whole history. I'm hoping that they won't be able to get away with this type of fence-sitting.

It does seem, however, that CS will be forced to comply with more forthcoming disclosure...if we can trust them to post honest financial statements. The finances now are not easily followed because too many lines are lumped together, so you can't actually follow how much is spent on, say, cohabitation bonuses...it's not broken out to that degree. I suspect that B-corp status will require more exacting financial statements (I hope so, anyway)...but it will vary by state.

see here for Maryland, the first state to adopt B-corps:
http://www.gazette.net/stories/12062010/businew202209_32549.php

given that it's the cool new thang in the SF bay area, I think CS will go for it, surely: http://articles.sfgate.com/2008-05-18/business/17154807_1_networking-corporation-family-foundation


Posted April 20th, 2011 - 3:35 pm by from Alexandria, United States (Permalink)
check out the legal requirements for B-corporation status here, especially reporting requirements:

http://www.nonprofitlawblog.com/home/2010/05/marylands-benefit-corporation.html

(This guy's blog is very well known and respected in the industry, so I trust the info here)

They also have a third-party oversight requirement, similar to a non-profit BoD, but I'm assuming that CS could merely scam this, as they did the non-profit BoD...and bend facts to fit B-Lab's audit.

I don't see how they could get around the reporting requirements, except to simply not fulfill them and fly under the radar until they're forced to comply, as they've done throughout their history. ie: they're required to post their most recent financials on their website and write an annual report, available to anyone who requests a copy. They are required to do this, now as a public charity, and they simply don't do it.

here is Maryland's adoption of B-corps, for y'all legal junkies: http://mlis.state.md.us/2010rs/chapters_noln/Ch_97_sb0690T.pdf

Posted April 20th, 2011 - 4:28 pm by from Paris, France (Permalink)
If B-corp is just another for-profit with a more or less serious social twist all this speculation is useless.

I and others will hold the General Manager to his promise that CouchSurfing will never become a for-profit.

For me a for-profit B-corporation is not an option. There are few corporations especially in the U.S. who do not make some kind of charitable donations or establish foundations for a noble cause. I don't see this as any different, just a new trendy label. Unless I missed something B-corporations are still for-pofit corporations with the possibility to distribute their profit and even sell out. Arguably any company that sells products or services to consumers or a community provides a benefit to these, or they wouldn't purchase the products and services. I used to work for a company that produces toilet paper. Try to go without that for a while and you'll see what I mean. Heck, to put its social benefit into perspective: given a choice between going without toilet paper and without CouchSurfing I believe most members would let go CS!

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Posted April 20th, 2011 - 9:41 pm by from Livingston Manor, United States (Permalink)
Tina Rosenberg's recent NY Times article on the B-corp (http://opinionator.blogs.nytimes.com/2011/04/11/a-scorecard-for-companies-with-a-conscience/) seems to say the main advantage is formalizing the "benefit" goals so shareholders can't sue directors for failing to do their fiduciary duty, i.e. maximize income. She cites the example of Ben & Jerry's, whose founders didn't want to sell out to Unilever, but pretty much had to because a C corp is legally obligated to enrich its shareholders as much as possible.

Not being forced to be acquired for a pot of money (a problem I wouldn't mind having) does not prevent you from doing so voluntarily.

Posted April 20th, 2011 - 10:10 pm by from Paris, France (Permalink)
Thanks for posting that link, John.

"To become a certified B Corp, or benefit corporation, a business must
pass an examination of how it treats its employees, the environment and
the community."


If that includes how CS has been treating volunteers and members, no way they can pass that test!

The most pressing questions this article raises for me are:

What is the value of CouchSurfing and who would own it if against the explicit promise it went "for profit" (B-corp or whatever)?

My recommendation would be that if that should happen anyway, the shares should go to all members and be based on the number of nights a member has hosted at the time of the change to for-profit.

Posted April 21st, 2011 - 12:09 pm by from Alexandria, United States (Permalink)
I like your suggestion on asset distribution, Uli:)

...one thing to remember, guys: CS must change its legal designation to *something* by 2012; it cannot get its renewal as public charity without the 501c3...and they won't get the 501c3...so the only other option is to close shop.

If CS wants to remain in business, it'll have to go for -profit, because the non-profit option is no longer available. If it must go for-profit (and yeah it's gotta do this...regardless of Mattthew's past promises...there is no third option) I'd rather have them go for a B-corporation certificate, than not. I feel like that designation provides us with some leverage, over the managers, to behave with some minimal integrity...even though it'll give them the opportunity to sell out and get rich (I'm guessing that Casey and Dan 'own' the company, but will watch to see them battle those details out, to their own, anticipated, personal denigration).

If they choose that route, and sell out, they'll have to live with themselves for the rest of their lives knowing that they behaved immorally...making their fortune off thousands of hours, and years, of donated volunteer work and talent.

I wouldn't take that money...no thanks.

Posted April 21st, 2011 - 12:33 pm by from Paris, France (Permalink)
Margaret, based on your post I am afraid I will now have to suspend any contribution of my time to improve CouchSurfing until it is certain that this work is not filling the pockets of those who have mismanaged the organization and despised and abused volunteers and members all this time but benefit the community. I guess I will take the rest of the year off.

Posted April 21st, 2011 - 12:39 pm from Verdun, France
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Posted April 21st, 2011 - 3:45 pm from Milton, United States
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Posted April 21st, 2011 - 6:14 pm by from Moscow, Russia (Permalink)
"the propaganda" is in fact volunteers speaking who've donated hundreds of hours of their time to CS. Even if it might seem to lead the conversation a bit astray (though to me it does not, for IMO it is not a "this site-that site" question, but rather a question of appropriate grounds for people in the community) our volunteering background certainly gives us a right to do so. And since this group is the chat of people who are actively giving their pieces of mind to CS it is probably the most appropriate place for giving out such ideas.

All in all, what place to you think IS the best?

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Posted April 21st, 2011 - 2:40 pm by from Alexandria, United States (Permalink)
hi guys

is it true, Norbert, that as a state-level public charity non-profit, now, CS is owned by the public (and managed by the BoD)? I thought this was the nature of public charities: they're supported via public donation so the public 'owns' them.

I dont' see how they could continue to be a non-profit organization without any state to host them. If I'm not incorrect, the progression goes like this: 1. register within a state as a state-level public non-profit charity. 2. register with the federal gov (IRS) for the 501c3 which offers you federal level charity non-profit status and tax exemption.

If the org fails to get the 501c3 within a certain time frame, which I'm guessing varies by state (in NH, I remember that they expected orgs to get the 501c3 within 18 months of incorporation...and to have it locked up by their 5-year renewal time, or face losing the state-level designation as a charity which can publicly solicit donations).

If CS fails to get the renewal without the 501c3 (which it can expect), how could it continue to be a non-profit? If it legally cannot solicit for donation income, and can't apply for public or private grants, how can it remain a non-profit?

(perhaps someone will have to buy CS to obtain its ownership...like a partner buying into a corporations? I wonder about ownership, too, and how much CS would be worth...without its cash assets, which it would be req to distribute to become a for-profit?)

Posted April 21st, 2011 - 3:47 pm from Milton, United States
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Posted April 21st, 2011 - 7:19 pm by from Moscow, Russia (Permalink)
"For years CS leadership has been accumulating (and then spending) hundreds of thousands of dollars by begging site users to make dotations in order to keep the site running, without ever honestly communicating to the audience the server costs per month ang the amount of money already accumulated."

CS users might start to buzz over a lot more if one provides this simple message to the general public.

