On 10/24/07, Phoenix wiki <phoenix.wiki(a)gmail.com> wrote:
Forgot to ad that the wikimedia corporation would have
to donate most of its
profits to the foundation
That doesn't work either.
Wikimedia Foundation could not run widespread ads and maitain
charatable non-profit status because of the public support test.
Adding a layer of money laundering would not resolve this issue. ;)
The short explination of the public support test:
The public support test requires that we derrive at least 1/3 of our
income from "the public". This isn't *so* bad, until you find out how
"the public" is defined. The public support is defined as the portion
of donations from persons or groups which do not exceed 2% of the
total income.
For example:
An ORG's income is $1,000,000.
$100,000 comes from regular business income (ads or t-shirts for example).
$150,000 comes from one large donor.
Eleven donors donate $60k.
then there are ~5000 ~$20 donors making up the rest.
2% of $1m is 20k, so the portion income from any donor over 20k is not
counted as public support.
In this case the amount of non-public support (donation income over
20k + business income) is 670k.
Because 670k is over 2/3rds of the income, this hypothetical org fails
the public support test.