Posted on 12/08/2001 12:25:12 AM PST by Jim Robinson
Is Free Republic a commercial operation or a charity?
Well, here's the way I see it. Free Republic is neither a charity or a commercial operation. It is simply a website. A public political bulletin board, just like thousands upon thousands of other non-commercial, not for profit, public political bulletin boards, only larger.Our participants post and discuss political topics, government topics, constitutional issues, current events and other miscellaneous topics. I operate it as an avocation (a hobby). I was sued by a couple major media players, so I filed as an LLC to gain at least a small amount of liability protection in case others want to jump on after the LAT/WP or in case some wild-eyed poster comes in and posts a bunch of crap that brings lawsuits my way.
In the beginning, I paid all of the expenses of operating the website out of my own pocket. But as it grew and the expenses grew, and I went broke, I could no longer afford the bills. Free Republic has tens of thousands of participants and is steadily growing. Because we are posting under the fair use provisions of copyright law, I cannot charge a membership fee, I cannot sell merchandise, I cannot sell advertising, and I cannot enter into any commercial business. I simply cannot earn money on Free Republic as a commercial operation.
And, because of the fact that we advocate various political positions and even support (by arguing for or against) various political candidates and or conservative issues or causes, I cannot qualify as a public benefit non-profit charity (501C, etc.).
Because I have no personal capital or resources, and I cannot seek outside investors or capital (that might be construed as being commercial), and I cannot charge for services or products (that may also be construed as being commercial), I'm pretty much stuck with the choice of folding up the public political discussion board (thus depriving myself and thousands of others this obviously effective and established opportunity of exercising our first amendment rights to political free speech), or allowing others to voluntarily donate money as gifts to pay the expenses. There is not much room to do anything else.
All we (our participants) want to do, both as individuals and as a group, is to be able to exercise our first amendment rights to criticize the illegally expanding government and its chief advocate, the mainstream media. This is our right under the Constitution. And we do this by posting news articles and other public information to use as a base of comparison and basis for for critique and political discussion.
Because we cannot be commercial and we cannot be a public charity and I do not have the financial wherewithal myself to fund it, the readers and participants willingly chip in to keep the website going. There is no way this giving is commercial and there is no way that it is a public benefit charity. It is simply a relatively small number of the total readers and participants willingly taking it upon themselves to gift money to Free Republic to keep the discussion board from going broke. No one is forced to contribute to Free Republic and, in fact, the vast majority do not. No price or fee is charged to anyone to read Free Republic or to participate in the discussion. It is totally free.
We do not engage in commerce. We do not sell anything. We do not have customers. We do not have subscribers. We do not have a paid membership. We do not have investors. We do not purchase anything, other than bandwidth and equipment to keep the discussion board operating. There is no inventory, no manufacturing, no sales, no services rendered, no investors, no stockholders, no board of directors, no outsiders, no sales people, no employees, no payroll, no payroll expenses, no payroll taxes, no employee benefits, no nothing. There is no commercial business taking place here. There is nothing commercial about Free Republic.
A commercial operation would be doing some kind of business. It would have a price list or rate book and or a catalog or product sheet or a description of product or service or some other communications vehicle that would allow potential customers or clients or subscribers or members or investors or whomever to see what is offered, what he is purchasing, and how much he would have to pay for it, and how it compares to the competition. There is no proposal or sales order or contract or agreement that describes a product or service to be delivered for a fee or a price and there are no contractual documents or agreements between buyer and seller describing how money or goods or services are to change hands. There are no guarantees or warrantees for fitness or suitability. Nothing. No commercial business is transacted.
Free Republic is not a commercial operation, period.
So, then, is it a public benefit charity?
Free Republic does not fit within the definition of a public benefit charity or professional fundraising operation. Participants willingly give to keep the lights on and the board operating, but Free Republic is not a registered public benefit charity or church or any other such operation. It is not a 501C non-profit organization, in fact, because it engages in politics and supports and promotes various conservative political issues and causes, it cannot qualify as a public benefit charity.Free Republic's legal and tax status is a California Limited Liability Company filing with the IRS on form 1065. The excess of receipts over expenditures for an LLC, such as Free Republic, LLC, flows back to the members (mainly me in this case) and is reported as income on our personal tax returns.
