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Python Foundation Nonprofit Fixes Bylaw Loophole That Left 'Virtually Unlimited' Financial Liability

The Python Software Foundation's board "was alerted to a defect in our bylaws that exposes the Foundation to an unbounded financial liability," according to a blog post Friday:

Specifically, Bylaws Article XIII as originally written compels the Python Software Foundation to extend indemnity coverage to individual Members (including our thousands of "Basic Members") in certain cases, and to advance legal defense expenses to individual Members with surprisingly few restrictions. Further, the Bylaws compel the Foundation to take out insurance to cover these requirements, however, insurance of this nature is not actually available to 501(c)(3) nonprofit corporations such as the Python Software Foundation to purchase, and thus it is impossible in practice to comply with this requirement.


In the unlikely but not impossible event of the Foundation being called upon to advance such expenses, the potential financial burden would be virtually unlimited, and there would be no recourse to insurance. As this is an existential threat to the Foundation, the Board has agreed that it must immediately reduce the Foundation's exposure, and has opted to exercise its ability to amend the Bylaws by a majority vote of the Board directors, rather than by putting it to a vote of the membership, as allowed by Bylaws Article XI.


Acting on legal advice, the full Board has voted unanimously to amend its Bylaws to no longer extend an offer to indemnify, advance legal expenses, or insure Members when they are not serving at the request of the Foundation. The amended Bylaws still allow for indemnification of a much smaller set of individuals acting on behalf of the PSF such as Board Members and officers, which is in line with standard nonprofit governance practices and for which we already hold appropriate insurance.

Another blog post notes "the recent slew of conversations, initially kicked off in response to a bylaws change proposal, has been pretty alienating for many members of our community."

- After the conversation on PSF-Vote had gotten pretty ugly, forty-five people out of ~1000 unsubscribed. (That list has since been put on announce-only)
- We received a lot of Code of Conduct reports or moderation requests about the PSF-vote mailing list and the discuss.python.org message board conversations. (Several reports have already been acted on or closed and the rest will be soon).
- PSF staff received private feedback that the blanket statements about "neurodiverse people", the bizarre motives ascribed to the people in charge of the PSF and various volunteers and the sideways comments about the kinds of people making reports were also very off-putting.
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