Hi,
I'm new to this list, so please forgive me if I mess up. There's been some talk about advertisement on wikipedia or not. Why not make it optional, so that each user decides if he/she wants to see the advertisement? That way, users can "support" wikipedia or not. I don't think that'd be a sell out.
On 4/22/06, Tony Bruguier tony.bruguier@gmail.com wrote:
Hi, I'm new to this list, so please forgive me if I mess up. There's been some talk about advertisement on wikipedia or not. Why not make it optional, so that each user decides if he/she wants to see the advertisement? That way, users can "support" wikipedia or not. I don't think that'd be a sell out.
I think this is a fantastic idea, (although I'm sure it's been heard before), especially if we defaulted it to off and made it a user preference.
But there are a lot of other issues with advertising beyond the community issues, such as the impact on the foundations charitable non-profit status.
In any case, such a move might be a way to start further exploring advertising without upsetting the community or bringing in enough money to cause huge tax complications. It would also give editors who don't donate money because they feel they already donate time a way of helping out with the server bottom line. I suspect would avoid much of the risk of donations going down because people believe we are ad supported, although I don't have enough data to determine how many of our donors are editors/have accounts. It would be nice to collect that data in the future.
I'd guess the open questions would be:
1) How would this impact the charitable non-profit status of WMF? 2) Will the advertising programs be okay with only showing the ads to some small fraction of our users?
Software wise this would be fairly straightforward to implement, and could even be done to a limited extent by the users without developer involvement (by inserting the advertising code in the users monobook.js).
Gregory Maxwell wrote:
I'd guess the open questions would be:
- 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
On 4/23/06, Delirium delirium@hackish.org wrote:
Gregory Maxwell wrote:
I'd guess the open questions would be:
- 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.
Hmm. Well, iff we actually had a good handle on our donation income stream we could control the advertising to avoid crossing that line (just disable it even for users that have it on if it's bringing in too much).. but I don't get the impression that we have enough visability into our future donations. :)
Delirium wrote:
Gregory Maxwell wrote:
I'd guess the open questions would be:
- 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?
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.
Thanks for the information.
Sincerely, lazyquasar
On 4/23/06, Michael R. Irwin michael_irwin@verizon.net wrote:
Delirium wrote:
Gregory Maxwell wrote:
I'd guess the open questions would be:
- 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
Anthony DiPierro wrote:
On 4/23/06, Michael R. Irwin michael_irwin@verizon.net wrote:
Delirium wrote:
Gregory Maxwell wrote:
I'd guess the open questions would be:
- 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 _______________________________________________ foundation-l mailing list foundation-l@wikimedia.org http://mail.wikipedia.org/mailman/listinfo/foundation-l
Hmm ... from www.irs.gov search on "public support test section 509"
http://www.irs.gov/charities/article/0,,id=137609,00.html
Section 509(a)(3) Supporting OrganizationsSupporting organizations are public charities that carry out their exempt purposes by supporting one or more other exempt organizations, usually other public charities. The category can cover many types of entities including university endowment funds and organizations that provide essential services for hospital systems. The classification is important because it is one means by which a charity can avoid classification as a private foundation, a status that is subject to a much more restrictive regulatory regime. The key feature of a supporting organization is a strong relationship with an organization it supports. The strong relationship enables the supported organization to oversee the operations of the supporting organization. Therefore, the supporting organization is classified as a public charity, even though it may be funded by a small number of persons in a manner that is similar to a private foundation.
Like all charitable organizations, a supporting organization must be organized and operated exclusively for purposes described in section 501(c)(3). A supporting organization must also be organized and operated exclusively to support specified supported organizations. Moreover, a supporting organization must have one of three relationships with the supported organizations, all of which are intended to ensure that the supporting organization is responsive to the needs or demands of the supported organization and intimately involved in its operations and that the public charity is motivated to be attentive to the operations of the supporting organization. Type I supporting organizations are "operated, supervised, or controlled by" the supported organization. Type II supporting organizations are "supervised or controlled in connection with" the supported organization. Type III supporting organizations are "operated in connection with" the supported organization. Since Type III relationships are less formal than a Type I or Type II relationship, Type III organizations must meet a responsiveness test and an integral part test. Section 1.509(a)-4(i)(2) and (3) of the Income Tax Regulations. These tests are designed to ensure that the supporting organization is responsive to needs of a public charity and that the public charity oversees the operations of the supporting organization. Finally, the supporting organization must not be controlled directly or indirectly by disqualified persons (defined in section 4946), who generally are substantial contributors and their family members. Section 509(a)(3)(C).
