#Mastodon forms new 501(c)(3) non-profit entity with new board of directors in the United States to facilitate tax-deductible donations and in-kind support:
We've noticed that a lot of you had some questions about this announcement, so we've collected the most important ones in a new FAQ section on the page above 👆
Good to see that Mastodon has a 501(c)(3)! Also,, even if not all the board is elected, there's a lot of value in what Wikimedia and Global Voices do, with at least some board seats open to election from staff and the community.
With regular elections, the board gets to see and hear from the evolving set of hopes, concerns, and constituencies that are of interest to the community every time an election arises.
@chema@Mastodon Why stop there? Maybe every employee should be put to a vote, as well? Literally no company in the world has a user-elected board of directors. Why do you think that is? Is it possible that using a platform and running a platform are different skillsets? I've worked for a platform where I was also a user & I now think so. 🤔
Don't get me wrong, representation is a great thing! Users should have representation in the roadmap and features and content moderation, for example.
@williamgunn@Mastodon Many, very effective, nonprofits (which are a type of corporation) have elected board of directors. Examples include the Sierra Club, REI, ICANN, etc. In addition, some (for-profit) corporations also have employee representation on the board of directors.
I think most nonprofits have unelected, self-selecting board of directors because it is very convenient for the executive leadership (who are not just hired by the board, but often play an outsized role in selecting new board members). It leads to weak accountability and can easily breed complacency within the executive leadership and even tolerance of relative incompetence.
This is how we can have organizations like the Salvation Army or the YMCA, which have multi-billion dollar budgets, and yet have a fraction of the public benefit of labor unions like SEIU, that has a budget an order of magnitude smaller, but a member-elected executive board that push for broader accountability. This is on top of their statutory purpose to further union member interests.
Four. I was elected to the Sierra Club San Francisco Local Group and to the SF Bicycle Coalition's board of directors, the largest city-based advocacy org in the country. I was also a (non-elected) board director to my local Community Benefit District here in SF for eight years (which also happens to be the largest in the city) as well as a smaller nonprofit.
This is in addition to my professional experience staffing executive committees within organized labor and being involved in public deliberative bodies. I've got a pretty balanced perspective of the different board governance models.
@chema@Mastodon That's surprising and good to hear. I think I understand better where you're coming from now. So your experience is all advocacy-related? Would it be correct to say your concerns are, at a high-level, about the corrupting influence of money or is it more about capitalism as a structural factor?
It is more about having meaningful and actionable community accountability and responsiveness to stakeholders (i.e. users), coupled with a desire to build an organic community. It might not always be a nimble structure, but it can be a long-lasting resilient structure if properly managed. See the governance structure of ICANN for an example of what I mean.
And my time as a board member with my local CBD (our version of a business improvement district) definitely helped shaped my perspective as much as my time being on advocacy-related boards.
@chema@Mastodon That's fair. I suppose I was biased by seeing so many arguments in the thread that basically boil down to "capitalism bad" that I mistook where you're coming from. My time on the inside of a content platform certainly exposed me to a lot of user input that was terrible because there's so much they don't know on the outside, but I can see the value of representation in some form.
I mean, capitalism is bad, but you're correct that my criticism isn't unique to capitalistic structures. Even anti-capitalist, radical collectives can suffer from bad "governance" (see The Tyranny of Structurelessness by Jo Freeman below for a wonderful analysis on the subject).
My experience has persuaded me that the statutory fiduciary duties of nonprofit boards have been, by convention/tradition, been assigned to executive leadership.
And to address your fear, an effective board would understand that their role is not to micromanage staff, but to direct the nonprofit so it can achieve its stated purpose by managing the executive leadership. The scopes are very different.
@chema@Mastodon That all checks out, including the bit about capitalism (though I'd argue it's not as bad as various other things that have been tried), but I think a content platform presents unique challenges due to the heterogeneity of the user base. It would be interesting to see who would seek to be elected, what their platform would be, etc. It seems inevitable there would be pressure to have multiple seats and then you're basically creating the Fediverse Congress.
