Replies to March 21 RA meeting.

[Rose Springvale]

I really am amazed at how much misinformation the RA had in this particular meeting. I don't have time today to go through the entire transcript, but wish to clarify three things.

1. Despite the representation by Gwyn that the pre-payment of tier for non profit organizations is optional, dependent only on the preference for invoicing, it is simply not true. CORPORATIONS< or entities like Gwyneth's business, Beta Technologies, may opt to be invoiced and pay in advance. Entities taking advantage of the non-profit and educational discounts have NO OPTION.
From the SL knowledge base, here: http://wiki.secondlife.com/wiki/Linden_ ... econd_Life
"Invoicing is meant to be used by a specific set of Second Life users under specific circumstances:

* Verified, approved educators and non-profit institutions, who receive a discount on the regular setup costs and monthly fees for private regions (islands).
* Companies who fulfill the following conditions:
o Require an invoice before payment can be made.
o Are willing to pay either 6 months or 1 year of maintenance in advance.
* Those who work with Purchase Order number requirements.
* All Teen Second Life private island orders.

Note: While land orders from Teen Second Life make use of the special ordering system, land orders from individuals in Teen Second Life are not invoiced and hence not subject to the 30-day grace period; individual land purchasers in Teen Second Life (i.e. not schools or non-profits) must pay setup fees upon delivery, as well as monthly maintenance thereafter.

To receive the education and non-profit discounts, you must use the invoicing option. emphasis added

2. As a CDS resident, I've always opposed development of homestead sims for multiple housing projects. No one mentioned the script limits or agent limits in homestead sims .. surprisingly as you were talking about Sacromonte, which has always been a homestead. What our executive did not share with you was my request that the RA table the discussion for one week, as the original owner of the sim has requested to be moved back there. Why she chose not to clarify but to make the issue more confused is beyond me. Our homesteads in Al Andalus have always been project oriented and used by individuals for one purpose. Delia's Albaycin was a homestead, and was upgraded at the merger because she wanted to try a new kind of residential development. That development has been completed, for months, and has not been priced or marketed yet. This is what i mean when i say there is priority for this sim!

I will continue to oppose the use of homestead sims for residential use marketed as separate parcels. I would never approve such a use in AA. That of course will not be my decision after July, if the merger stays in place.

For all your information, a homestead sim in a non profit organization, for the short term anyway, costs $66.50 usd. We have been charging 20,000 L per month for the use of the sims. This is less than the tier cost for particular parcels in CDS, so not sure what the astonishment is about. There are no land restrictions as to amount owned by single avatars in AA. CDS has covenants that apply to each sim. I and others reviewed all those covenants with an eye toward making them all available and consistent over a year ago. The RA never took up the issue.

After i bought the homestead sims in Al Andalus and placed them in the non profit, four people asked to use them for projects. I never charged anyone for the land, simply asked that they cover the tier for the sim. Those projects were Al Albaycin Nature Preserve, Al Garnata, which formerly housed only the library, Al Andalus Almunecar, which formerly housed Draxtor Despres's machinima studio, and Sacromonte, which was used by Mosque, palace, chapel and temple architect Marino Nuvolari as both his workshop and a place for spanish only speaking residents to gather. When the Copts were looking for a place to use, we asked Marino to move to Almunecar, as Draxtor had chosen to once again leave CDS. Marino accommodated the request, but Almunecar really wasn't conducive to what he wanted to do, and last week asked if it was okay to move back to Sacromonte. I sent an email to the chancellor regarding this, PRIOR TO THE MEETING OF THE RA, and there was no response. i have assured Marino that this is acceptable. Which leaves Almunecar available for the RA to deal with, if you need to play with land, however remember that the coastline along the AA side must be maintained, at least until you no longer wish to honor the spirit of the agreement.

I am and have been available to provide information on a timely basis. I do not expect to attend any Sunday morning meetings this term, as i am not a civil servant and would rather spend that time with my family.