Some promoters have encouraged individuals to establish and operate supporting organizations described in section 509(a)(3) for their own benefit. There are a variety of methods of abuse, but a common theme is a "charitable" donation of an amount to the supporting organization, and a return of the donated amounts to the donor, often in the form of a loan. To disguise the abuse, the transaction may be routed through one or more intermediary organizations controlled by the promoter.
Organizations that operate for the personal benefit of their founders are not operated exclusively for purposes described in section 501(c)(3). Where part of an organization’s net earnings inures to the benefit of private persons or where more than an insubstantial part of its activities benefit private interests, the organization will fail to qualify, or lose its tax-exempt status under section 501(c)(3). In addition, section 4958 excise taxes may be imposed on its disqualified persons and organization managers as defined under section 4958(f). Even in cases where the organization does not operate for the personal benefit of its founder, it may fail to qualify for section 509(a)(3) classification for several reasons. It might be controlled by disqualified persons. It might not be sufficiently responsive to the needs or demands of a supported public charity. It might not maintain a significant involvement in the affairs of a specified publicly supported charity. A specified public charity might not be motivated to be attentive to its operations Loss of section 509(a)(3) classification means that the organization would be classified as a private foundation, subject to excise taxes under chapter 42 for a variety of reasons including self-dealing transactions and improper investments.
_Additional information_:
/Public Charity or Private Foundation Status, Issues Under IRC 509(a)(1)-(4), 4942(j)(3), and 507,/ 2003 EO CPE Text Topic B http://www.irs.gov/pub/irs-tege/eotopicb03.pdf
/Control and Power: Issues Involving Supporting Organizations, Donor Advised Funds, and Disqualified Person Financial Institutions/, 2001 EO CPE Text Topic G http://www.irs.gov/pub/irs-tege/eotopicg01.pdf
/Public Charity Classification and Private Foundation Issues: Recent Emerging Significant Developments/, 2000 EO CPE Text Topic P http://www.irs.gov/pub/irs-tege/eotopicp00.pdf
/Supporting and Publicly Supported Organizations/, 1993 EO CPE Text Topic J http://www.irs.gov/pub/irs-tege/eotopicj93.pdf
/Exclusion from Private Foundation Status Under IRC 509(a)(3)/, 1982 EO CPE Text Topic B http://www.irs.gov/pub/irs-tege/eotopicb82.pdf
Fun stuff! I sure am glad the stacked Board is finding an excellent, licensed, bonded, high powered, high paid, unaffiliated, CPA to certify we have met all those pesky general requirements at the strategic level as well as all the properly nuanced shifty definitions referenced by link and of course the entire history of IRS case law and whatever new stuff they making up to extend the envelope as we think.
Clearly we are not a dynamic duo structure yet as most of the document discusses but perhaps some of the subprojects or new projects with large scope such as Wikiversity could become independent organizations with mutual support and accountability. Or we could seek to partner with some appropriate existing 503(s) with experience in this mutual cross checking requirement.
I wonder if Wikiversity has to be accredited before we start an endowment fund to guarantee perpetual, stable, adequate performance as a grid initilization, calibration and fuzzy logic center?
Further, I wonder if specific endowments could be established at existing accredited land, sea, space and/or air grant universities involved with distributed supercomputing to fund local redundancy assets sufficient to establish a Wikiversity Grid specific oceanstore substrate with appropriate diffusion rates, data pumping stations, backups, alerting (say parental controls or warrant specified data products) and toxic waste or bit rot repair handling provisions. Might attract some attention from Globus Developers if we used their tools to implement a full up permanent grid.
Actually I think an appropriate google search would probably turn up appropriate email contacts for all of the above should it be decided how we could usefully setup independent entities and design appropriate power control checks, balances, and audits between the various entities to meet operational and regulatory cross checking and auditing requirements.
Anybody know when some formal reports or conclusions routinely confirming the Wikimedia Foundation's tax status and compliance will be available for further assessment and planning purposes to the general public vs. the private working theaters or comm channels?
