Episode: 3679
Title: HPR3679: Linux Inlaws S01E64: Non-profits in the US: A closer look at 501(c)s
Source: https://hub.hackerpublicradio.org/ccdn.php?filename=/eps/hpr3679/hpr3679.mp3
Transcribed: 2025-10-25 03:44:23

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This is Hacker Public Radio Episode 3,679 for Thursday the 8th of September 2022.
Today's show is entitled, Lionox and Law's Saeyi, non-profits in the US a closer look at
Eurx. It is hosted by Monochromic and is about 36 minutes long. It carries an explicit flag.
The summary is, the ins and outs of Eurx.
This is Nuxilars, a podcast on topics around free and open source software, any associated
contraband, communism, the revolution in general, and whatever else, fans is critical.
Please note that this and other episodes may contain strong language, offensive humor,
and other certainly not politically correct language. You have been warned. Our parents
insisted on this disclaimer. Happy mum? Thus the content is not suitable for consumption
in the workplace, especially when played back on a speaker in an open plan office or similar
departments. Any minors under the age of 35 or any pets including fluffy little killer
bunnies, your trusted guide dog unless on speed, and Q to T-Rexes or other associated dinosaurs.
Martin, how are things?
Hey, which things are fine about everybody's COVID?
Sorry, I think it's called Rona, no, maybe I'm wrong. No, I think it's either COVID-19
in contrast to 2021, I can't remember, or it's Corona, SARS, whatever. I keep forgetting.
That one, yes.
Pretty much like politics or bad weather.
And before I forget, this is of course Linux in loss season 100 episode 2758. We changed
the numbering scheme about the fortnight ago. If you want to catch up on the previous episodes,
free free. Of course, the website is Linux in loss, so you will find the fullback back catalog
on that website.
This is not about it.
Miss episodes, Martin, how are things over there on the almost green aisle?
Always very green.
Also known as the Kingdom.
It's very green, yes.
How are things interesting?
Hmm, something happened.
Yes, Martin, we are recording this on the 4th of July, year 25th.
Sorry.
2157, I think.
No, it's July 2022.
But as a matter of fact, we're recording this on the 4th of July, which is funny enough.
Something called the Tax Independence Day, originally named that is in something called the United
States of America.
Now known as Independence Day.
Yes.
It obviously wasn't the United States of America back then, but yet.
I mean, looking back, why did people go for independence to some extent?
Not just some extent.
First and foremost, it was about religion or the rest of it as you normally do.
But then things happened in Boston Bay and all the rest of it.
And tea was apparently thrown into the water, didn't make huge difference from a taste perspective.
It was because we're looking at what's wrong with water, right?
Yeah, it was on the east coast.
Exactly.
So never mind the faint taste of tea.
I didn't make it even.
Didn't last either.
But what did last is actually the independence.
You can find the details of time.
Exactly.
You can find the details in any history book.
It's money.
But given the fact that the UK or sorry, the key as in the K is heavily on the deep line from a kind of in the broader.
Political view of the world.
I don't think that the US is going back to British colony any time soon.
We were wrong.
Probably not with you, but some other kind of this, right?
Martin, I hate to spoil the fun, but Russia never was a British colony.
No, no, the other way around here.
You mean that Russia will also be invading, it invades the UK, sorry, the Kingdom.
Unlikely because we were talking about the US being independent, right?
So, yeah, it's all come to an end at some point.
In terms of what?
No, in terms of being no longer independent.
Well, they're overrun by some country.
Like what?
Canada, Mexico.
Unlike it.
I'm likely to be can.
Well, see, yeah, to be fair.
Probably.
I don't know how big the Mexican population is, but it is quite.
But it's basically, it's going to, it's better be a NATO state because otherwise the film,
the fifth, what is called paragraph will apply.
Not pleasant.
So, if for any people who are thinking about invading the US, just from a theoretical perspective,
please make sure that if you do this, that if you want to do this,
you do it from a NATO member state, only.
Because otherwise you will have the full force of NATO right against you.
And that's something that you want to do.
Unless.
Even.
I think NATO countries are not by tanks.
I was putting if you listening either you are not exempt from this clause.
So, don't even think about it.
Yes.
Okay.
But this is not a show about independence or invading the US from a NATO member state or not.
This is actually one of the most important episodes we ever did.
Especially if you're suffering from insomnia, very important.
Only the episode are reckoned on on flost licensing come second.
This episode will actually be on on five or one sees.
Yes.
As you say.
But go ahead.
No, carry on.