Posted April 21st, 2011 - 11:53 pm by from Alexandria, United States (Permalink)
We're trying Joesla:)

few points: I think English Wolf objects to posts which advocate switching to a competitor hospex org...but yeah I understand your point, also: If you can't recommend alternatives, then the critical posting seems rather punitive to members.

regarding financial reporting...if y'all could please click on this link to the 2009 finances I'll explain a few incongruities that have lead us to not trust the managers: http://www.couchsurfing.org/organization_finances_2009.html

First, please look at line 7210, Salaries for officers and directors: $30,5000 is ridiculously low. Other salaries are also low, considering the number (30+) of CS staff now: ~$116,500. You're lead to understand that these people are unbelievably selfless...how nice of them to live around the poverty line, for our benefit, and sacrifice their ability to live a nice life to keep this site online.

...but then look at the other expenses and you'll see untaxed perks out the whazoo. This is what we're objecting to: CS paid staff claims, on their own tax returns, very low income...but actually live fairly nice lifestyles with paid rent, meals, perks, excursions and airfare to brag-worthy destinations. They can even earn side income, since their reported income is so low, and bank the extra...while claiming very little income tax. This strategy would certainly be considered *too creative* by most accountants.

Please see, for example (if we can trust these numbers...I have no audit or 1040 to which to refer since CS stiffed me when I requested these documents) rent: nearly $250k for *one year*...these were hella nice accommodations....where? for whom? for how many? We dont' know. How much of this rent was actually 'cohabitation bonus' paid to CS staff who lived together? again...no clue.

Please see line 8311, travel reimbursements, at >$100k (...so, you want to go to Indonesia with your girlfriend to live on Bali for a few months? no problem...donation income will pick it up)...I've provided oversight for 501c3 non-profits for 5 years now and I've never, ever, seen anything like this, or remotely like this, on any budget....this is simply outrageous for a non-profit of CS'size. It's not broken out, and CS has no reason specifically to travel so much to operate its website, so (again) we can only gape in disbelief, but not analyze, due to lack of info granularity.

Please see line 8425, meals, at nearly $70k: are they catering VIP galas every weekend? Why is this so incredibly high? Plus the office expenses at $37k...why so many paper clips for an org that has no office?

These are questions that, not only alert members, but also charities' regulators and IRS lawyers are currently asking CS managers...which is why they have no filed 2009 1040. Bear in mind: volunteers are not allowed to be paid. Any attempt at 'paying' them via perks, under the table, is tax fraud. Same with paying low wages to employees, yet providing a cushy untaxed life via perks: tax fraud. This is why CS is currently in a bit of negotiation with lawyers from the NH DoJ.

...and why we discuss their decision making, here.



Posted April 22nd, 2011 - 12:08 am by from Paris, France (Permalink)
Go directly to jail. Do not pass Go. Do not collect $2.000.000.

Posted April 22nd, 2011 - 1:16 am by from London, England (Permalink)
So: still no audit details or any of the other documents they are legally obliged to send?

At what point do they have to start paying fines?

Posted April 22nd, 2011 - 8:14 am from Berlin, Germany
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Posted April 22nd, 2011 - 9:11 am by from Paris, France (Permalink)
Many thanks, Norbert. I start to see a lot clearer.

So all CS needs to do is stop delivering ostensible verification checkmarks and refrain from promising considerations such as better search rankings, easier to find couches and "last-minute host" couch status. Plus set up a proper board of directors, terminate illegal employment contracts and re-sign legal ones and a few other things along that line.

How about publishing a balance sheet including the amount of the accumulated "emergency fund" disappearing from scrutiny every year?

Who would own such a non-profit corporation which will have lost any charity status it may have had in the beautiful state of New Hampshire and what control do the owners have over it?

Posted April 22nd, 2011 - 11:29 am from Berlin, Germany
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Posted April 22nd, 2011 - 3:34 pm by from Alexandria, United States (Permalink)
Thank you so much Norbert! I appreciate your taking the time to explain everything so clearly.

So, when the 2012 renewal for public charity status comes due, CS can simply stay as it is, an incorporated non-profit, but it cannot solicit donations deemed "charitable contributions" ....they can just ask for money, outright. Sounds reasonable...and a whole lot cheaper to administer than going the for-profit route....but wouldn't be a vehicle to enrich the founders.

I'm curious also: since CS has no apparent bye-laws, how are any of these details determined? I'm assuming that they never got around to establishing any bye-laws: http://www.couchsurfing.org/group_read.html?gid=7161&post=330266#post360235

Here is the state of California's Non-Profit integrity act...which requires filing of byelaws. I wonder if NH has anything like this...and would be surprised if it didnt' since it's from 2004, and its requirements simply outline a plan for good governance.
http://www.nonprofitlawblog.com/home/files/the_nonprofit_integrity_act_of_2004_v.3.pdf


Posted April 22nd, 2011 - 7:57 pm by from London, England (Permalink)
I'm a little confused - if they are still a public charity until renewal is required in 2012 (assuming as seems likely they are denied that renewal) surely they still have to comply with all the reporting criteria NOW ie provide audits to people who request them? And if they don't do so must pay a fine?


Posted April 23rd, 2011 - 3:05 am by from Alexandria, United States (Permalink)
hi Niall!

yes I think you're correct in assuming that they've been required to pay some penalties; we're guessing that penalties account for some of the ~$79,000 in legal fees spent in 2009 (as reported, anyway...who knows if this is accurate, without the 1040 or audit)....but we don't know what penalties, nor amounts.

And yes: CS is still designated as 'public charity' in the state of NH until 2012, so all rules apply until then...including the requirement to supply anyone, who asks, with the latest 3 years of *filed* income tax returns. http://www.irs.gov/charities/article/0,,id=135008,00.html (These rules apply to state level charities, except if no 501c3 was awarded: the org is then not req to share its rejected 1023 application)

I think CS has *not yet filed* the 2009 tax return because I was told (Casey Shultz, private correspondence) that lawyers were still negotiating which parts of it required independent auditing (very irregular, folks, for a non-profit its size). I was told this news in July 2010, so perhaps they've filed the 09 taxes by now...but 2009 still doesn't show up on the 990 finder site: http://foundationcenter.org/findfunders/990finder/

Posted April 23rd, 2011 - 12:24 pm from Berlin, Germany
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Posted April 23rd, 2011 - 10:19 pm by from Paris, France (Permalink)
Pickwick: "So they could continue as a non-profit corporation, without being a charity, and ask people for money, as long as they were honest about it. You only need to be a for-profit corporation, and issue shares, for two reasons: 1. If you want to distribute dividends to people who have not done anything other than own shares. 2. If you want to sell, because for that you need an owner to receive the purchase price."

That means that the following statement from Casey Fenton's announcement is troubling:

"As you can imagine, this news puts us in a difficult situation: if CouchSurfing can't be a non-profit, what can we be? How do we make the best possible organization to support our members and our Vision?"

It could mean that they are planning to use the refusal of 501c3 charity status to do away with non-profit status alltogether, after having always claimed that:

"CS was incorporated as a non-profit and is seeking federal non-profit status because we believe it's the best way to achieve our mission and the best way to provide our free service."

Or could it be that after all these years, with him being the person in charge of obtaining 501c3 charity status, he still doesn't understand the difference between a non-profit and a charity?

Posted April 23rd, 2011 - 10:24 pm by from London, England (Permalink)
Margaret:

"yes I think you're correct in assuming that they've been required to pay some penalties; we're guessing that penalties account for some of the ~$79,000 in legal fees spent in 2009 (as reported, anyway...who knows if this is accurate, without the 1040 or audit)....but we don't know what penalties, nor amounts."


I thought you once said CS had to pay a penalty to you as the person who requested, and did not receive, their tax returns/audit documents.... is this not correct?