Regards, lazyquasar
On 4/24/06, Michael R. Irwin michael_irwin@verizon.net wrote:
Anybody know when some formal reports or conclusions routinely confirming the Wikimedia Foundation's tax status and compliance will be available for further assessment and planning purposes to the general public vs. the private working theaters or comm channels?
Regards, lazyquasar
The 990-EZ for Wikimedia's first year is already available on Guidestar. Any later ones which were filed (there should be at least one) are required to be provided by the Wikimedia office upon request. I suppose someone should send Danny an email requesting them.
Anthony
Michael R. Irwin wrote:
Delirium wrote:
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.
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.
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.
-Mark
On 4/23/06, Delirium delirium@hackish.org wrote:
Michael R. Irwin wrote:
Delirium wrote:
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.
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.
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.
I thought the Gates Foundation *was* a 501(c)(3) organization. I could be wrong about that, though. Either way, a 501(c)(3) can be a private foundation *or* a public charity. In fact, all 501(c)(3) organizations which make more than $5000 other than churches are by default considered private foundations unless they apply for and qualify as public charities under 509(a). (see IRC 508(b) and 509(a) at http://www.access.gpo.gov/uscode/title26/subtitlea_chapter1_subchapterf_part...).
Also, donations to private foundations generally *are* tax deductible, just to a lesser extent (30% of AGI vs. 50% for most individual taxpayers).
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.
The 1/3 test is 509(a)(2). The other (trickier) tests are 509(a)(1), 509(a)(3), and 509(a)(4).
Anthony
On 4/23/06, Anthony DiPierro wikilegal@inbox.org wrote:
I thought the Gates Foundation *was* a 501(c)(3) organization. I could be wrong about that, though. Either way, a 501(c)(3) can be a private foundation *or* a public charity.
Just checked with Guidestar (I'd give a link, but you need a free account to see the information). The Bill & Melinda Gates Foundation "is a 501(c)(3) Private Nonoperating Foundation."
Anthony
If we did this we could add it in our donation page so that ppl who click thru to there might become users just to display the adds. This might increase the revenue stream a bit more than what it otherwise would be. Maybe also if we put an automated message on everyone's talk page about it when we introduce it. en. has (i think) 1 million users, most of whom never edit, but if even a small percentage of them read while logged in (quite possible - is there some easy way to mine the Database data to find out?) then most would see the message and a percentage would opt-in which would still be 10s maybe even 100 thousand people.
paz y amor, -rjs.
On 24/04/06, Anthony DiPierro wikilegal@inbox.org wrote:
On 4/23/06, Anthony DiPierro wikilegal@inbox.org wrote:
I thought the Gates Foundation *was* a 501(c)(3) organization. I could be wrong about that, though. Either way, a 501(c)(3) can be a private foundation *or* a public charity.
Just checked with Guidestar (I'd give a link, but you need a free account to see the information). The Bill & Melinda Gates Foundation "is a 501(c)(3) Private Nonoperating Foundation."
Anthony _______________________________________________ foundation-l mailing list foundation-l@wikimedia.org http://mail.wikipedia.org/mailman/listinfo/foundation-l
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Anthony DiPierro wrote:
On 4/23/06, Delirium delirium@hackish.org wrote:
Michael R. Irwin wrote:
Delirium wrote:
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.
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.
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.
I thought the Gates Foundation *was* a 501(c)(3) organization. I could be wrong about that, though. Either way, a 501(c)(3) can be a private foundation *or* a public charity. In fact, all 501(c)(3) organizations which make more than $5000 other than churches are by default considered private foundations unless they apply for and qualify as public charities under 509(a). (see IRC 508(b) and 509(a) at http://www.access.gpo.gov/uscode/title26/subtitlea_chapter1_subchapterf_part...).
Also, donations to private foundations generally *are* tax deductible, just to a lesser extent (30% of AGI vs. 50% for most individual taxpayers).
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.
The 1/3 test is 509(a)(2). The other (trickier) tests are 509(a)(1), 509(a)(3), and 509(a)(4).