There is more, but i need to work on real issues.

[Rose Springvale]

One other thing, Satir DeCuir is the builder who worked for Al Andalus as we designed the sims. She is a professional, and we pay for her work by the project or by the hour. Satir is my friend and business partner in other ventures, and often handles things for me as a courtesy. If CDS wishes to retain her services, they will have to negotiate terms directly with Satir. Prior to the merger, she was paid 10% of all tier collected in AA.

[Sylvia]

No offence to anyone, but I don't understand most of what is being said here. Could this perhaps be rephrased in a way that clearly states what it was that was said at the RA meeting (and by whom), that you are disagreeing with, and then what your response to that is?

Point one seems to argue that it's *not* an option for a non-profit *not* to pay in advance, but the stuff posted only indicates that you have to use the invoice option. I guess you are arguing that this is the same thing? Maybe I'm just being stupid this evening, but usually an invoice option allows one to pay *after* the service is received, not in advance. I don't get it.

Point two is ... well I just don't have any idea what it says.

[Sylvia]

Actually, nevermind. I don't understand it, but I just realised I don't care except in the academic sense. Sorry.

[Rose Springvale]

Sorry Sylvia, just need to read the transcript.
points sumarrized.
!. all educational and nonprofit sims must pay in advance to get the educational non profit discount. invoicing is the only way you can pay it.
2. The RA wants to divide up Sacromonte for residences. I oppose that.

[Gwyneth Llewelyn]

*sighs* @ Rose... the point was that non-profit organisations cannot buy islands at a discount and then generate revenue from that by leasing land. Don't take my word for it, ask any Linden Concierge (I'm sure that if I'd posted their replies here you'd say they're forged ).

If one is unable to get a discount, one doesn't need to pay 6 months in advance. It's as simple as that. Where is the 'misinformation'?

If someone is using a non-profit to run a land management business, that goes against the rules set by Linden Lab. It's as easy as that. Now, I really don't care who is "cheating" or not, in fact, I couldn't care less; but as a RA member, it's my duty to inform that I disagree with 'bending the rules' for the CDS (because, well, the consequences can be dramatic if someone blows the whistle on us).

As for your position regarding Sacromonte, I guess we'll have to respect that.

[Rose Springvale]

I'm confused. Are you suggesting that what we do in Al Andalus is bending the rules?

[Rose Springvale]

I guess the disconnect here is that you see what CDS does as land leasing experiment, and i see it as a democracy experiment. That's why i've always opposed selling land for the prices we charge, for resales ...when the cost has already been recovered. This is a huge philosophical disconnect, and one which the RA really should consider. Frankly, we do not do a good job as a land leasing operation.

Al Andalus operates completely within all Linden lab rules. It has been reviewed twice now, once when the initial project was proposed, once when we transferred the project to Virtual Democracy Inc. You can ask all the concierge people you wish and frankly, i don't care what is said in idle chat. As an RA member, it is your responsibility to NOT mislead people. Your statement led others to believe that prepayment by AA was optional. So long as the sims qualify for non profit/educational treatment, it is not. There is no fraud here and-- maybe i'm over sensitive... it comes from repeated innuendo i guess, but it sure looks like that is what you are implying. Now, please, some people should jump on here and post how i'm making things up ...again.

As for Sacromonte, no, all you have to respect is the merger agreement. If AA stays as part of the CDS, which it appears to me the current RA does not want, then you will have it all to do with as you please, including defeating the Non profit status. At that point, and provided the AA citizens agree...i'll transfer the sims to the entity or person that the RA names.

It is, as you say, as simple as that.

[Claude Desmoulins]

DISCLAIMER : I have neither studied Linden Lab policies on non-profits nor spoken to any LL personnel in quite a while.

Gwyn's criticism of Al-Andalus (Is it a land management business) seems a bit over the top. Here are three reasons.