As for BW, I got the newsletter announcing the hookup with Servas ages ago, but have heard nothing since. Has the co-operation gotten off the ground, and if so what form has it taken???

PS Pedalr - welcome to Brainstorm! Do you think you could condense your expressions of agreement into two or three messages? It'd help keep the thread easy to follow - thanks! :)

Posted April 21st, 2011 - 7:12 pm by from Moscow, Russia (Permalink)
"To become a certified B Corp, or benefit corporation, a business must pass an examination of how it treats its employees, the environment and the community."

If that includes how CS has been treating volunteers and members, no way they can pass that test!

One will have to really dig for information to get the correct idea of whats really going on here; since everywhere is merely filled with positive experience of everything and everyone.


My recommendation would be that if that should happen anyway, the shares should go to all members and be based on the number of nights a member has hosted at the time of the change to for-profit.

It would be only decent to also include volunteers' efforts here but since CS keeps no track of those (nobody can tell you've ever volunteered once you quit).

Posted April 21st, 2011 - 7:15 pm by from Moscow, Russia (Permalink)
Gosh HTML works no more... Sorry for no italics :(
'Advanced editor' is so helluva advanced that it does not work under the lates Opera

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Posted April 23rd, 2011 - 10:46 pm by from New York, United States (Permalink)
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Posted April 23rd, 2011 - 10:32 pm by from Paris, France (Permalink)
Hi Rob. Let's just say you agree with everything written in this thread so far. I believe we got the message ;-)

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Posted April 23rd, 2011 - 11:10 pm by from Paris, France (Permalink)
You can legitimately accuse CS of a lot of things, but excessive censorship is not one of them. Only that they censor themselves by not communicating on subjects relevant to members and displaying lack of transparency and responsiveness. But that's a different subject.

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Posted April 24th, 2011 - 8:42 am from Berlin, Germany
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Posted April 24th, 2011 - 9:48 am by from Slavsk, Russia (Permalink)
<<<<2ou can authorise shares by amending the corporate bye-laws, but this requires individuals to buy them at realistic value, and that money would then be available to the corporation to run and expand business. <<<<<

pickwick what is going whit you''
do you realy find your self and feel good in german¡¡¡

as everyone knows,,it was anounced oficialy,,i stolen once american dream,,what made i supose after someone steal and some inteligence from this badly robed people,,..
but from germans,,i realy still stolen nothing..

and despite that you are handling there and want to sell all my home in present of my self,,..

than you know if you able handlng like that,,than of cause its me who knows most real prise for that,,and has bigest interese to pay and make clear this as you wrote real value of of cs hsre holders..

my house its not so cool as averige homelesss shelter,,and you can't get there everything for free and just because sharity,,..

if we need real maket prise,,than its better to compear whit something as bekingam palace,,..
next week there is going to be huge surfers celebration,..
and the prise for few night and eating dancing and talkng poisbility you can find as everyone in virtual space,,
and still be welome there,,..its big and still not all places opupited,,..

if you don't believe,,ask some surfers who surfed my couch,,they left after whit the same amount of inteligence if not more,,what given them imagination about actual and real values..


Posted April 24th, 2011 - 3:17 pm from New York, United States
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Posted April 24th, 2011 - 6:16 pm by from Paris, France (Permalink)
Sergio, welcome to Brainstorm. A simple "I disagree" instead of "Ridiculous !!" could have avoided that little exchange ;-).

Posted April 24th, 2011 - 11:15 pm from Berlin, Germany
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Posted April 25th, 2011 - 12:48 pm by from Paris, France (Permalink)
"If it ever becomes a corporation, ownership should be distributed to the
community. Because it was run as a non-profit charity, it should not become
owned by management."


CouchSurfing International Incorporated is a corporation and it was never run as a non-profit charity.

Sergio, I believe you are saying very much the same as most here, only that you got hung up on a statement you misinterpreted. These are complex issues which aren't easy to understand even for those of us who have been looking into them for years, mainly because the CouchSurfing Corporation hasn't been honest and open. No matter what happens, the people who are part of this community today will still be there and one website can replace another as has always been the case. Or did the internet come to a halt because the original CS, CompuServe, stopped operating independently?

Posted April 25th, 2011 - 12:59 pm by from Alexandria, United States (Permalink)
hey guys!

Happy spring...wow, it's a gorgeous warm sunny day here in DC. Hope the same for y'all!

"We need to get beyond these accusations and find the land of good management - with or without the original management."

Thanks Worldlytreasure; this is exactly what we have been trying to do, with Pickwick's immeasurable help, since I joined Brainstorm in 2007. He has historically been a huge piece of that effort.

If you go back and read his posts,on this thread and others, you'll understand that Pickwick is definitely not excusing the CS management's decision-making because he suspects that their political views are in alignment, or because they're hipster white boys, or any other characterization...in fact the opposite: he's suggesting that we simply limit our discussion of their role in CS to their performance, as managers, not as people. They've performed poorly as managers...but it doesn't make them generally bad people....that's all he's saying.

If y'all could take a moment to re-read the guidelines stated on the homepage for this group, I think we'll all be able to look forward to a more productive discussion. Generally, we ask that posters back-off on the drama and strong language (Uli's suggestion to change 'ridiculous!' to 'I disagree' is perfect!)

...other that that: go nuts. CS has always been really great at not censoring posts...so feel free to discuss whatever you like, as diplomatically and respectfully, as you can. Welcome to Brainstorm Pedlar and Worldly:)

Posted April 25th, 2011 - 1:23 pm from New York, United States
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Posted April 25th, 2011 - 1:40 pm by from Alexandria, United States (Permalink)
Indeed, we're all worried about the appropriateness of that part of a for-profit transition: how legally permissible (...or nice?) would it be to solicit volunteer labor and donations to build a community-based website...and then switch to for-profit status...potentially enriching its founders?

We're trying to figure that exact question out, right now.

Be aware, also, that Casey has not announced a definite move to change to a for-profit organization. His language only seems to suggest that this is what they're considering.

Posted April 25th, 2011 - 1:52 pm by from London, England (Permalink)
Yes. It's important not to assume they're definitely going for a move to B-Corps. We just don't know enough yet.

I think that to advertise yourself as a non-profit organisation and accepting donations on that basis while actively considering a change of status (and having communicated that consideration to team members) is very dodgy and could potentially be used in a lawsuit.

Posted April 25th, 2011 - 2:06 pm by from Paris, France (Permalink)
"I think that to advertise yourself as a non-profit organisation and accepting donations on that basis while actively considering a change of status (and having communicated that consideration to team members) is very dodgy and could potentially be used in a lawsuit."

Good point, Niall. If the status has always been more or less amgibuous and they have dangerously played with fire using the term "charity" for years, at some time with any disclaimer, ever since a) they received notification that 501c3 status has been denied and b) they are considering going for-profit they are definitly taking major risk of deceiving donors by continuing to use the terms "charity" and "non-profit".

I would have hoped that now that they have hired a full-time legal coordinator paid with "verification donation" money they would get better advice and follow it.

Posted April 25th, 2011 - 4:31 pm from New York, United States
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Posted April 25th, 2011 - 4:46 pm by from Paris, France (Permalink)
"Many of you are already numb to this stuff, having been exposed to the
messiness for years. I got it all in one dose over a very short period of time."


Perhaps some of our posts should carry a health warning ;-)

Don't worry, just because we have seen so much and very little surprises us any more doesn't mean we accept or excuse any of it.

