[Foundation-l] Optional advertisement on wikipedia

[Anthony DiPierro]

On 4/23/06, Michael R. Irwin <michael_irwin at 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