1. Non-profit doesn't mean that one can't charge for things. Just ask your local hospital (at least if one is in the US) What matters is what you do with the excess.

2. I suspect (though I haven't read the LL rules) that in order to get the discount, the RL corporation has to be 501c3 compliant. In previous discussions of the corporate option in CDS, it has come up that the USA IRS does ask for documentation of where the money goes. If Virtual Democracy Inc. is not a bona fide non-profit, what LL would do about the discount is the least of their problems.

3. Through work with the conviviencia group and entities like Silver Pen, Al-Andalus has demonstrated the kind of engagement one would expect to see from a non profit.

[Gwyneth Llewelyn]

Hmm, I do apologise. I wanted to quote something from the Linden Lab Knowledge Base, but since they moved the articles to the Wiki, I can't find it any longer. I wonder if Linden Lab changed the rules again, or deal with the issue on a case-by-case basis. Put it simply, it was part of LL's policies that non-profits could not get a discount for the purposes of leasing land to residents (they were obviously allowed to buy islands at full price, of course). But so much changed recently (new ToS and all) that they might have dropped this restriction. I don't know, so I've requested an URL to a public site for their current policies. Until I have that link, I'm afraid I cannot continue to engage in this discussion. If I don't get any answer, or no link, it can only mean that LL makes allowances on a case-by-case basis, and sometimes forfeit their own internal rules. I don't know if this is the case, so I won't pursue this discussion until someone can post an URL with LL's policies for all to see, as well as their official interpretation of said policies.

Claude, this has nothing to do with what Linden Lab "interprets" to be the normal activity of a non-profit. As we have seen recently, they often implement policies that have little relevance to what the common interpretation of the law says; they do pretty much what they want in their virtual world under their terms of service, some of which are public, some are "internal rules" which are not always promptly revealed, and are tied to Linden Lab's interpretation of what the ToS says. This makes things pretty much confusing. In some cases, Linden Lab does blog posts to clarify those policies. In this particular case, if there was a blog post explaining their interpretation of what a non-profit can do or not in SL, I've not managed to find it (yet).

This is by far not a criticism of what the normal activity of Al-Andalus is. I couldn't find a better example of a cultural non-profit in SL. I wasn't saying that Al-Andalus is a land management business! I was just pointing out that Linden Lab does not allow non-profits to run land management businesses (even though absolutely nothing in Californian law forbids that, rather the contrary!).

Putting it bluntly, if LL creates an arbitrary rule on their ToS saying: "redheads cannot own land in SL" that rule, even if discriminatory, is in effect until someone sues LL for discrimination LL puts those kinds of rules on their ToS all the time. We just agree with the ToS and log in without caring much about those...

As for Sacromonte, the merger agreement states very clearly that during the transitional phase, the CDS manages land as a whole entity (there is no distinction between "old CDS" and "AA"):

1. The six Al Andalus sims and four CDS sims will merge as one territory on acceptance of this offer by AA's managers; all land owning residents of AA will become CDS citizens, and land, rentals and administration of AA assets will be the responsibility of the established structures in the CDS government.

(emphasis mine)

So this pretty much establishes that land development (or re-development) on all the sims are to be managed by RA and Executive (with planning by the New Guild), even during the transition phase.

But the agreement also says:

3 [...] Public land and buildings in AA shall become the property of CDS. All AA community builds will be subject to CDS law regarding community assets and theme build protection for AA's recreation of 13th century Arabic Granada, Spain.

Rose, I guess that's what you mean about Sacromonte: it's a public structure, so it has to remain protected in terms of building. The suggestion to apply to Sacromonte a model similar to the Monastery — a commonly held structure that is paid for by contributions from land owners in that sim — falls somewhat in-between, in a grey area. One could also argue that repurposing public buildings, rebuilding them, while still keeping to theme (and having them remain public), could be allowed. But it's also easy to argue to the contrary.

