IRS denies Form 1023; Foundation cannot assemble board; methodology stewards refuse IP license

Scenario

One or more of the Methodology Foundation formation plan's three named risks materializes: the IRS denies the 501(c)(3) application; the board candidate pool cannot produce five to seven members willing to accept fiduciary duty; or Alex or the co-architect as methodology stewards declines to execute the IP license to the Foundation.

Cost / impact

IRS denial requires restructuring as a private foundation or unincorporated trust, leaving buffer pool governance and IP custody at Landseed PBC indefinitely. Board assembly failure means the Foundation cannot operationalize and audit committee cannot be constituted. Steward IP refusal leaves methodology IP as corporate property — if Landseed PBC fails, methodology stewardship freezes and the 99-year continuity claim is hollow.

Prevention

Formation counsel structures Form 1023 carefully with Vermont public-charity filing first and Delaware as alternative. Board search begins Month 2 with a board-search firm engaged if direct search stalls at Month 3; target 20+ candidates for 7 seats. Pre-formation discussion explicitly confirms stewards' commitment; IP license term and scope agreed in principle before incorporation.

Mitigation

Counsel response to IRS requests and restructure per counsel advice for application denial. Expand board candidate pool to adjacent conservation-methodology communities. If stewards refuse, accept methodology-stays-corporate as the worse outcome and redouble focus on corporate-entity survivability.

Residual risk

Real and non-trivial. Formation failure is the single mechanism that leaves the architecture's 99-year continuity claim unfulfilled. Manageable with deliberate execution but cannot be engineered away because IRS determinations and board assembly depend on factors outside Landseed's control.