I want to make a non profit organization for Eternal Lands, because AFAIK Non Profit Organizations don't have to pay taxes and such. Since other free software such as Mozilla and Gentoo have this status, I guess we can get it too. But does anyone here know more about it, such as what are the requirements, how much it cost, etc? I realize that this might be better off in the Business of game development forum, but there are not so many people that post there, and this is not a business per se.

Law About Non-Profit Organizations

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Non-profit organizations must be designated as nonprofit when created and may only pursue purposes permitted by statutes for non-profit organizations. ... For federal tax purposes, an organization is exempt from taxation if it is organized and operated exclusively for religious, charitable, scientific, public safety, literary, educational, prevention of cruelty to children or animals, and/or to develop national or international sports.

Emphases mine.

I would suggest talking to a tax accountant that specializes in non-profits.

Quote:

Original post by Oluseyi Law About Non-Profit Organizations Quote: Non-profit organizations must be designated as nonprofit when created and may only pursue purposes permitted by statutes for non-profit organizations. ... For federal tax purposes, an organization is exempt from taxation if it is organized and operated exclusively for religious, charitable, scientific, public safety, literary, educational, prevention of cruelty to children or animals, and/or to develop national or international sports. Emphases mine.

So then what is the Mozilla Foundation? I mean, in which category they fit?

@LessBread I will, eventually, but I don't know any, and we are not ready for it yet. Just wanted to see if it is possible first, and some additional data.

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Original post by Raduprv So then what is the Mozilla Foundation? I mean, in which category they fit?

Actually the part he quoted related to tax exemption, rather than being a list of non-profit organisations. The list of possible non-profits includes:

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Non-profit organizations include churches, public schools, public charities, public clinics and hospitals, political organizations, legal aid societies, volunteer services organizations, labor unions, professional associations, research institutes, museums, and some governmental agencies.

The Moz foundation would likely come under volunteer services or professional associations or even a charity (producing and distributing free software to everyone).

Non-profit orgs are NOT simply companies that don't pay tax. The government might be dumb but they aren't dumb enough to simply allow a business to operate normally and pay no tax - If you want to do that you have to hire expensive tax lawyers ;)

1. Non-profit laws vary from state to state and country to country so you need to talk to a local lawyer.
2. If you set up a non-profit org it will be very hard for you to get any money from your game in the future so forget it if you hope to make a living from this business.
3. A non-profit org needs to have a purpose (such as promoting sport, acting as a professional association, or undertaking charitable activity) and once set up it will be very hard to change that to a normal business from which you make money.
4. There are also very strict rules on setting up and running the org. You need an elected board of directors (who are replaced at regular intervals) and you need to keep proper accounts and run the org as per the requirements under which it is set-up.

If you actually want to make free MMOGs for everyone to play then go ahead and research non-profit orgs. If what you really want is to some day make money from the venture (or simply run a business without paying tax) then don't bother. That simply isn't what a non-profit is about.

Hmm, ok, thanks for the info.
The board of directors and such doesn't seem like it's a good idea (for us) :)