On 4/23/06, Michael R. Irwin <michael_irwin(a)verizon.net> wrote:
Delirium wrote:
Gregory Maxwell wrote:
I'd guess the open questions would be:
1) How would this impact the charitable non-profit status of WMF?
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.
-Mark
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?
Presumably he is referring to the "public support test", section 509
of the Internal Revenue Code. Failure to meet the test would have the
organization deemed a private foundation which would have significant
negative tax effects. In extremely excessive cases the organization
could completely lose its non-profit status.
Anthony