@Mastodon please tell this more often: "Most people don’t realize the core developer team of Mastodon is still just two people, and it is these last donations that have allowed us to open a third full-time developer position."
@webmink@Mastodon We reached out to multiple potential fiscal hosts, but it was not this easy. I cant tell you what the issues were (I have not been involved directly in the process) but I know there have been some attempts at it.
@renchap @Mastodon
OK. I would expect a c3 to be a difficult vehicle for the activities I'm aware of at Mastodon. Getting an IRS determination will be key. I would probably have opted for a different path ..
@webmink@Mastodon Our activities are ran from the German structure, and we have no plan to change that. I am not a lawyer and not involved in the US operations, but I expect that is has been studied before doing all of that.
@iju@Mastodon we are still EU-centric, the goal for the US structure is to be able to gather more funding in the US, the german structure remains our operating entity
I'm just hoping this doesn't end up being the first step of many. But time will tell, I suppose. Would hope the German regulators could be reasoned with, but of course simply the fact that this happened must eat some confidence on future.
@iju@Mastodon I do not think we plan to move operations to the US, even if we do not get the non profit status back in Germany. As explained il the blog post. We never used the status to get tax-free donations, so there it is not really mandatory for us.
Just worried that the US-non profit might get pressure from donators from US-legistlation, or that the board of directors start to influence the direction of the development.
That's also one of my concerns and I hope it's not a prelude to the entire operation to move to the US as it would be a very bad thing in the long run.
@rzeta0@iju@Mastodon The US non-profit can accept donations from other US entities that require the donations to go to a non-profit, and they donate money to the german structure to improve Mastodon, like any other individual company or individual can do. Donors do not have a voice about the direction of the project.
@rzeta0@iju@Mastodon Because they know how managing a non-profit means, have a lot of experience, connections, and have been essential in making this happen.
Funding open-source is a hard task and requires a huge effort. The US structure is part of this work (but not the only thing we do, for example we recently got some grants from the EU), and is essential if we want to be able to raise money from US entities (which amounts to a lot of the money going to charities)
I'm reading many comments on the main post. To clear a few things up, the US IRS decides, "yes or no" if something is a NPO & that's it. No control, no operational involvement, etc.
Under the Internal Revenue Code, only U.S. NPOs are eligible to receive tax-deductible charitable contributions from U.S. taxpayers.
If I donate to a non-US Mastodon NPO, I still get taxed.
If I donate to the US Mastodon NPO, that money isn't taxable when I file my US taxes.
@renchap@iju@Mastodon I got you. But it's a shame the EU has not a legal framework to support clearly nonprofit initiatives from the EU and it's necessary to rely on an American legal framework.
This just came to my mind about the recent announcement of the @EU_Commission saying their experience on #Mastodon was a success, but they cannot find anyone to host a server for their accounts!
Maybe it's time for them to seek some American role models to have a server.
It should be noted that the designation "non-profit" is nothing other than a #US / #German#TaxShelter play
It has absolutely nothing to do with a double-entry, debits-and-credits-based fiscal analysis or audit of #Gargron's books by a legitimate accounting firm
Short title: The rich get richer, while the poor stay poor
No surprise there: that's what #Mastodon has been all about, all along...
@FinchHaven@privateger@Mastodon
Reminder that $100,000 is an amount of that sounds big on paper, but when you use it on the expenses of running multiple servers that millions of people connect to every day, then split it between two full-time employees, it whittles down to minimum wage type numbers.
@Raccoon@FinchHaven@Mastodon@privateger yup. At market rates 100k wouldn't even cover a single full-time employee for a year, let alone server costs and whatever other expenses running .social would require.
Keeping two people housed and fed and running a social network on top of that for just 100k is pretty impressive. Thankfully they've got more than just that single large donation keeping the lights on
So by "sustainable" you must mean that our boy Gargron is at the helm of the Mastodon Deathstar Mothership with the default app on the default web site, and every other instance is begging for bread crusts just to keep their servers spun up
@FinchHaven@Raccoon@Mastodon what is the acceptable amount of support a service is allowed to have? And what is the maximum acceptable salary for a mastodon maintainer?
Add comment