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Posted April 26th, 2011 - 2:26 pm by from Paris, France (Permalink)
"That means that any for-profit entity which uses the assets acquired under charity status (which by the way, once it was granted in New Hampshire, became effective retro-actively since the day of incorporation) will need to buy them first, or indeed the people who will acquire any newly issued shares, and thereby become owners, will have to pay for the shares what the assets are worth"

In that case we better stop denigrating the website code as a liability rather than an asset and start agreeing with what CS has been claiming since 2007, i.e. that "it would cost anywhere between $250.000 - $2.500.000 or more to develop a similar site". As a lot of work has been put into the website since then I guess it is save to assume the value is towards the high end of that range. And that doesn't even include the value of the member database.

I am still not clear about who would be the beneficiary of that money in the case of a divestiture. A 501c3 charity or the government?

Posted April 26th, 2011 - 2:52 pm from Berlin, Germany
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Posted April 26th, 2011 - 4:13 pm by from Paris, France (Permalink)
PEDALR, I don't have the impression you are particular good at reading "tone" and understanding these complex issues. Unless you have concrete questions it would therefore be better if you refrained from commenting on each and every post of this thread in a group which you discovered three days ago. You cannot just jump into something like this and expect to grasp it a minimum without doing your homework first. Plenty of reading in this group and its parent group if you want to go back further. Or just ask Callum.

Posted April 26th, 2011 - 4:37 pm from Macau, China
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Posted April 27th, 2011 - 12:13 pm from Berlin, Germany
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Posted April 27th, 2011 - 12:57 pm by from Alexandria, United States (Permalink)
...indeed; thanks.

Also, Pedlar, people can feel a sense of ownership or love for an organization without being in a position to receive any direct monetary benefit from it.

Many people here, on BS~R, are long term CS volunteers, some of whom coded features that we all use on this website; others introduced policy initiatives or tools that are now in place....none of us has ever been paid by CS (and will never ever be hired by it! That's for sure!:)

This group may, at first, seem like a bitch session, but it's the only group on CS devoted to quality control and salon-style discussion of operations and oversight. Our discussions suggest to the managers that general members pay attention, care, and are watching how the site matures.

ok Pickwick: looking at a post-2012 scenario, with the goal of "scaring them off bad options", I'm assuming that CS will not receive it's public charity status renewal from the New Hampshire DoJ, so are these the main choices for their legal status?

1. remain a non-profit, but with no charity status at either state or federal levels, and pay all taxes while asking for money for the operating budget (not deemed 'charitable donations' since CS would not be a charity)

2. change to a for-profit company: donate all cash assets to charitable orgs, offer the site for sale to the founders, and run as an LLC with pop up ads and premium membership fees, in addition to verification.

3. change to a for-profit B-corp: same as above but with a bit more transparency, 3rd party oversight, and tax breaks.

4. close shop

Posted April 27th, 2011 - 2:05 pm by from Alexandria, United States (Permalink)
http://www.sos.nh.gov/corporate/PDF/Nonprofit.pdf

Please see pages 6-7 of this document for info on dissolution procedures.

It also states a 5-year renewal of all non-profits charters...but it seems that they only need to file a return and pay the $25 fee? I'm assuming that one of the charities' regulators looks over the governance and finances, too...not sure there, but I remember talking to one of their lawyers and her saying that they reviewed the orgs upon renewal...and they were expected to have the 501c3 at this 5-year deadline.

Please see this link for info on penalties: http://doj.nh.gov/charitable/index.html

It describes the penalty for not filing a financial report on time.

Posted April 27th, 2011 - 2:12 pm from Berlin, Germany
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Posted April 27th, 2011 - 2:45 pm by from Alexandria, United States (Permalink)
thank you so much for the very clear explanation!

It's unfortunate, but true, that fear of public exposure of poor or corrupt decision-making has always been the only tool to motivate change in how this organization is run.

I remember, years ago, when we all tried to politely suggest improvements to CS...and were always ignored...or bullied with name-calling ('conspiracy theorist' being the most popular) for speaking too close to the truth.

I understand that the managers were probably overwhelmed with duties, and couldn't sort through millions of emails suggesting changes or discussing governance on the groups, but it's unfortunate that they didn't try to, at least, respond politely. It would have been really easy to appoint someone within the CS inner circle to reply, here on BS or in the Ambassador Public group, daily, for just an hour or so...just to keep the 2-way dialogue alive...and impress us with their competence and 'customer service'.

I recently went through a college application process with my daughter...and visited several of the college review sites online. All of them have discussion threads for each school...and most of these threads have college admissions personnel who post and answer questions. I was so impressed with many of the admissions officers who took time to answer questions and chat with us online; it was a fantastic opportunity for them to impress potential 'customers'....and those who didn't have a strong presence on the sites looked bad in comparison. Most admissions officers would visit each site for an hour a day, or so, and keep the discussions updated with correct information...and stamp out gossip or rumors.

If CS had done this, back in 2006-2007, discussions here on BS would have never become negative or overly critical....and the managers would have better retained control of the organization's image, which is now quite damaged.

Posted April 27th, 2011 - 2:56 pm by from Paris, France (Permalink)
Margaret: "2. change to a for-profit company: donate all cash assets to charitable orgs, offer the site for sale to the founders, and run as an LLC with pop up ads and premium membership fees, in addition to verification."

What is the source for this restriction to "cash assets" rather than just "assets" and the option to offer the site for sale to the founders?

What would be the definition of "the site"? The computer code, the member databases and all content including member profiles?

Posted April 27th, 2011 - 4:49 pm by from Alexandria, United States (Permalink)
http://www.irs.gov/charities/charitable/article/0,,id=123368,00.html

You're quite right, Uli: I was too narrowly defining assets by mentioning only cash assets. Of course the worth of the database and code and content would have to be determined...you're correct. I guess that all of our postings belong to CS, also (...not that they're worth anything!) which brings other interesting questions. For example, I've been contacted by a few people who are in the process of writing books on CS and they wanted links to many conversations we've had on BS and BS~R. I wonder if they will have the rights to publish those posts without paying CS for their use?

salient quote from the link:

"A charity's organizing document must limit the organization's purposes to exempt purposes set forth in section 501(c)(3) and must not expressly empower it to engage, other than as an insubstantial part of its activities, in activities that do not further those purposes. This requirement may be met if the purposes stated in the organizing document are limited by reference to section 501(c)(3). In addition, an organization's assets must be permanently dedicated to an exempt purpose. This means that if an organization dissolves, its assets must be distributed for an exempt purpose described in section 501(c)(3), or to the federal government or to a state or local government for a public purpose."

Posted April 27th, 2011 - 5:21 pm by from Paris, France (Permalink)
Margaret, these provisions seem to apply to actual 501c3 charities. We may have discussed this before: Are they binding also for state charities such as CS who have applied for 501c3 status and have been rejected?

Posted April 27th, 2011 - 6:33 pm from Berlin, Germany
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Posted June 2nd, 2011 - 5:48 pm by from Liverpool, England (Permalink)
Margaret...I am from Liverpool, England and in my previous life before I retired I worked extensively for 20 years in the Community & Voluntary Sector in England setting up & preparing Development & Business Plans for Community Charities and Community Companies and Co-operatives; there is a mass of skilled expertise within UK law in this area look at ICOM in Leeds.

I have only just come into this debate about what is happening to the Legal Structure of CS; obviously US Law will be different to UK Law.

I was always under a misapprehension that CS was a Charity filed in New Hampshire/USA ....Under UK Law if you state you are a Charity without registering with the Charity Commissioners and receiving a Charitable Registration Number it is illegal to operate and solicit donations.To be a Legal Charity You have to return annual audited accounts comply with Employment Legislation and a host of other Legal requirements particularly if you are employing staff.I had always assumed this was being done. The Law is quite clear on all these points here and registration is a rigourously enforced process.