You said five or one see.
I thought you said five or one jeans.
No, no.
I may have done the wrong preparation.
No, no.
No, five or one sees a special type of organization in the US only I might add.
Especially relevant from attacks and other and some other perspective.
But as we will touch upon in about two hours, maybe two and a half hours time,
once we have laid the foundation for the following discussion, quite a few open source
and civil rights movements are filed or are classified as five or one sees.
No, this is why it may or may not be important because we had the electronic
foundation.
We had parts of the electronic foundation of the podcast.
We already had the FSFE and the podcast, which is of course the European
system organization of the free self of foundation.
And of course, we also had not exactly in the order of priority or never mind importance.
If you're listening, we're also the we're also all beloved and Laura's crow on the podcast.
Of course, representing the sick foundation and the sick foundation if you call Martin,
classifies as a five as a five or one sees C six.
But before we go into the level of detail, we should probably first and foremost put
a disclaimer in we are by no means lawyers.
Yeah, we are by no means text content.
I think the appropriate phrase is far from.
It's exactly.
Every text concerns, every text content similar to marketing that we get in Martin,
class immediately, so.
So anyway, so the following of course comes with the usual caveats,
please seek professional help in these areas.
I'm about that.
If you are seriously thinking about setting up a five or one C,
whatever subtype applies, please, as I said, please do get professional help.
Links may or may not be in the show notes.
And of course,
consultants,
if you want to sponsor something called lose in last email,
as a sponsor and legally lost on the you,
but without whether you may be before we go into the differences,
about five or one sees, we should probably explain.
The type of organization that a five or one,
one C generally in general is before we knew that we should probably say what it is.
Please go ahead.
Well, so the five or one C is a,
an American or US tax code that looks specifically for tax exempt organizations
in some way for more shape.
Think about your, your charitable organizations,
your education,
organizations,
and software foundations who have non-profit goals.
Think about it.
You just mentioned a very important term, non-profit,
because most, if not all of these organizations,
depending on the level of tax skills.
I don't say it.
It do not make a profit,
but before we go into into the details,
there's one important difference.
There are non-profit organizations,
and not for profit organizations.
Sorry, you want to, you want to explain the difference here?
Yeah, so the non-profit organizations,
the organizations that don't make any profit,
and the non-profit organizations that don't want to make profit.
But yes, you feel free to expand on that.
No, but Sparan,
non-profit means basically their income comes mostly from donations,
charitable ones, I might add,
whereas the not-for-profit organizations typically have some other,
have some additional social revenue.
And the main difference,
if common law is anything to go by,
normally not-for-profit organizations typically make some sort of tiny margin
on their revenue,
like anything between two and five percent,
whereas typically non-profits do not make any margin.
And of course, the margin being basically the difference
between the cost charged for a service in goods rendered,
and the cost, the original cost of these services
and goods in general.
This is known in the trade,
typically as a margin,
as a difference between stuff you buy,
and then of course also applies
from the services rendered by your labor force,
and the price at which you then sell any goods resulting
from the combined efforts of the services
and goods originally bought.
This is typically called a margin in the trade.
Is it? Okay. Yes.
Very much so.
If my economy, one-on-one,
not as anything to go by,
it dates back to about what,
30 years back,
or something, maybe even more.
Okay, so, fine.
So we defined that.
So what about the people that work for these organizations
and get paid for this?
I would call them nutters,
but that doesn't capture it.
No, I mean, these would be people with-
These would be people with five or one thing?
No, these would be people that pay taxes over.
From a taxation perspective,
you're looking at typically employees, right?
People are employed by the business,
so yes, they would be tax-level.
Unless, of course, they donate
some of the income back to the employers,
which, of course, then,
depending on the type of four or five or one thing,
would be tax deductible.
Well, that may be so.
Let's button it in.
Nutters is probably the wrong term.
We're looking at people with strong ideals.
Yes, very important.
Okay, so don't they have things like
state balls in the US as well?
I think five or one, see if memory
serves correct, is a federal tax regime.
Right, so as, let's say,
California could decide,
or let's tax these guys anyway.
No, they couldn't, because they would be
in RIS as internal revenue service,
guidelines,
and which all these
association runs.
It's guidelines can be ignored.
No, but I'm sure in the US,
you have multiple taxes, right?
You have federal tax and state tax, I'm sure.
Yes, Mike, but you see,
the RIS basically is on a federal level.
Yes, yes, this is what I mean.
So, state stuff doesn't apply.