To deal with those "exceptions" on cases that are not clear-cut, we have recently voted at the RA that you, Rose, would have a saying in all those changes, specially when things are not clear. I think it's a reasonable compromise: since you know better than anyone what the spirit of the agreement was (I can imagine that it meant "protecting all current buildings at all costs" — even financial loss! — and I would have to agree that this was the intention), it makes sense that you have a final saying on those matters. That's pretty much what the passed law established: until the transition phase is over, you have to be consulted (I wouldn't use the word "veto", but it pretty much amounts to that) in every case that changes are to be perpetuated on the AA sims, and Satir DeCuir (or Delia Lake for Albacyn) to be consulted for aesthetical considerations.

[Sudane Erato]

I should contribute to this discussion, since I have recently gone through discussions with an LL representative regarding the conversion of SL New England to non-profit status. As a part of those discussions, the LL representative made the following points, which, in lieu of any clarifications in the LL blogs or wiki or other documentation, I assume to be as clear a statement as we will get.

The following are excerpts from the conversation which express the LL policy with regard to *any* application for non-profit status.

... Also, all business conducted on the islands (if approved for a discount) must be that of the nonprofit. We do not allow a renter/landlord situation unless the residents are vendors for the nonprofit, etc. We will make periodic checks for nonprofit business concerns on the island so if you are making money from rentals, then perhaps you would like to keep these at full price.

... We do not dispute your status as a nonprofit and the work done with regards to the nonprofit entity. We encourage those associated with your nonprofit institution in a way to propagate the education/awareness of your goals, and recognize that you may require rental of your islands and homesteads by this community. Resale of goods, content, (vendors for your nonprofit, in essence) (my emphasis) is always welcomed. This is what we mean by the business of the nonprofit.

However, advertising to a resident not connected to your nonprofit institution as a landlord who has land at a discounted pricing is not allowed. If you have certain islands where this happens (understandable that you would like to make extra money from the resident population), these islands/homesteads should simply remain at full price tier.

... So my suggestion was, if you would like to keep an island for straight up rentals to those who were not involved with your nonprofit, those could remain at full price billing. The nonprofit islands would retain the works and business associated with that nonprofit. For example RelayForLife does fundraising on their islands,

...we do stipulate that the business conducted on this island is that of the nonprofit.

--- YOu and I spoke at length about what is not allowed, such as renting to residents who do not do the business of your nonprofit i.e. landlord/tenant type relationships. Specifically for residents not involved with your non profit and who are seeking a place to rent because your institution has a discount.

--- Should you decide to pursue the EDUNP discount for this island, Linden Lab does take seriously complaints we may get that the business conducted on the island is not that of the nonprofit.

I feel it's fairly clear that LL defines qualifying sims as those on which all the people and all the business, sales, vendors, events, is the business of the n0n-profit. If we can fairly say that everyone in the community is a member of VDI, and everyone's transactions and businesses are the business of VDI, then it will *probably* be safe to claim non-profit status with LL. If, on the other hand, there might be some question regarding my sales of bar furniture in my shop on the Platz and whether that is explicitly the "business of VDI", or even, in fact, whether I am a member of VDI, then I think we should be very cautious in moving ahead with non profit status.

In the case of New England, I withdrew the application. Despite their attitude of encourgaement that I should apply for such status (they *actually* re-opened the ticket after I had closed it in my initial determination that we did not qualify!), it was clear that they could at any time decide to investigate our activities, make a contrary determination, and revoke the status, an act for which I would have no recourse.

I've previously advised Jamie and Rose of this procedure, so this is not new info. I offer some of the quotes here merely to help inform our discussion.

Sudane.....................

[Sudane Erato]

Frankly, we do not do a good job as a land leasing operation.

I must take a small exception to this. During the history of the CDS, and looking at the 5 sims of which I have served as Estate Owner, we have managed to keep tiers in a low to normal range for SL overall. Despite this fact, the CDS has been in the black (collected more money than its spent) for almost every month of its history, and has accumulated a reserve of perhaps US$7000 in doing so.