I have been a couchsurfer now for 4 years and hosted well over 250 CS'ers in my home so I am now quite concerned picking up on this debate about our Legal Status.

I am currently reading through all the messages and following up debate on this current site...
But quite shocked to read some of the statements being made; being a simple person I only have to multiply 25 $ x 2.5 million members and that is a lot of money...


I will continue reading and researching at this point..

hope I have helped


Rayofsunshine

Posted June 2nd, 2011 - 6:19 pm from Berlin, Germany
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Posted June 2nd, 2011 - 7:12 pm by from Liverpool, England (Permalink)
Pickwick....'The 18 year age' on my profile is part of an ongoing tryst I am having over 'new' default Host search screen age selection; I believe it is excluding many older couchsurfers from being considered as a Host;it is also very discriminatory against rural/small village CS members...see this group message board.

As a preliminary plunge into the debate, has the Executive not considered registering/incorporating CS as a Non-profit Co. or Charity in another Country like the UK or Germany or France were there are many members? Does it have to be in the USA??

In the UK there are 4 'Heads' of Charity under which you can register and one of them is 'Education' and one great belief I have is Couch Surfing is very Educative in its International Exchange values.

If this were considered CS could then look much more closely at issues like Educational Bursaries or Support Projects in the Developing Countries were many people do not have access to Computers. At least we would know that our donations were being supportive of people in the poorer nations were many CS members Travel.

Lastly I would really like to know under what type of Legal Instrument or Governance has CS been operating. Whose signatures access Bank Accounts and sign Cheques and under what Authority ??.

I have just looked for the first time at the ' Income & Expenditure' Statements for previous years and they are very simplistic. In UK this would be the sort of General Financial Statement of a Local Community Organisation generating up to £20k/ 30k a year.

Posted April 26th, 2011 - 9:12 pm from Milton, United States
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Posted April 27th, 2011 - 3:16 am by from Alexandria, United States (Permalink)
ouch Michael!

I've been posting the foundation center site for years now! Totally: look at the flagged posts, or for 990-finder, or any of my 501c3 discussion: they all point to foundation center. I'm glad you discovered this worthy site!!

...and Ken, I'll email you: perhaps they need to be changed, because (...ahem) they don't understand their jobs?

Posted May 5th, 2011 - 10:42 pm from Berlin, Germany
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Posted May 7th, 2011 - 4:10 pm by from Slavsk, Russia (Permalink)
look people there is even this organisation verry useful for this our coman mission..: Uniting Couches of the World

http://www.facebook.com/home.php#!/pages/Osama-Bin-Laden-Campione-mondiale-di-nascondino/119202051427794

and btw this gay as there you see have this status: 501 C 3
what you need..

what can be better?

Posted May 7th, 2011 - 5:23 pm by from Copenhagen, Denmark (Permalink)
Hi, all!

As I have already written to some of you, I am doing my BA final thesis on Interpersonal Relationship Marketing with case study on CS, so I needed to research more to clarify its status.

Here is part of your conclusions with some other discoveries that I made (pls correct me)*:

*I use the term "non-profit organisation" because it is the European term for the American term of "non-profit corporation", they mean the same thing.

1. We know that CS was not given the 501(c)(3) status only from what Casey says. I see that the list of charities was last updates on 6 April 2011 (http://doj.nh.gov/charitable/documents/charlist.pdf ), so it is a little bit confusing, especially that they updates in March 2011 the list of org that closed (http://doj.nh.gov/charitable/documents/closed_charities2011.pdf)
Anyway, I tend to believe Casey because it is true that CS doesn't fit to that category because of its mission.

There were 300.000 organisations which were refused the 501(c)(3) in 2011. SO it makes more sense.


2. There are 28 types of non-profit organisations called 501(c). ALL 28 types are exempted from paying tax. ALL 28 can receive donations.
On short: http://en.wikipedia.org/wiki/501%28c%29
IRS guide: http://www.irs.gov/pub/irs-pdf/p557.pdf

3. Charities-501(c)(3) is only one type of the 28 types of non-profit organisations. The main difference is that those (corporations of individuals) who donate to a 501(c)(3) charity are also exempted from paying some taxes. That is why most of companies prefer to donate to charities.

CS would have needed to "send papers" to members, only if they wanted that their donation is exempted of taxes. (which is ridiculous to happen). So I believe that the idea that CS didn't want to receive 501(c)(3) for this reason is irrelevant.
Since I think that CS gets the majority of its money from individuals, the lost of 501(c)(3) means nothing.


4. Clear reasons why CS doesn't fit as charity because of its mission:

http://www.irs.gov/pub/irs-pdf/p557.pdf - page 26

5. CS can continue to receive donations in its quality of nonprofit organisation and is still tax exempt.

As I said, ALL non-profits can receive donations and are not obliged to give donor any "papers" (For example, think of people who donate through sms to a number seen on TV).

=> there are 2 types of tax exempts:
1. Tax exempt of the revenue that CS has gathered (like corporations pay tax for profit).
2. Tax exempt from the profit of corporations and the salaries of individuals that they normally pay to the state.





What are the options of CS from now on:

1. I believe that CS can and should apply for 501(c)(7) — Social and Recreational Clubs. Reading http://www.irs.gov/pub/irs-tege/eotopicg80.pdf, I believe it fits much more to the mission of CS of creating "inspiring experiences".


"Generally, social clubs are membership organizations primarily supported by funds paid by their members. The tax exemption of social clubs has the practical effect of allowing individuals to join together to provide themselves recreational or social facilities on a mutual basis, without further tax consequences, where the sources of income of the organization are limited to receipts from the membership.
...
Clubs must be organized for pleasure, recreation and other non-profitable purposes. The Service has held that these other nonprofitable purposes must be similar to providing pleasure and recreation.
...
In general, this exemption extends to social and recreation clubs which are supported solely by membership fees, dues, and assessments. However, a club otherwise entitled to exemption will not
be disqualified because it raises revenue from members through the use of club facilities or in connection with club activities."


=>>>> CS can simply call "Premium Members" those who want to pay for verification.

=>>> Of course, CS can choose to ask for membership fees, which will decrease the number of members but it will increase the quality.For example, there are thousands of inactive empty profiles gathered since 2004 till now. How come there are only around 2000 online on a constant basis from the total of 2,7 millions?



2. To turn to B-corporation (Benefit Corporation). According to its mission and activities it would be ok, but I think that to do this it also has to go through dissolution (give its assets to the state/a charity)

3. CS can transfer to for-profit status. For this, it has to give all its assets to a charity org with the same status or to the state.

4. Shut down the website

5. Shut down the website, give the assets to the state and start a brand new for-profit CS from zero.

For sure, CS cannot be bought by Facebook, Google or anybody.


Maybe there are other options, too.

Anyway, I am convinced that even if CS asks for membership fees or because a for-profit, it will continue to survive. Nobody stopped using Facebook just because it makes its owners rich!
Plus, I think that the majority of CSers don't even know that CS is a non-profit (I met many of this kind...especially because of the confusion with the term "corporation"). Most of them have no idea about the suspicions about how CS founders use money and about this group.

So, I thank you all for helping me discover some new perspectives on CS.


A smile,
Anca

Posted May 8th, 2011 - 11:03 am by from Copenhagen, Denmark (Permalink)
I've been reading more literature about it, and it makes even more sense for CS to be a Social club because it's mission is to assure exchange of services among the members and only members can access its services, whereas for charities, their purpose is to offer "public good"(to everyone).

And since non-profits are divided in 28 types according to their PURPOSE, not by the way they make the money from...