So, this five or one stuff only applies to
the federal level, so you don't pay
federal tax, but don't necessarily mention
California Conservatory, or we don't care
about you five or one, so you pay us tax anyway.
So, you need to choose the right state as well, no?
I reckon this is where
our lack of tax
is the US constant.
Tax accountants
or whatever, tax, if you're listening.
We wish you have tax in the US.
In the US.
Yes.
The email, this is feedback,
and it is a lot of study you,
especially to
quench Martin's thirst for knowledge.
A local stake level.
Okay.
The US is when it comes down to taxes.
Before we go into too much detail,
why don't you give us some examples of
organizations we have set up
under this,
or have successfully applied for this exception.
Before we do this, we should probably
give you a short overview of the different sub
categories involved.
Okay.
It would make sense, right?
So there's the umbrella term five
or five or one C.
That is of course a federal IRS.
Okay. So what are A and B?
And then you have sub categories ranging from
the blue one.
A and B.
What are A and B?
You got the name Martin.
It's like, what?
The name B.
The loophole is basically that
this episode is actually titled five or one C.
So the C applies, not E, not the A.
Okay.
But if you're not asleep by now,
are now, Martin just promised to do an episode on the platform on ACMV. Exactly.
No, we'll take a few years to materialize.
Jokes aside, as I said at the beginning, we will go to the examples in a minute, and
that also will explain why is this important from a US perspective.
So the thing is basically that if any RS website is anything to go by, we are looking at
about 29 subcategories under 501c, ranging from 1 to 3, 29.
The most important things that apply to the, and now we're getting back into the context,
that apply to the Floss world, and to Floss communities, would be 401c3 and 501c6.
Okay. And the BSS.
The BSS have a name, these three and six.
Yes, the BSS talks about religious educational, charitable, scientific, laboratory, literary,
testing for public safety, to foster national and international amateur sports competition
or prevention of cruelty to children or animals organizations, that will be the three for
you and six apparently, business leagues, chambers of commerce, real estate boards, just
couple of examples for these two subcategories.
Now, one is of course important.
If we take a look at the free software foundation, if we take a look at the electronic
frontier foundation, these are typically examples for 501c3s, because they would fall
into the scientific sketched educational.
Yeah, I can't really, I can't see software foundation whatsoever.
Same thing, yes.
Yes, there are.
Yes.
Whereas a 501c6 would be a trade association, typically the Linux foundation, for example,
which is funny enough, filed as a 501c6, because as we all know, those of who you are listening,
the Linux foundation is an enterprise body of the community on an enterprise level using
Linux.
And now is the time as any to probably go into some of the details?
Characterizes, especially five or one c3s.
Okay.
Oh, sorry.
It's not a question, Martin, it's more like a further characterization of the free before
we go into the, before we go into the success or the success, if anybody's still awake.
Okay.
Let's go.
Exactly.
The R.S. also differentiates between a public and a private foundation for a three, and
the difference is basically that the income for a public foundation actually comes from
the public, whereas the private foundation is powered by investments and endowments.
And that makes a difference, basically, if you take a look at where you will actually
comes from, also the important difference between between a three and the six is actually
that if you donate to a 501c3, these donations are tax deductible, if they're charitable.
And I reckon with the electronic foundation and with the FSFF, with the FSFF, they would
all classify as general already.
This is something important for a C3.
These bodies are typically prohibited from supporting political candidates.
There's something called a Johnson amendment dating back to 1954 that exactly prevents
this or prohibits this.
So if it becomes too apparent that you are supporting political candidate, you could lose
or you could risk to lose your 501c3 status.
Meaning that you are allowable to taxes, and some other advantages, the C6s have to report
their political involvement as well in terms of money and so on.
Yes, but I reckon if you're running a trade organization, and C6 typically is such a
trade organization, you can do a certain amount of additional lobbying.
And specifically, more specifically, I mean, there's nothing in there.
The code that prevents a C3 from doing some subtle lobbying, I reckon, a bit of a question.
We're talking about donating to municipal campaigns, right?
Correct, yes, so yeah, that means supporting political candidates, exactly because that
was classified as a campaign money, in other words, exactly, yes.
So these are some of the main difference between a C3 and a C6.
So there's a few other ones as well, but please go ahead if people are listening, I don't
know who knows who knows.
So your C3 can't receive any grants, for example, where C6 can, they have to report any donations
over $5,000, whereas the C6 doesn't.
There's also a fund like that, Vinnie.
So one of the advice, if you want to launch a million bucks through your C3, you want to
split this up?
