[Foundation-l] Optional advertisement on wikipedia

[Anthony DiPierro]

On 4/23/06, Michael R. Irwin <michael_irwin at verizon.net> wrote:
> Gregory Maxwell wrote:
>
> >I'd guess the open questions would be:
> >
> >1) 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