Posted May 9th, 2011 - 1:17 pm by from Alexandria, United States (Permalink)
thanks so much Anca,

I appreciate your willingness to immerse yourself in this really boring minutiae regarding US tax and legal designations! I agree with all of what you've said, except that I don't think CS would be successful in applying for the 501(c)7.

Main problem: the political climate.

CS will not receive any 501(c) designation, even if it reapplies under the 501(c)7, because the US government is really tightening how, and to whom, they award tax-exempt designations. The government, prior to the economic downturn, awarded 501(c) stance rather easily...especially prior to the 2002 Sarbanes-Oxley Act, which addresses regulation of for-profit corporations http://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act

These regulations are increasingly being applied to non-profits and they are very very strict; any non-profit receiving tax exemption must demonstrate near perfect governance and financial decision-making to adhere to these regulations...which, indeed, are not yet required legally, but have influenced the entire climate of non-profit regulation. Federal law is expected to be changed to require non-profit regulation to be similar to the Sarbanes-Oxley reqs for corporations...and this general expectation, that non-profits demonstrate their competence and financial soundness through transparent operations, will not be met for CS. They will not be able to pass the test for IRS tax-exemption, regardless of which category, especially since they would be re-applying for a third time: no chance of a win, there.

The US government, also, needs the income...they are not awarding tax-exemption to many orgs anymore. It's really difficult to get it and keep it....and CS doesn't have the degree of competence required, as per their past management performance.

I still continue to think that their best bet, for longterm existence, would be restructuring as a for-profit B-corps...but this will introduce ads on CS' pages....and yeah this reorganization screws the volunteers who built the website ("thanks for the free labor! see you at the relaunch after-party....NOT!").

Posted May 9th, 2011 - 6:53 pm from New York, United States
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Posted May 9th, 2011 - 8:15 pm by from Alexandria, United States (Permalink)
thanks w.t.:
Your suggestion, of CS becoming an affiliate of an existing 501c3, was suggested many times, over the years....I too always considered it a great solution. It would, however, require handing over control to the umbrella-org's BoD...I can't imagine Casey ever doing that.

" it would be easier to do so by simply giving CS to charity. THEN starting another completely independent for-profit company that works in a related or unrelated field."

This is, essentially, what CS will have to do to become for-profit. They will need to give all assets away to charitable non-profit orgs (or org) and start from zero.


Posted May 18th, 2011 - 10:45 am from Welcome Islands, South Georgia and the South Sandwich Islands
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Posted May 19th, 2011 - 5:32 pm by from Alexandria, United States (Permalink)
The transition to for-profit status will take a few years, I'm sure, and until then: CS is a non-profit organization.

I found today a terrific resource for anyone interested in non-profit governance and legal questions: Independent Sector's Resource Center for Good Governance and Ethical Practice....it's got everything regarding proper non-profit management in one place. GuideStar announced it's unveiling here:
http://www2.guidestar.org/rxa/news/articles/2011/independent-sector-launches-new-resource.aspx?hq_e=el&hq_m=1106495&hq_l=39&hq_v=a4f77f5000

Here is the homepage: http://www.independentsector.org/governance_ethics_resource_center

It has the best page of legal explanations of what, exactly, a public charity is right here: http://www.independentsector.org/governance_ethics_resource_center (you may need to join the website to read this page...easy and free to sign up!)

I have been crowing about CS tightening its governance, financial decision-making, and ethical management for literally years now...and they can't claim ignorance of it anymore. This website is really clear and easy to find...no excuses for non-compliance during their remaining time as a non-profit.

Posted May 19th, 2011 - 5:53 pm by from Alexandria, United States (Permalink)
...a good start in ethical management (rather than ad hoc incompetency) would be for CS to increase their operational transparency. This article lists 6 actions to increase transparency within any non-profit; CS does none of them, currently:

http://nonprofit.about.com/od/nonprofitfinances/tp/guidetotransparency.htm

I'm gonna challenge Casey and Dan to implement even one of these suggested changes...glove down, guys:)

Posted May 14th, 2011 - 4:17 pm by from Rio de Janeiro, Brazil (Permalink)
To all of you who have written that you would be happy to see CS turned into a for-profit organisation. (At least this would be honest...)

If it's for-profit, just who pays? Certainly membership fees will become mandatory. Have you considered those of us who won't be able to afford those fees and therefore will have our profiles deleted? As well as another option for travelling cheaply?

I know of at least 2 thought-provoking contributors to CS who choose to live without money. Is CS going to accept barter in special cases? I myself made only 83€ for a whole year recently. I used to be a member of Greenpeace, Amnesty International, and Pallassos Sernse Fronteres [Clowns Without Borders]. As much as I morally support the wonderful work that these 3 organisations do, I CANNOT afford to support them financially, and have had to allow my memberships to lapse. Will this become the case with CS? (If I had a BIT of money to spare and had to choose which organisation to subscribe to, CS would be lower down than any of those 3... and several others besides.)

Many CS members (including myself) have never owned a credit card and have no wish to have one (or are excluded from getting one). How is CS planning to collect its fees? Do you know how difficult it can be to find a friend willing to buy a Ryanair ticket for those of us without this piece of plastic? In the case of Ryanair, we can argue that it's the cheapest way to travel and that we REALLY need to get to our destination. In the case of CS, those same friends might consider it a luxury that we could well do without... and they can spare themselves the risk of Internet fraud as far as THEIR credit cards go.

Please think again before being happy with the for-profit option.

Posted May 14th, 2011 - 8:02 pm from Toulouse, France
This member profile has been deactivated

Posted May 15th, 2011 - 3:59 pm from Berlin, Germany
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Posted June 1st, 2011 - 11:38 am by from Rio de Janeiro, Brazil (Permalink)
@ Pickwick from Berlin, Germany:
I'll admit that I got pretty pissed off when I read this reply. Just where do you get off being so judgemental about other people's life choices???

For your information, no banking organisation in the world would offer me a credit card account. In one recent year my total income was 83€. In the present year, we've only just entered June and I haven't earned 30€ yet.

I am spending a lot of my time getting involved in the "Spanish Revolution". I am also active in peace and environmental groups. My clown group puts on free performances for good causes. In short, there are things that are MUCH more important to me than money.

I have NEVER been able to afford driving lessons, so I'm going to hitch to Germany ["getting rides from others when 'needed'"] soon to take part in the big Anti-Nuclear demonstration there.

BUT... I also happen to have a web-site where anybody from anywhere in the World can enter, read or even print out my children's stories without paying me a single cent.
I COULD have opted for a free site - which would have meant that my readers would have to put up with advertising over which I had absolutely no control. I chose to PAY (out of my own pocket) for a fee-paying site so that other people could benefit from it for free. [And the ONLY way that I am allowed to pay is via credit card, for which I ask this favour of friends - making sure that I repay them the full amount.]

Is THAT "alternative life style choice" enough for you???

Or do you just look out for opportunities to score cheap points off other CSers?

Posted June 1st, 2011 - 11:42 am by from Rio de Janeiro, Brazil (Permalink)
In case you're wondering, I have a vegetable garden and have also learned to recognise several edible plants that grow wild...

Posted June 1st, 2011 - 12:18 pm from Berlin, Germany
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Posted June 1st, 2011 - 4:20 pm from Macau, China
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Posted June 2nd, 2011 - 12:13 pm by from Rio de Janeiro, Brazil (Permalink)
@ Pickwick
"I would have a lot more sympathy for the 'life style' you describe if you didn't brag about it quite so much, weren't so full of yourself, and didn't show such a sense of entitlement."
Selbstherliches Arschloch!
I didn't "brag" about it until you criticised me [and others like me] - without ever having met me - in that previous post about "does not really fully convince me as an alternative life style choice".

