[Foundation-l] Optional advertisement on wikipedia

Mon Apr 24 13:31:01 UTC 2006

Delirium wrote:

>Michael R. Irwin wrote:
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>
>>Delirium wrote:
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>>>The general rule is that a non-profit organization should have at least 
>>>one-third of its annual income come from a combination of: governmental 
>>>donations, donations from other public charities, and small (less than 
>>>2% of total income each) donations from the general public and private 
>>>charities (large donations can still have the first 2% counted).  If 
>>>that all adds up to less than 1/3, things get considerably more complicated.
>>>
>>>Whether advertising income would cause a problem depends on how much we 
>>>expect to get, and how much in large donations from private individuals 
>>>and charities we typically get.
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>>>
>>Interesting information.   Do you have any further detail.   Is the 
>>above a good general guideline because it is mandated by law;  accepted 
>>as good practice by accountants, IRS, rating organization, possible 
>>donors or other?
>>
>>Any background you care to provide regarding where you gained this 
>>knowledge would also be appreciated but I can follow up elsewhere if you 
>>do not care to provide that private information on a public mailing list.
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>
>The official guidelines on the subject are in IRS publication 557, 
>"Tax-Exempt Status for Your Organization".  The relevant chapter for the 
>Wikimedia Foundation is chapter 3 on 501(c)(3) organizations (online: 
>http://www.irs.gov/publications/p557/ch03.html).
>
>I was a bit imprecise; these aren't requirements for all non-profit 
>organizations, but specifically for 501(c)(3) organizations, the type 
>that are required to be public charities.  That gives added benefits 
>over private charities (like the Gates foundation), such as allowing 
>people who donate money to deduct those donations from their taxes.  It 
>also includes added requirements; for example, they must serve a public 
>purpose (rather than a community or niche purpose), must spend their 
>money on activities that advance that public purpose (not social 
>activities), and must receive a substantial amount of their monetary 
>support from the general public, either directly or through government 
>entities or other public charities.  One-third support seems to be the 
>official line above which the organization is safe; if the public 
>support is less than that but above 10%, it's still possible to maintain 
>the status, but things get trickier.
>
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Excellent expansion and clarification Mark!  Thank you very much.   I 
think that gives me as much knowledge as I wish to have on this subject 
for the moment.   I do appreciate the links to further specific 
information and will file this note for future reference if I ever get 
involved in assisting with the launch or maintenance of a non profit.   
Thanks again!

Sincerely,
Michael R. Irwin