Comment by KK7NIL
1 day ago
> Well, speaking in the case of the US, this would constitute product development which is well outside the scope of what a 501(c)(3) organization should be doing, which could thereby jeopardize their tax status?
Doesn't this apply only to for-profit products? There's plenty of 501c3's with free "products".
It is not about whether or not it is available for free, at cost, or otherwise, but whether or not the activity has the character of commercial product development. It's what the product is used for, not what price it's set at. A 501(c)(3) directly developing, or funding the development, of commercial software is not engaged in charitable, educational, or other exempt activities.
For reference: This is exactly what happened to the Yorba Foundation, and numerous others since then.[1]
[1] https://www.stradley.com/business-vantage-point-blog/irs-con...
There's clearly a change going on in the US government, and it very well may be that organizations such as Mozilla, FreeBSD, and Apache could all lose their 501(c)(3) tax exempt status in years to come.
At the end of the day though, 501(c)(3) status is a purely US concept, doesn't apply to international organizations internationally, and doesn't necessarily mean that you "can't" do what anyone is discussing here. It just means that folks gonna have to pay taxes and "donations" can't be written off on the taxes of donors.
Perhaps, at the end of the day, not pursuing tax-exemption/charity status is a more honest approach. It certainly doesn't precluding doing any of what has been discussed, it just changes the financial efficiency.