Trade Associations Are Never Neutral

Post Syndicated from Bradley M. Kuhn original http://ebb.org/bkuhn/blog/2015/02/10/node-foundation.html

It’s amazing what we let for-profit companies and their trade associations get away with.
Today, Joyent
announced the Node.js Foundation
, in conjunction with various
for-profit corporate partners and Linux Foundation (which is a 501(c)(6)
trade association under the full control of for-profit companies).

Joyent and their corporate partners claim that the Node.js Foundation will
be neutral and provide open governance. Yet, they don’t
even say what corporate form the new organization will take, nor present
its by-laws. There’s no way that anyone can know if the organization will
be neutral and provide open governance without at least that information.

Meanwhile, I’ve spent years pointing out that what corporate form you
chose matters. In the USA, if you pick a 501(c)(6) trade association (like
Linux Foundation), the result is not a neutral non-profit
home. Rather, a trade association simply promotes the interest of the
for-profit businesses that control it. Such organizations don’t have
the community interests at heart, but rather the interests of the
for-profit corporate masters who control the Board of Directors. Sadly,
most people tend to think that if you put the word “Foundation”
in the name0, you magically get a neutral home
and open governance.

Fortunately for these trade associations, they hide behind the
far-too-general term non-profit, and act as if all non-profits are equal. Why
do trade association representatives and companies ignore the differences
between charities and trade associations? Because they don’t want you to
know the real story.

Ultimately, charities serve the public good. They can do nothing else,
lest they run afoul of IRS rules. Trade associations serve the business
interests of the companies that join them. They can do nothing else, lest
they run afoul of IRS rules. I would certainly argue the Linux
Foundation has done an excellent job serving the interests of the
businesses that control it. They can be commended for meeting their
mission, but that mission is not one to serve the individual users and
developers of Linux and other Free Software. What will the mission of the
Node.js Foundation be? We really don’t know, but given who’s starting it,
I’m sure it will be to promote the businesses around Node.js, not its
users and developers.


0Richard Fontana recently
pointed out to me that it is extremely rare for trade associations
to call themselves foundations outside of the Open Source and Free
Software community. He found very few examples of it in the wider
world. He speculated that this may be an attempt to capitalize on
the credibility of the Free Software Foundation, which is older
than all other non-profits in this community by at least two
decades. Of course, FSF is a 501(c)(3) charity, and since there
is no IRS rule about calling a 501(c)(6) trade association by the
name “Foundation”, this is a further opportunity to
spread confusion about who these organization serve: business
interests or the general public.