[foundation-board] Fwd: Draft Grant Agreement

[Becky Hogge]

On 11 July 2011 07:58, Jordan S Hatcher <jordan at opencontentlawyer.com> wrote:
>
> Please respond with your thoughts.

Firstly, I think we have a *great* lawyer. Thanks, Jordan - this looks
like detailed and important work!

My impression in general is that you are being bullish about this
contract, and based on how it is drafted, I would support that. My
assessment from contact with Omidyar is that they will be impressed by
an organisation that takes its legal obligations seriously.

You've very helpfully listed out all the obligations that this
contract will impose on OKF working practice moving forward, and I
think this is something Jason should study carefully. I would like to
have his input on whether these requirements are workable. In
particular, Jason, if you haven't already you should look at the
reporting requirements set out in section 6. They look heavy. However,
in terms of the extra work it will take to service this grant (mainly
reporting, from the looks of things) I think we should be prepared to
take that on based on what the grant of $750,000 will be able to
deliver us as an organisation.

Speaking of which, Jordan, I agree with your comment S.10 that we
should push for 60 days not 30 days.

On section 6.d.vii. (we produce "an annual operating plan and
budget... for the following year. ") - this would indeed be new to us,
but I think it would be valuable to make it standard practice.

On section 8.d (Prohibited Uses) includes "Re-Grants. To make any
grants or contributions to individuals or organizations" - would this
effect our ability to distribute funds to chapters and working groups?

I second your concern that section 10 ("Grantee shall not spend any
Grant funds for activities in, or travel to or from, the  United
States") would appear to preclude us using this money to set up a US
chapter. But we may have to swallow that if it is based on their tax
exempt status under US law - we should clarify, as I see you are
seeking to do.

There are a number of obligations that I don't feel I have the
background knowledge to judge, particularly Section 2a in Exhibit D,
which precludes us from working with any individual or entity subject
to economic or trade sanctions in the US. For the same reason, I am
unable to comment on your observations on Exhibit C, and I suggest
Jason and Rufus take a look and report back to the Board.

Your comment S.32, Jordan, I agree that we should consider seeking
powers in this contract to terminate the agreement. I also fully
support your addition of "reasonable " in section 9.b. Sheesh.

I also agree that section 15 ("Publicity") is worryingly asymmetric in
terms of rights, but this doesn't seem as fraught with risk - or am I
missing something?

Rufus raised the proposal for a "grant observer" contained in this contract
>>
>> 1. They ask for right to designate Grantor Observer on board (but not
>> a board member). I think we are good with this.

>From my memory of our discussion in Berlin, I too think that we
resolved something similar to this. I'm certainly in favour. But I'd
be interested in hearing others' views, particularly Paula.

> Please see my notes on the side letter.
>> 2. They require us to have our annual financials audited going forward
>> (which resolves the discussion at the board meeting) - assuming we
>> accept the grant.
> I was a bit unclear on this -- does this mean that we pay for a further set of accountants to audit the set of accounts the first set produced?  It's not clear to me that we can use Omidyar funds for this audit expense, so just need to make sure it's in the budget.

We can ask them for further clarity - they might be expecting
something that is standard in the US, but different here. At ORG we
commissioned and Independent Examiner's report (see page 28 of
http://www.openrightsgroup.org/wp-content/uploads/081119_annual-report.pdf)
which was produced for us by our accountant.

Cheers

Becky