While some might argue that we should be spending more on program and not accumulating such a large reserve, the fact remains that our track record of tier pricing, collecton and payment to LL (activities which might cumulatively be called "land leasing") has been very successful.

Sudane.........................

[Rose Springvale]

Yes, we did discuss this Sudane, and we tried to explain how you could structure the SLNE operation so that it would qualify. It all depends on what the purpose of the non profit is and how that is applied to the facts. In that respect, of course situations are approved on a case by case basis.

A question I have is why now? The discussion about Al Andalus began nearly two years ago. The operations of Al Andalus has not changed. The merger agreement approved by the RA provides that CDS will form a non profit as part of its agreement. The issue, to the best of my knowledge, was not raised in any of the discussions, though many were quick to accuse us of being "undemocratic" in the selection of representatives for AA in the CDS government. You are smart people, nothing was hidden, so please, what is this about? Did you honestly approve an agreement you intended to breach from the beginning?

All VDI documents were submitted to LL for review prior to the merger, including all corporate documents and the application for exemption with the IRS. As the project was already built, and operating, it was also available for review. Finally, Al Andalus uses more than 70% of its land for public use, and the tier charged landowners there is roughly 11L per prim, more than what is charged in the balance of CDS.

For purposes of this discussion, it may be appropriate to review the purpose clause of VDI. While most of the documentation is prescribed language to attain qualification with the IRS, this is the specific clause:

Section 4.01. The Corporation is organized exclusively for cultural and educational purposes as defined in Section 501(c) (3) of the Internal Revenue Code. These activities will include, but not be limited to, creating democratic communities in virtual worlds, exploring historical democratic societies and teaching democratic structures through information and educational presentations and discussions, and applying democratic principles to governance of virtual communities. The corporation may engage in all such activities that further these purposes.

[Claude Desmoulins]

Thanks to Rose and Sudane for the additional information. It sounds like any land rental one does has to be related tightly to the purpose of the non profit. I imagine that LL designed this for existing non profits moving into SL rather than SL communities creating non-profits.

The VDI purpose clause seems to me like it could have been a pre-merger CDS document. Although CDS tossed the idea of a mission/vision statement around without much coming of it, the VDI statement seems to reflect well what I think CDS is about, for whatever that's worth.

It would also seem to me that since paying land fees is the way one (at least at the moment) becomes part of the democratic experiment that is CDS, a good case could be made that the renting of land is directly connected with what the CDS does (should CDS create a RL non-profit), although Sudane's point about the risk (what if LL revokes your non-profit status? You have no appeal) is well taken.

[Gwyneth Llewelyn]

Rose & Sudane, thanks to you both... it seems to me that this policy is definitely not being implemented consistently by Linden Lab in all cases. The question of "why now", Rose, is just because up to the merger we all assumed that Linden Lab apparently would not care what use was given to discounted land owned by non-profits. Then all of the sudden this changed, and possibly the change happened recently — possibly after VDI was created. It's unknown if they apply these policies consistently or on a case-by-case base, depending on how a particular non-profit is set up.

It also seems that if all CDS citizens become members of VDI, the discount will still apply, or so it seems from what Sudane writes. This also implies a dramatic change to what it means to be a "citizen of the CDS". We would become "citizens of the VDI" and subject to the VDI's internal rulings, and subject to its Board, just to enjoy the discount. This was not clear at all during the merger discussions. Also remember, Rose, that the merger discussions deliberately avoided discussing these small details, in the name of expedience. I wasn't aware of the name of the non-profit who owns the AA sims until a month ago, when you posted it publicly! While LL might have all data and information pertaining to VDI, as you say, the citizens of the CDS don't. I fail to understand your surprise that we discuss it "now"...

It's now obvious that if we wish to go that route we need to ask Linden Lab for clarification. Or, well, remain silent about it and enjoy the discount while we can. I'm not happy with either suggestion, to be honest.