I perhaps work just as hard as you do, but you do it for a wage and I do it for causes that I believe in.

NONE of the drivers I have hitch-hiked with ever thought that I was being a parasite at their expense. Many have told me how glad they were that they picked me up. This isn't bragging because I know that many other hitch-hikers have had exactly the same response from drivers.

And now I have no more time to waste with your type of prejudiced, arrogant venom. WTF are YOU doing on CouchSurfing???

Posted June 2nd, 2011 - 12:54 pm from Berlin, Germany
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Posted June 2nd, 2011 - 2:38 pm by from Slavsk, Russia (Permalink)
btw,,verry intereting,,realy..
who is subject of this thread,,may be you know??

Posted June 2nd, 2011 - 9:47 pm by from Rome, Italy (Permalink)
@jimmsfairytales0com

If you ever want I think you can get one of those rechargeable prepaid cards, no need to have a bank account. You can use those cards online almost everywhere. But friends are here also to help so they are welcome to help you for your online expenses :-)

Posted May 23rd, 2011 - 9:30 am by from Rome, Italy (Permalink)
Casey Fenton isn't saying what kind of structure CS will become. If it will still be a non-profit organization then the future can be even better.

But if it will be a for-profit organization then we got really bad news.

Maybe CS can't be a charity but there exists many other kind of
non-profit organizations as well, why not "501(c)(3) Educational" or
"501(c)(7) Social and Recreational Clubs"? They too are tax-exempt.

Posted May 23rd, 2011 - 9:35 am by from Paris, France (Permalink)
"Maybe CS can't be a charity but there exists many other kind of non-profit organizations as well, why not "501(c)(3) Educational" or "501(c)(7) Social and Recreational Clubs"?"

Because of this:

http://www.couchsurfing.org/group_read.html?gid=7621&post=8603025#post8822387

Posted May 23rd, 2011 - 12:09 pm from Berlin, Germany
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Posted May 23rd, 2011 - 12:20 pm by from Paris, France (Permalink)
"As you can imagine, this news puts us in a difficult situation: if CouchSurfing can't be a non-profit, what can we be?"

Posted May 24th, 2011 - 11:41 pm by from Rome, Italy (Permalink)
Yes, I read that part before but I was still hoping that it's referred to a charity non-profit and not to all kind of non-profit.

I think it's weird that it is not possible to create a non-profit organization for such a big entity like CS that is mainly focused on a completely non-profit hosting. I'm sure that there exists a solution to maintain the non-profit status (as already suggested). How can the government force you to become for-profit? This is nonsense. And even in that case you still could give all the assets away to a new non-profit organization, even somewhere else, why not Canada for example. The point is if the CS owners really want this and until we get other news we still can have some hope about...

Posted May 25th, 2011 - 6:44 am by from Paris, France (Permalink)
"I think it's weird that it is not possible to create a non-profit organization for such a big entity like CS that is mainly focused on a completely non-profit hosting."

It's "non-profit" for the hosts who enable the free service by donating their hospitality. CouchSurfing International Inc., however, has annual revenue in excess of $ 2 million via "verification", donations and sales of CS gear and puts profit (non-spent income) into the bank every year.

"if the CS owners really want this"

CS isn't owned by anyone in particular, or if so, then by the community. Not the founders, board of directors or managers if that is what you assume.

Posted May 25th, 2011 - 10:53 am from New York, United States
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Posted May 25th, 2011 - 10:07 am from Berlin, Germany
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Posted May 25th, 2011 - 10:18 am by from London, England (Permalink)
"I also assume that in this group the percentage of tax payers is higher than in the average membership, and that may also explain a lot."

Well, VAT/sales tax is also a type of tax you know...

Posted May 25th, 2011 - 10:19 am by from Paris, France (Permalink)
"I also assume that in this group the percentage of tax payers is higher than in the average membership, and that may also explain a lot"

as are the professional and life experience and the resulting scam awareness and sensitivity levels...

Posted May 25th, 2011 - 11:05 am from New York, United States
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Posted May 25th, 2011 - 11:33 am by from Brigg, England (Permalink)
maybe I am wrong, but surely this a non-starter, a dead discussion.
From a legal point of view you can make a for profit into a charity, but it doesn't work the other way around. You can't make a charity or non profit into a for profit organisation.

- Amongst othe things people have donated there time and their money for free ...they have created CS.
- since going private would be taking peoples input and turning it into someone elses asset ..they could sue
- Secondly the tax authorities could also sue since those "donations" of money would now be regarded as charges and therefore should have been taxed.

bye

Posted May 25th, 2011 - 12:00 pm from New York, United States
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Posted May 25th, 2011 - 12:08 pm from Berlin, Germany
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Posted May 25th, 2011 - 12:33 pm from New York, United States
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Posted May 25th, 2011 - 12:46 pm by from Paris, France (Permalink)
"The valuation would be in the $$Billions."

That's overly optimistic considering how easy it is to set up such a site, and would largely depend on how many people stay on in the case of a sale or switch to for-profit. Few organizations and products last forever. Remember Hospitality Club, Netscape, AOL, CS (CompuServe), etc.?

As for the tools, most of them are "best in class". Only that that class shouldn't even be the reference. Considering the more than seven years experience, huge volunteer base, long list of suggested improvements and over $ 2 million of annual revenue the tools should be significantly more efficient and reliable, as you point out with the difficulty to perform the main function of the website: match guests with hosts.

Of course this has to do with being willing and able rather than the legal status of the organization.

Posted May 25th, 2011 - 1:38 pm from Berlin, Germany
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Posted May 26th, 2011 - 12:33 am by from Brussels, Belgium (Permalink)
"1/200 of the value of facebook"

It doesn't work like that. "Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2)." On top of that, as has been pointed out in this thread before most members of CS don't have a high income - with all the developing countries the income of the average FB user might be actually less by now, but FB did manage to get a big part of the high income folks. Another thing: how to monetize? Without scaring away current active members that is. A 1000 active people ditching CS for another network for one reason or the other could be a big loss for the entire network with many more people following. You see this with Wikitravel, it's still the biggest, but after it was sold off to Internet Brands without any influence of the community the site's spirit kinda changed - and the quality went down. (FYI, IB also has been in touch with Dan Hoffer, already back in 2006.)


"the tools provided are so sad compared to what they could be."

Totally agree.

Posted May 26th, 2011 - 9:13 am from Berlin, Germany
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Posted May 26th, 2011 - 9:28 am by from Paris, France (Permalink)
"New members may no longer have what we are fond of calling 'community spirit', and may just see the network as a tool. They may not be so easily disappointed by bad management or selling the network."

True. They are likely to be disappointed by dropping quality of service as the most active hosts and volunteers leave and the surfers are left to themselves wondering where all those promised couches are and if they will ever get a return on their verification payments.

Posted May 29th, 2011 - 2:42 am by from Alexandria, United States (Permalink)
it works the same for the volunteer labor: initially, they are attracted by the ideals promoted by CS, and want to jump aboard...but, as CS grows and gains market recognition, volunteers view their volunteerism as a chance to put CS on their resume; they 'know people' in a popular industry, and can trade on this insider status...hence the stampede to apply for 'collectives', that we've seen in past years, where no salary is used for incentive. Salary is less valuable than brag-worthy work experience, however uncompensated, for a cool org.

http://www.insidehighered.com/news/2011/04/15/unpaid_internships_stir_ethical_and_legal_debate_at_colleges_and_businesses

Posted May 25th, 2011 - 12:00 pm from Berlin, Germany
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Posted May 25th, 2011 - 11:48 am from Berlin, Germany
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Posted May 25th, 2011 - 12:18 pm from New York, United States
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Posted May 25th, 2011 - 2:05 pm from Berlin, Germany
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Posted May 25th, 2011 - 3:31 pm from New York, United States
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Posted May 25th, 2011 - 3:40 pm from New York, United States
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Posted May 25th, 2011 - 4:46 pm from Berlin, Germany
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Posted June 2nd, 2011 - 8:04 pm by from Liverpool, England (Permalink)
I may well be jumping in here with both feet as I am still reading and evaluating all these messages and info. sites..

