The IRS considers advertising to be "unrelated business income", with tax imposed on ad revenue. For non-profits, there is also a limit on how much UBI can be out of total annual, receipts/income (I think 15-20%).
As for National Geographic, they have for-profit subsidaries for their television/video/web production and other areas. For their magazine, they make $100 million from advertising (UBI), but $171 million from subscriptions/memberships and other related income sources. I think they have been scrutinized by the IRS for their UBI, but have managed to retain their status.
Exceptions to what non-profits can sell include donated items (e.g. thrift shops, used books, ...) and items related to our mission (e.g. mugs and shirts with Wikimedia logo, but other mugs and shirts would be UBI).
As for Girl Scout cookies, they are sold entirely by volunteers, which is one factor in their favor. Also, the sales take place only once a year, which is a limit for selling items like this. Another restriction is that cookies cannot be sold online. Importantly, the kids also benefit from building character, teamwork, and the learning experience for the kids. These benefits can be argued as an important part of their mission. With a combination of these factors, I'm sure that's how they can maintain their non-profit status.
Recognizing sponsors is okay, such as the Virgin logo. But, again I think there are limits. This would be an area to explore, such as with future fundraisers.
Finally, there are limits to how much revenue we really do need for our mission. We are getting by okay on donations, but I would be okay with a logo in the fundraising banner. That's about it, for what I would want. Otherwise, no ads for me.
-Aude
On 3/10/08, wjhonson@aol.com wjhonson@aol.com wrote:
-----Original Message----- From: Aude audevivere@gmail.com To: English Wikipedia wikien-l@lists.wikimedia.org Sent: Mon, 10 Mar 2008 12:08 pm Subject: Re: [WikiEN-l] LA Times article / Advertising in Wikipedia
Also, the foundation's tax status would be impacted.
I don't think this is accurate. The Girl Scouts are a non-profit and yet they *sell* cookies. Non-profits can sell goods, including ads. Will Johnson
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