[itdiscuss] [ShelbyIT] Microsoft Open License for Charity

[Ryan L. Faircloth]

Some years ago I believe version 3 of the open license for charity specifically excluded religious organizations of any kind. It simply never donned on me that there exists churches that don't have exempt status. I have to wonder what this does for giving as tithes are not even tax deductible. As I have always attended a "main line" denominational church its simply never come up in my experience, Bobby you have done a service to the community by pointing out this issue to be considered.

Computek is the first vendor I have encountered that specifically markets Open Charity and the assistance in setting up the open value license for churches. I would defiantly encourage as you have complete honesty in setting up your organization with the program. Do not bend the rules or stretch the truth its not a Christ like example.  Microsoft is already being very generous in extended the lowest price paid by the largest organization "100,000 or more licenses" to the religious communities. To be honest I want to upgrade all of the Microsoft office licenses in my church but its not in the budget due to giving drops from the economic conditions. So we are upgrading 3 with software assurance licenses. This still saves us 1500 over the retail price.

Also to be clear Microsoft accepts "group status" for churches you will need a copy of the group letter from the irs and a letter stating your church is currently a member of the group in good standing.



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From: ShelbyUSERS at yahoogroups.com [mailto:ShelbyUSERS at yahoogroups.com] On Behalf Of Bobby Stewart
Sent: Saturday, January 31, 2009 12:42 AM
To: ShelbyIT at yahoogroups.com; IT Discussion Forum; ShelbyUSERS at yahoogroups.com
Subject: [ShelbyUSERS] RE: [ShelbyIT] Microsoft Open License for Charity


Point of Clarification:

I have long understood that to qualify as a legitimate charity for the
purposes of Microsoft's Charity Licensing program an organization must
either 1) hold the status under IRS Section 501(c)(3) or 2) be a member
of a parent organization holding that status. That would be true in the
case of many denominations where the denominational membership confers
that status to its members. Many years ago Brentwood Baptist Church
attained the privileges of 501(c)(3) status in the latter method and has
documentation from the IRS of such due to their membership in the
Tennessee Baptist Convention. When I began work here and became aware of
Microsoft's Charity Licensing program I had to provide that document to
one of the vendors capable of selling Microsoft Charity Licensing
product as part of an approval process to participate in the program.

The post below has resulted in my beginning the research process again.
While I work at Brentwood Baptist, I attend a smaller non-denominational
church that has been reluctant to pursue 501(c)(3) status for various
reasons, not the least of which is the paperwork required by the IRS. I
have been told by several vendors looking to claim their business that
they could enroll us in the program without the documentation that was
required of Brentwood Baptist those years ago. My search has lead me to
this.

In a document
<http://www.microsoftvolumelicensing.com/userights/Downloader.aspx?Docum
entId=1679> available at Microsoft's web site describing the
requirements for qualifying for Microsoft's Charity Licensing program I
find in the section describing category 1 (Qualifying 501(c)(3) Public
Charities) that, "To qualify under category [1], organizations... must
meet all of the following criteria: a) Hold 501(c)(3) designation... and
submit a 501(c)(3) determination letter from the IRS..., b) Hold Public
Charity status and c) Not be listed as Non-Qualifying... in Category
[4]." I'll leave you to go the link above to get the full verbiage so
that you can get the full story.

In the IRS publication Instructions for Form 1023
<http://www.irs.gov/pub/irs-pdf/i1023.pdf> on page one you will find
the statement, "[Churches] may be considered tax exempt under 501(c)(3)
even if they do not file form 1023." Later we find, "[Churches] may
choose to file Form 1023 in order to receive a determination letter that
recognizes their section 501(c)(3) status..." Churches that file for
501(c)(3) status must complete Parts I through XI of Form 1023 and
Schedule A. It is stated that Form 1023 is not used for organizations
(churches) that wish to claim 501(c)(3) status under a central
organization (local or regional denomination). That is described in IRS
Publication 557 in the section Group Exemption Letter
<http://www.irs.gov/publications/p557/ch01.html#d0e886> where it
states: "If your organization is... a church... you should check with
the central organization to see if it has been issued a group exemption
letter that covers your organization." Presumably you only need acquire
a copy of that letter to provide as proof of qualifying status.

This leaves us with the rather unsatisfying reality that to qualify for
criterion "a" we must hold a copy of a central organization's group
exemption letter or we must qualify independently by submitting the 1
pages of Form 1023 along with Schedule A and pay a fee of $750 (for
organizations with gross receipts averaging more than $10,000 annually).

Criterion "b" is easily met as the previously referenced Instructions
state, "[Churches] are classified as public charities" and criterion "c"
as well because I can see no reason why a church would meet any of the
criteria of "Category [4]" organizations (but I'll leave it to you to
read to be certain).

All this serves to say that, as much as I would like them to, unless my
independent, non-denominational church decides that it is in their
interest to submit to the IRS regulations required to attain 501(c)(3)
status we will continue to be required to purchase Microsoft software at
retail prices. To participate in the Microsoft Charity Licensing program
without the status required by them of us (we churches) and to use the
services of a vendor that would permit us to do so would be, at least,
dishonest but, worse, an outright lie. Such does not become a follower
of Jesus.

Beyond perpetrating a lie we are also engaging in a practice that could
have serious ramifications for our congregations. If our staffs are
using software that is inappropriately licensed we are, in essence,
pirating software. This practice carries potentially exorbitant fines
that could break the financial back of many congregations. As stated at
the Business Software Alliance <http://www.bsa.org/> web site, "If you
make more copies of the software than the license permits, you are
pirating." Since software purchased under the Microsoft Charity
Licensing program presumes that the qualifications have been met, any
organization that has not met them but proceeds to acquire software
under the program is guilty. The document Software Piracy and the Law
<http://www.bsa.org/~/media/10A2E6D161594C499AC16F68C7E57A65.ashx>
should be MANDATORY reading for the person responsible for purchasing
software at a church.

Thankfully, the resource mentioned in the post that started all this has
this statement on their order form: "On first order, YOU MUST INCLUDE A
COPY OF YOUR ORGANIZATIONS 501c3 letter from the IRS, authorizing your
organization non profit status." (emphasis theirs)

What are your thoughts? Are you or an organization you know
participating in this program without meeting the qualifications? What
will you/they do now that you know?

God bless,

Bobby Stewart

Network Analyst

Brentwood Baptist Church

Brentwood, TN

(615) 324-6149 office

(615) 830-0012 cell

From: ShelbyIT at yahoogroups.com<mailto:ShelbyIT%40yahoogroups.com> [mailto:ShelbyIT at yahoogroups.com<mailto:ShelbyIT%40yahoogroups.com>] On
Behalf Of Ryan L. Faircloth
Sent: Friday, January 30, 2009 9:30 PM
To: ShelbyIT at yahoogroups.com<mailto:ShelbyIT%40yahoogroups.com>
Subject: [ShelbyIT] Microsoft Open License for Charity

A few weeks ago I made a mention of charity Licenses which many churches
qualify for but don't know about or know how to order. There are very
few Authorized charity vendors in the us and unfortunately many of the
site you can find via Google are not legit. I have checked out the
following company and found them to be valid helpful. As an example of
the savings you have available Microsoft Office Pro Plus with Software
Assurance Retail is 721 using the Charity license option you can
purchase this for $121

http://www.thepastorsplace.com/Charity_License.php

[Non-text portions of this message have been removed]
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