Intellectual Property and Open Source

Chapter 14. Incorporating As a Non-Profit

You have a successful project. Everybody from the U.S. Government to Google is using your code and loving it. Companies want to donate time and resources to your project. So what are you going to do now?

You’re going to Disneyland! You’re going to incorporate as a non-profit entity.

I realize that incorporating as a non-profit entity is not nearly as exciting as going to Disneyland. But if you are in this situation, incorporating as a non-profit entity may be one of the best things that you can do for your project.

Why Incorporate Your Project?

Incorporating your project is a fairly substantial step, one that imposes substantial additional burdens on the developers involved. Nevertheless, most projects that get to a certain size or achieve a certain amount of distribution choose to incorporate. Why? In a word, scalability.

Imagine a new web application. It contains a stack of individual components, such as the typical LAMP (Linux/Apache/MySQL/PHP) setup, that communicate only vertically. Although Linux, Apache, and MySQL all tolerate a certain amount of concurrency, all requests ultimately trickle down to the database layer, which handles the requests coming in from the processes.

This setup works great—up to a certain point. When faced with overwhelming traffic, the database becomes a bottleneck. It can’t keep up with the flood of requests, and the web application falls over.

That is why companies handling billions of hits each day don’t have ...