Thank you Anthony for the excellent clarification! I will file this information for future reference and sleep comfortably tonight knowing that you and Mark are well informed on the general requirements of non profit foundations. No longer an immediate issue of interest to me unless we decide it would be beneficial to have an independent Wikiversity organization to work with the Wikimedia Foundation in meeting long term requirements.
Sincerely, Michael R. Irwin
Delirium wrote:
Michael R. Irwin wrote:
Delirium wrote:
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.
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.
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.
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
Gregory Maxwell wrote:
I'd guess the open questions would be:
- How would this impact the charitable non-profit status of WMF?
Zero impact. Nonprofit means that surplus revenue is not handed to private individuals as a return on investment. The Wikimedia Foundation can funnel as much money as they and their contributors feel they are willing invest in the public good/purpose as per the charter/organization plan/etc. approved by the State of Florida. I have been told that arrangements are in progress to select a CPA and get the first required audit completed.
The Bill and Melinda Gates Foundation has assets of approximately 25 billion dollars so given billy boy's and pals past performance in extracting revenue from captive or coerced markets it probably has an annual income from stock dividends or splits anywhere between 2.5 and 5 billion dollars.
That revenue is government regulated and must be spent in accordance with the laws of the state, country or tax haven the foundation is setup within. If you are interested you might be able to find an audit report for past years online somewhere.
- Will the advertising programs be okay with only showing the ads to
some small fraction of our users?
Several potential problems occur to me:
1. Back in the good ol days whenever the issue of revenue came up Jimmy always came forward as a generous sugar daddy with deep pockets. The issue always went away. I believe he made some committments regarding ads and ad revenue. He also made some good points about the benefits of no distraction from the authentic information on an encyclopedia page.
He will probably take a bit of a credibility hit with the forkers he was discouraging if he now decides that advertising is necessary and ok. Certainly I will waste no opportunity to shout it from the housetops.
2. Advertising revenue implies counting who and how may have seen the ads. I am already rationing my use of google and other search engines which spy on me and which are required by law to secretly share the results of this spying with regulatory authorities and secret police. Further, most of the privacy statements are long winded and weasally but eventually get around to some kind of sharing with affiliates, partners, consortium, multinational conglomerate pieces, etc. etc.
Probably the easiest way to implement this user choice is a fork. Answers.com currently supports itself by reporting Wikipedia data packaged with advertising. There are others around the net. Most of them do not provide identification information regarding who owns the revenue stream generated. I sincerely hope they are not affiliated with any of our volunteers, employees or stacked Board members or affiliated assets.
An easy way to experiment would be for Wikia to turn on a fork using user choice as you suggest and find out what happens.
If this would be too potentially detrimental to our all powerful figurehead and beloved God King or the community ..... then some other volunteer, developer, profiteer, or entrepreneur could emulate answers.com using the methods you suggest and possibly get rich.
3. Revenue sources are always applicable to discussion regarding fat cat biases built into information products. The guys with the gold always want to make the rules ... and then change the rules when somebody starts to kick the shit out of them on their own playing field or even demand the dignity due a beast of burden diligently pursuing masters' programs given priority over personal responsibilities or inclinations.
This is somewhat similar to the debates we used to have over whether P'hds simply must have courtesies and preference due their long years of servitude in academia rather than justify their opinions with citations and actual data or arguments if Wikipedia were to attract any adequate expertise to prosper. I wonder how he is doing with his for profit cable venture presenting P'hd'ed expertise freed from academia to the masses?
Who makes the rules around here? The guy that controls the stacked Board controlling the nonprofit foundation paying for the centralized editing bandwidth, the advertisers with the gold, the P'hds with unsubstantiated opionions and no time to make their case piece meal with drooling slackjawed trolls or script kiddies experimenting with Turing Tests, the measily masses of volunteers who show up occasionally, or the enlightened readers/writers of the TINC list?
Regards, lazyquasar
On 4/23/06, Michael R. Irwin michael_irwin@verizon.net wrote:
Gregory Maxwell wrote:
I'd guess the open questions would be:
- How would this impact the charitable non-profit status of WMF?
Zero impact. Nonprofit means that surplus revenue is not handed to private individuals as a return on investment. The Wikimedia Foundation can funnel as much money as they and their contributors feel they are willing invest in the public good/purpose as per the charter/organization plan/etc. approved by the State of Florida. I have been told that arrangements are in progress to select a CPA and get the first required audit completed.