But....

Many of the Community / Voluntary Sector Organisations myself and Legal colleagues helped set up on Merseyside over the past Twenty Years actually operate with two levels of Registered Legal Organisation.

There is a Not for Profit ' Distribution ' Company or Community Business set up with Memorandum & Articles of Association and Registered with Companies House this is a UK Governemt monitoring and Audit agency ( ie the company can make profits and may pay taxes on them ) Its Officers are unpaid Directors will not receive remuneration but may receive expenses specified in ' Articles of Association; there is then a mechanism for Elections to the ' Board' and a rotation of Board members standing down on an Annual Basis.
All members then are entitled to a Voting Share - original Cs donation could be used to buy a share and they vote Directors into Power.

At the end of its Financial Year it then Covenants all Profits ( again after Tax if necc. )to a second organisation a Registered Charity ( with the Charity Commissioners ) which carries out the Charitable functions of the Community Organisation.
This then carries out the Charitable aims of the organisation, which could be Education.
Often some of the ' Volunteer' directors sit on the Boards of both organisations but this will be circumscribed in the Legal Governance documents of both organisations,

As a final rider because all Board & Ordinary members are ' Volunteers' their time/hours spent on Charitable purposes can be valued at an Hourly rate and used as matched 50:50 funding for Grant funding from Local Council/ National Government funding/ Lotteries/ Grant Trusts or European funding.

In a simplistic scenario you could take 10,000 hours of CS Hosts time spent with visitors from Developing countries ( value it at £10 per hour )and look for European £100,000 of match funding to set up a Development Project to bring say a rural village in Tanzania or Nepal into a Computer Network ....

Anyway just to show other possibilities after this complex debate on New Hampshire and IRS scenario in USA...

Posted June 2nd, 2011 - 10:12 pm from Berlin, Germany
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Posted June 3rd, 2011 - 7:41 am by from Paris, France (Permalink)
This brings us back to the question if organizations such as CouchSurfing which put people in touch through a website and facilitate travel through the hospitality offered by members should benefit from tax breaks which means others not benefiting from CouchSurfing would pay for members to enjoy the services. Some, including the two of us, don't believe so, because this doesn't seem fair and also the organization is already offering premium services for paying customers and has plenty of ways to sustain its activities without the need to rely on taxpayer money which is much needed for other purposes.

If CouchSurfing had actual charitable activities things might be different.

Posted June 3rd, 2011 - 8:19 am from Berlin, Germany
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Posted June 7th, 2011 - 3:54 am by from Alexandria, United States (Permalink)
couchwww.surfing.org/group_read.html?gid=7621&post=7785396#post7801038

This is, quite literally our complaint (and has been for 4+ years):

CS does not use the donation money for charitable, or any, programming which benefits the donating community (with the possible exception of CS Cares, which never became established). The managers 'chose' to never use the money for charitable purposes.

Instead, they 'chose' to spend the donation income on airfare for themselves and their friends (to Burning Man and destinations around the world), expensive long-term rent in beautiful locations far from their US homes, "cohabitation bonuses" for CS staff who want to live together (and would have, anyway, regardless of being paid to do so), ski trips to Lake Tahoe and excursions to other assorted global tourist destinations (where hotel fees and meals were paid for by donation income...just for friends, however), private gym memberships in San Francisco, all meals prepared by a CS paid cook, and salaried positions for favored friends, who were frequently incompetent in their jobs but, who faced no performance review or threat of termination (yo Jim Stone...how's your French translation coming along...hmmmm?).

This can all be verified and documented...please ask for proof and I will be quite happy (if not ecstatic) to provide it....to expose these people.

do not give money to CS because it will be used for corrupt purposes.

Posted June 7th, 2011 - 4:09 am by from Alexandria, United States (Permalink)
I'm sorry everyone....i posted a broken link.

The correct link, here, describes the calculations with which Charity Navigator (a US-based charity regulation group) evaluates the charities on its radar; it's purpose is to provide unbiased guidance to donors.

CS does not do well, when being evaluated using its model, because CS has essentially no programming for charitable purposes. CS spends the majority of the donated income on travel, salary, rent and meals for those people closely associated with Casey, himself, and exists to serve the material needs of those staff members, not the general membership...see for yourself and do the calculations:

http://www.couchsurfing.org/group_read.html?gid=7621&post=7785396#post7801038

Posted June 7th, 2011 - 5:42 am by from Dongshi, Taiwan (Permalink)
But what about
http://www.couchsurfing.org/about.html/vision
http://www.couchsurfing.org/about.html/mission
http://www.couchsurfing.org/about.html/guiding
http://www.couchsurfing.org/policy_faq.html?open_source_answer=1
?☻

Posted June 7th, 2011 - 7:20 am by from Paris, France (Permalink)
"http://www.couchsurfing.org/policy_faq.html?open_source_answer=1"

Thanks for that link.

"After much debate, we have come to the conclusion that moving to an open
source model exposes CouchSurfing to several risks while also providing
few benefits. Therefore, for the time being, CouchSurfing source code
will remain proprietary."


This demonstrates beautifully the kind of benefit/risk assessment done by CS and the obsession of its founder with secrecy and his lack of objectivity.

CS doesn't have the resources to review source code, but it does to create it... The key issue is CS doesn't trust its own volunteers and would rather have a crippled website than have anyone benefit from developments they believe they shouldn't. And they don't trust their own ability to attract volunteers and to maintain a community which will have no desire to look elsewhere.

And now listen to this:

"Our moral and legal obligation is to serve our specific charitable
mission, and we feel that the choice to use proprietary code allows us
to best meet those obligations."


I guess that part needs to be revised when the NH charity label is lost at the latest.

Posted June 7th, 2011 - 11:10 am from Berlin, Germany
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Posted June 9th, 2011 - 6:31 pm by from Alexandria, United States (Permalink)
www2.guidestar.org/rxg/news/webinars/6-22-11-webinar-charting-impact.aspx?hq_e=el&hq_m=1144819&hq_l=1&hqa4f77f5000_v=

Couchsurfing managers, or anyone else interested in non-profit management, should check in with this free webinar panel discussion. Its aim is to help organizations allow others to help them: donors, volunteers, experts willing to work with the site. Imagine if they had something like this available back in 2006; there would have been so much less drama and fewer fights, ending with disillusionment and goodbyes.

...but, it's not too late! sign on, all

Posted June 9th, 2011 - 6:32 pm by from Alexandria, United States (Permalink)
http://www2.guidestar.org/rxg/news/webinars/6-22-11-webinar-charting-impact.aspx?hq_e=el&hq_m=1144819&hq_l=1&hqa4f77f5000_v=

activated link

Posted June 10th, 2011 - 1:35 am by from Dongshi, Taiwan (Permalink)
Well at least with closed source I can rail all day to my fellow elite Special Bug Operations Team members to fix things, without having them ask me to submit a patch like on Debian
I bet they use all the latest algorithms in it.
I bet it reaches ISO9002 Quality Standards.
I bet it is just like Mom used to make.

Ernest in 'Just Like Mom'