There is no money paid out to outsiders or investors or charity seekers or beneficiaries. We do not raise funds to be used for public benefit. We do not raise funds to be given to others. We do not take on charitable causes. We do not offer charitable services.
The gifts we receive are not charitable giving in the sense of a 501C or other state or federal chartered public benefit charity. There are no beneficiaries. We are not a church, not a hospital, not a foundation, not a trust, not a fund, not a school, not a library. not a public benefit corporation and we are not tax exempt. The givers do not receive a tax deduction for their gifts. There are no strings attached in exchange for the gifts. Once the gift is given the giver no longer controls the gift. We have no financial or fiduciary duty to the giver.
We are simply not subject to the corporate charity or public benefit laws of the various states and we are not a public benefit charity.
Is it a tax exempt operation?
No. We pay taxes on the excess of gifts received over funds paid out, because we have to in order to comply with the IRS regulations for hobbies, but that does not make us a commercial business. Again, we do not manufacture, purchase for resell, or provide a service in return for pay. We do not sell memberships, or advertising or anything else. We do not operate a business. Any cash received is received as gifts. The givers are not promised anything in return nor do they receive anything. No one must give to use Free Republic. The website is free to all participants. It is simply a public political discussion forum that I operate as an avocation and people are willing to freely give in order to keep it alive and on the air, because they love it.What is Free Republic then?
So, Free Republic is not a commercial operation nor is it a charity. What is it then? It is simply what it is, a non-commercial, not for profit public (decidely for conservatives) electronic townhall meeting and bulletin board discussion forum operated as an avocation with its expenses paid for in the form of taxable gifts from some of its fans because they love it, and they do not want it to die.
Its the voice in the wilderness crying.......!
In that to "government" types, any idealogically driven organization is "political", good luck to actually proving it, but if you were to present a staff of ph. d's and divide the topics into majors... a sharpie could probably pull it off.
Testing, matriculation, AND a credit hour, or semester hour fee... even miniscule would do... since you don't actually charge, but RAISE donations for the LLC you currently operate, THE lack of tuition is probably the biggest hurdle.
BUT despite the legal classifications, the EFFECT and the bonafide operation of the non-profit, research and educational corporation is probably a loophole you SHOULD be looking into.
We have computer technology majors teaching here, psych professors, religious ph. d.'s, med researchers and doctors, clinicians, research biologists, cultural anthropologists, biologists majoring in macro cellular physics, english majors, HISTORY lecturers, quantum physics doctors... What the heck do you need to figure out what is being done here... Mr Computer Science instructor, robinson?
Were all the energy being spent on "home room monitors" directed towards twenty or thirty syllabi, with term papers due every thirty days from "students who pay tuition via the internet," I don't see much difference between this an a few other "distance education" graduate schools on the net today.
The educational nonprofit, slips between the categories of charity and business nicely.
FWIW.
May they rest in pieces.
Mr. Robinson, when you are being attacked, praise the Lord, for He has said, "All who live godly lives will be persecuted," and, "The servant is no better than the Master: if the Master is persecuted, the servant will certainly be also."
To quote another (more wordly) encourager, Sir, "Never, never, never, never, never give up." [Winston Churchill]
Amen. God bless you.
I've bookmarked this baby. It'll come in handy.
Although there may be a handful here who, for some reason, just have to keep running around this same tree, please know the overwhelming majority of Freepers know precisely what FreeRepublic is and what it takes to operate it.
Thank you so much for FreeRepublic and all you put up with to keep it going.
I doubt if most of us understand just how much time, emotion and treasure Jim has given just for us to have FR.
FR is like a child that is still in its infancy. It has already shown its promise and what it can become, but it requires constant care, has forces continually attacking it and the caregiver, and seems to live on a knife edge between life and death.
I have friends who have a manac-depressive child who needs constant care. What they are going through has drained them physically, emotionally and financially. I can see what they are going through, but I cannot really know it since I have not lived it, nor do I ever want to.
LOL!
"Education of constitutional and conservative principles" would pass muster as a mission statement for the IRS as a non-profit. Just check the box on the IRS form that says: "Educational," and provide a one-paragraph narrative of the mission statement. The downside to a non-profit is the requirement of a elected board of directors, and so on...
JR, And as far as "inventions" that give freedom to peoples and individuals, it ranks right up there with Henry Fords assembly line for automobiles. FREEDOM!!! Thanks. Peace and love, George.
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