The Bill and Melinda Gates Foundation has assets of approximately 25 billion dollars so given billy boy's and pals past performance in extracting revenue from captive or coerced markets it probably has an annual income from stock dividends or splits anywhere between 2.5 and 5 billion dollars.
As has already been pointed out, it's simply not true that there is zero impact. As for your example, the Bill and Melinda Gates Foundation is a private foundation, not a public charity, and they don't make their revenue off of advertising anyway.
One need only look to the Mozilla Corporation to see the impact of making advertising a significant portion of revenue. Note I said the Mozilla Corporation, not the Mozilla Foundation. To quote Wikipedia: "The Mozilla Corporation is a wholly owned subsidiary of the Mozilla Foundation that coordinates and integrates the development of Internet-related applications such as the Mozilla Firefox web browser and the Mozilla Thunderbird email client by the growing global community of open-source developers, only some of which are employed by the corporation itself." "The Mozilla Corporation was established on August 3, 2005 to handle the revenue-related operations of the Mozilla Foundation. As a non-profit, the Mozilla Foundation is limited in terms of the types and amounts of revenue." Mozilla wanted to charge Google et. al. lots of money to put their search engines in the search engine box of the browser (essentially, advertising). So they started a wholly owned taxable subsidiary corporation to do so. It's much easier than dealing with UBTI, the public support test, and the risk of losing non-profit status.
That would probably be the best solution for Wikipedia as well if they wanted to get any significant amount of advertising revenue. Form a wholly owned subsidiary corporation and put the ads on the for-profit site. The edit link would point to the standard site owned by the non-profit. This would also answer the opt-out/opt-in question. To opt-in to ads you go to wikipedia.com. To opt out, you go to wikipedia.org. (Or whatever the two different urls were).
Anyway, I'm not a lawyer, and not even a CPA, just a lowly non-government-regulated tax accountant. This is not tax advice, blah blah blah (whatever crap that lawyer keeps saying about Circular 230, that goes for me too).
Anthony
Anthony DiPierro wrote:
Anyway, I'm not a lawyer, and not even a CPA, just a lowly non-government-regulated tax accountant. This is not tax advice, blah blah blah (whatever crap that lawyer keeps saying about Circular 230, that goes for me too).
Anthony _______________________________________________
Thanks for the info. You are way above me in knowledge on these issues. I thought we were discussing the basic accounting question and the difference between the concept of gross revenue and net profit returned to personal pockets.
This concept of interlocking mutually regulating/cross checking mazes of incestous relationships in non profits is new to me.
I knew this kind of crap is used in interlocking Boards of Directors, divisions, stock holdings, etc. in conglomerates and holding companies of for profit corporations but I have only read laymans interpretations of this or introductory business texts, never actually experienced it directly in any meaningful way.
Thanks for the reference on Circular 230. I will check it out.
Regards, lazyquasar
2006/4/23, Tony Bruguier tony.bruguier@gmail.com:
I'm new to this list, so please forgive me if I mess up. There's been some talk about advertisement on wikipedia or not. Why not make it optional, so that each user decides if he/she wants to see the advertisement? That way, users can "support" wikipedia or not. I don't think that'd be a sell out.
I personally would not object to advertisement, as long as it's not intrusive (popups, flashing, pushing a significant portion of the article away from first page, etc.) and editorial independence is safeguarded. However, I do know that there also exist Wikipedia editors who do fiercely oppose it, and we might simply lose some of them.
Having said that, I see some practical difficulty with your proposal. Would anonymous visitors and people who have not changed their settings see the advertisements? If yes (opt-out system), then I fear that the abovementioned people will still have the same strong objections. If no (opt-in system), then I doubt whether the amount of money generated by such advertising would be worth the trouble taken.
As said before, I personally think some simple advertisement would be a good way to raise some money, but I also know there is quite some resistance in the community about it. Or rather, there was such resistance a few years ago. Of course attitudes may have changed since then.
-- Andre Engels, andreengels@gmail.com ICQ: 6260644 -- Skype: a_engels
On 4/23/06, Andre Engels andreengels@gmail.com wrote:
I personally would not object to advertisement, as long as it's not intrusive (popups, flashing, pushing a significant portion of the article away from first page, etc.) and editorial independence is safeguarded. However, I do know that there also exist Wikipedia editors who do fiercely oppose it, and we might simply lose some of them.
