Archive of UserLand's first discussion group, started October 5, 1998.

Re: The FSF is predatory and is not a charity

Author:David Adams
Posted:8/29/2000; 11:32:50 AM
Topic:Next survey: Are you an open source developer?
Msg #:20499 (In response to 20402)
Prev/Next:20498 / 20500

The IRS does not consider an activity "charitable" unless it targets those in need -- which makes sense. That's what a charity is. What's more, a 501(c)(3) may not compete directly with private enterprise except for the purpose of fund-raising, and the money raised in this way is considered "unrelated business income" and is taxed. If it amounts to more than 50% of the organization's income, it can't remain a 501(c)(3) non-profit.

I don't understand how this can be the case. 501(c)(3)-qualified organizations certainly do compete with private enterprises all the time. Public radio and television compete with private broadcasters; public universities compete with private universities. Maybe I'm not understanding the claim here, but as I read it, if you're right, there are a lot more organizations than the FSF that should lose their 501(c)(3) status.

-dave




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