In many, many more times, I mean, it was like Bitcoin Summler, that sort of thing.
So that you are flying at the radar, and elegantly, I might add.
Okay.
What else?
Before we come to the Floss context, that we already touched upon.
Yes, churches, 401c3s, yes.
These typically also include religious bodies.
So Richard Amstormer, if you're listening, of course Richard Amstormer, being the Richard
Amstormer, also known as the Sending Nations of something called the Church of Emax.
Here you go.
Yes.
That's from the VR anyway.
Much, much, much, or a lot, let's put it this way.
Well, one of the things that it's not wrong with VR is that I think the Emax emulation
modes, excellent progress is being made.
So if the FSF wouldn't be classified as a 5 or 1c3, at least the Church of Emax could
go for this, from a theoretical perspective.
Well, Richard, what's our name?
Church of Emax.
It's essentially a church.
No, no, no, no.
What state are they?
What do you mean, what state are they?
Well, do they have a CC3 or CC3?
Not yet.
No, that's what I'm saying.
Richard, if you're listening, this is your way out.
They don't get any money items.
I'm bothered.
That's good.
Well, apparently, certain Mr. Sormen has joined the FSF board recently.
Again, yes, details, maybe in the show notes, but I'm not sure what happened afterwards.
And we touched upon this, by the way, during the FSF episode.
And for those few listeners who miss out on this, details are, of course, available
in our back catalogue.
So Martin, now it's probably the time, as good as any, to touch upon why this kind of
makes sense from a first perspective at all, especially if you happen to be a US resident
or want to set this up in the US.
Because if you're thinking about setting up the next software conservatory or setting
up the successor of the free software foundation or something like this, more than likely,
you are targeting the US because of money.
Well, you're not.
Yeah.
Well, I mean, yes, it's.
If you're not targeting the US, you can stop listening right now.
Yes.
If you target the US, please.
This one would be a really different number in each country for this kind of thing.
Exactly.
Exactly.
It's all probably fairly similar.
Yeah.
The thing is basically the point that that Martin, Mr. Sormen here, are making is you
want to choose your subcategory wisely in terms of if you are slanting towards civil
rights like the like the electoral electronic foundation or have more community aspects in
your focus.
The C3 is probably something you want to go for.
If you are more like a trade party representation, like an interesting body of some sort of this,
this is six.
It's the thing you want to go for.
From a first perspective.
So, yeah, if you have a few more ones to then, let's say educating people around open
source, then you'll be the C3 member for the first year.
Yes.
So for those of you who are still listening, you need to say any question, any questions?
We've free to send to feedback and it looks in-laws out of you.
What about legal?
Martin, if you haven't fired them, they may still be around.
Yeah.
Need to say we're not lawyers and Martin has fired again our legal department last week or
something.
We are not in position to give legal advice, but we will do our best to answer any of the
questions coming our way, given our limited capacity on the subject.
I mean, Jocelyn, this was meant to be a very short overview anyway.
Yeah.
Sorry, okay.
A bit of a finish right away.
No, I mean, given the fact that we're clocking in at what 30 minutes I reckon already or
28 or something.
Any poxies?
Any poxies?
Oh, yes.
Yes.
Yes.
What's it called?
Hang on.
What is it called?
What is it called?
Anyway, I'll tell you what it's about first, and I'll tell you the name.
Absolutely.
It's a channel four.
What is channel four?
Channel four.
I thought they went bankrupt about 10 years ago.
You just talked about the TV channel, are you?
Yes.
I thought they went bankrupt.
No, no, no, no.
What?
I'm serious.
I thought they're still around.
Amazing.
Oh, yeah.
Anyway, so I'll tell you the code.
I have a new series called The Underclared War.
The Underclared War.
Underclared War.
Okay.
Which is set in 2024, where GCHQ, that's in the British intelligence people, prevents
from cyber attacks and stuff, and that's by some foreign nations of unnamed origin.
And it's quite amusing, really, a few of which it's, but it's also quite, as a story is
quite, so.
Okay.
The technical details, probably, leave it with it to be desirous, but that's it.
It's quite nicely done, so.
Okay.
You can have a look.
Okay.
What's my poster, and they're with me?
I just have to dig up the English translation for this.
Ah.
Yeah.
It's a very, it's a famous German dish.
Tower crowd.
No.
My hat needs a rat first.
Far from it, actually.
A couple of.
Nice.
What else?
A couple four brothers in the south.
Right.
It's a form of something called in German, the Vietnam knurler.
How much?
For some reason.
Yeah.