No one who isn't some profit all costs would want that. Look at mediawiki sites like wikia.com to see how advertising can be integrated into mediawiki without being obnoxious.
Having said that, I see some practical difficulty with your proposal. Would anonymous visitors and people who have not changed their settings see the advertisements? If yes (opt-out system), then I fear that the abovementioned people will still have the same strong objections. If no (opt-in system), then I doubt whether the amount of money generated by such advertising would be worth the trouble taken.
It isn't an opt in systems if anons get it by default. I'd propose a fully opt in system for two strong reasons:
1) We can be reasonably confident that an opt-in system will not have a substantial negative impact on the normal flow of donations. 2) It's the only solution which isn't likely to enrage some people.
There may be a place in the world for opt-out advertising, but it's a fundamentally different issue.
As said before, I personally think some simple advertisement would be a good way to raise some money, but I also know there is quite some resistance in the community about it. Or rather, there was such resistance a few years ago. Of course attitudes may have changed since then.
There is a lot of resistance, for some good reasons and for some bad reasons. The absolutely enormous income possible from advertising could have a tremendous impact, it could allow positive development unparalleled in the world of free content... but it could also create a shift away from our most honorable goals. I think people are right to fear it.
But just because site wide, always on, reader impacting, advertisements carry risks we find unacceptable, that doesn't mean we must avoid minor things like opt-ins advertising for editors.
It's like the cafepress shop... doesn't bring in much money, but it doesn't hurt either.. an no one seems to be leaving over it.
On 4/23/06, Tony Bruguier tony.bruguier@gmail.com wrote:
Hi,
I'm new to this list, so please forgive me if I mess up. There's been some talk about advertisement on wikipedia or not. Why not make it optional, so that each user decides if he/she wants to see the advertisement? That way, users can "support" wikipedia or not. I don't think that'd be a sell out.
Tony http://en.wikipedia.org/wiki/User:Bruguiea _______________________________________________ foundation-l mailing list foundation-l@wikimedia.org http://mail.wikipedia.org/mailman/listinfo/foundation-l
Thanks for your suggestion. I for one would not feel fundamentally disturbed by seeing ads imcluded like at wikia.com, especially not when they can help to secure the future of Wikimedia's projects. However, one major concern persists no matter if we make ads optional or mandatory: How can it be assured advertisers don't influence Wikipedia's content? IMHO, once we start selling ads customers will invariably affect our content to some degree. For the most part probably not in a spectacular way but rather in a very subtle manner. For example articles that deal with companies that regularly advertise on Wikipedia will most likely tend to contain slightly less critisism than they normally would, in order not to lose those customers. They will possibly have a tendency to sound a little bit more well-meaning than articles on competing companies that don't buy ads. On top of that, Wikipedia editors will spend more time and effort on writing content dealing with companies that advertise on Wikipedia. Not because of any gross corruption, simply because they will be more aware of them, seeing their names while spending time at Wikipedia. An increased number of commercial links in articles might be another possible side-effect of allowing ads.
Once again, this is not to say that I'm fundamentally opposing all forms of advertising under all circumstances. It is vital for our project to have a solid financial basis and we might one day reach a point where donations will no longer be sufficient. However, the community should be aware of the fact that generating income by means of selling ads will almost invariably reduce our independence to some degree.
Arbeo
On 4/23/06, Tony Bruguier tony.bruguier@gmail.com wrote:
Hi,
I'm new to this list, so please forgive me if I mess up. There's been some talk about advertisement on wikipedia or not. Why not make it optional, so that each user decides if he/she wants to see the advertisement? That way, users can "support" wikipedia or not. I don't think that'd be a sell out.
If someone wants to implement an "opt in" ad feature, I have no real opposition to it, but it strikes me as looking for love in the wrong place. The tiny fraction of pageviews that would be ad-enabled does not, in my belief, make this a significant revenue stream.
I remain opposed to anything but an "opt in" model for ads unless our existing fundraising methods fail us. We've learned a lot during the last fundraising drive (e.g., donation targets are necessary, appeals and other emotional or interesting messages increase the incentive to donate), and I'll be interested to see how the next one goes.
Erik
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