Google made a failed attempt to call the napkin dumplings, but.
No, actually, I'm the American, someone working website actually calls itself yet in
knurler.
It's apparently.
It's a dumpling essentially.
Okay.
It's very tasty, especially if done with a mushroom sauce or mushroom.
And I came across this about the other week when I had to cook for a relation of
one.
You're not able to cook.
Details will not be in the show notes.
Um, but suffice it to say that.
I've taken over now the role of, of, of, of, of, of, of, of, almost professional chef.
And that capacity.
Okay.
Right.
So I'll show.
Expect some couple puffer and some.
Let me, let me, let me, let me dick up.
Oh, me.
The result.
Yes.
No joke.
The site.
We're talking about my mother and my mother.
A recent has for you.
The role model of a son that I am.
I said, in, of course, and with switch roles, now she's sitting at the table.
And I'm, and I'm cooking for her.
And this is the reason why I dug up this beautiful, devil-in-kind recipe.
Details will be in the show notes.
It's a, it's a, it's a down-to-earth germ specialty.
Essentially, you're looking at a dumpling made from old bread.
It's quite a few dumplings made of.
That's what you get in the room.
Yeah.
It's called semi-cneurid.
As a matter of fact, which literally translates into dump, dumpling made from bread.
And I topped this off with a sauce made with fresh mushrooms.
And some cream and some, and some spices and herbs.
And as usual, that was both, both our favorites are making.
So.
Yeah.
This is the reason why this is now no more, no, my pox of the week.
That's in the pox, pick off the week, exactly.
And as I said, recipes will be, or eat recipe with the show notes.
So that Martin can surprise me with those cooking skills.
When I'm visiting him next time.
Well, clearly you will be served with a British dish.
Oh, fucking dead.
I'm accompanied by lukewarm beer.
Oh dear.
No, Martin, that can't be.
Please, please go for your Dutch origins.
Okay, we don't have any feedback.
This is a, the email address is still the same.
Feedback is in those other you.
So if you have any feedback, we'll free free to send this address.
Be cool.
We haven't from heard from you in ages.
So if you're still listening for free, Luna, what's that name?
The dead being person.
We're still missing your feedback too.
Literally.
But any other people, free free to get in touch.
And with that, we would like to thank you for listening.
As usual, our hearts go out.
Oh yes, yes, it's very important.
People, HPR is about to redo the website.
Yes.
And they being in a problem source project.
They are looking for volunteers.
Details may have not been the show notes.
You find actually some of the core discussion on the HPR mailing list.
Hacker Public Radio in August here, go to source for this.
So if you know any data, Martin, you come from a database background, no?
The family says correct.
They are looking for more people.
Are they again?
Yes.
I already volunteered to do the API part.
So if you have some spare cycles and if you're looking for a very cool project to contribute to.
Check out the mailing list.
Simply subscribe to the Hacker Public Radio mailing list and stay tuned.
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And now can I didn't say and I didn't say podcast.
I simply say this is the important bit, right?
Jokes aside, HPR as usual, thank you.
This is the Linux in-laws.
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I have a quick fire 501 general knowledge question for me.
It's probably in server or something.
It's not implemented.
There you go.
Martin, you are the SMP expert.
So don't bother me with that stuff.
Okay, you got zero points so far.
Okay, what about every code 501 in the US which states is that?
Why did we all of a sudden switch to pop quizzes?
We were on the subject of final season.
Okay.
No, but what does final one mean in clinging?
That's true.
I think it's too late, which is that the speed on by the girls or something.
But go ahead.
Okay.
If someone says 501 to you, what's the the first thing that you associated with?
501 dollars.
It's worth $101.
Buies your cup of coffee.
Current inflation.
It's going.
Yeah.
Now, I mean, it could be also something.
If you're planning on your upbringing or context.
So if you were to live in Arkansas, Arkansas,
it would be a phone number.
If you were found.
Yeah, if you were a fan of dots, that would be a dark answer for you.
Like jeans will be Levi's right.
So in a few or into it.
It should be a centipede would be some error codes.
Levi's if you're listening.
That's right.
That's right.
That's right.
That's right.
That's right.
That's right.
That's right.
That's right.
That's right.
That's right.
That of course reveals the fact that Martin is almost as old as I am.
Because 501's were popular in the seventies.
That's right.
Yeah.
That was the 500.
The 501 is actually not always from the mind.
Really?
Okay.
So they went backwards in numbers.
I guess I did that.
Okay.
People you heard in first Martin is officially not older than I am.
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