4 ms·

(In some cases a donation button may be better) If you are not a charity, do not call it a donation. Call it a tip.

jlokier 5y ago
Fun fact: Tips are subject to income tax, donations are not. That may be relevant to people seriously monetizing their hobbies. (Whether something is, for tax purposes, a tip or a donation is determined by the reason the money is given, not what you call it, but if it's truly a donation then I'd be inclined to call it one just in case that influences some judgement further down the line.)
- DoreenMichele 5y ago
  Years ago, PayPal had donate buttons and my recollection is there was text somewhere on the site indicating that if you hit $10k in donations, they would want a copy of your 501c3 or some such. It's one of the reasons I stopped using donate buttons. These days, there are other monetization products but I'm not sure the IRS would approve of you calling it whatever you want for reasons of avoiding taxes.
WJW 5y ago
Is there some legal distinction? Getting money with the expectation that it will be used to further some vaguely defined public good you are doing (writing freely available software in this case) sounds exactly like a charity, especially since you will be doing most of the public good regardless of whether you get the donation or not. A tip on the other hand is an additional payment for some good or service that you were already paying for, but that is not the case for most software projects.
- DoreenMichele 5y ago
  I'm a blogger, not a programmer. I don't make near enough money from it but calling it a tip instead of a donation has performed better. Tip signals "payment for my work." Donation signals "gift." People seem to be more inclined to actually fork over a few bucks if you signal "This is my work. I deserve to be paid for it." than if you signal "I would like gifts (or charity) from random internet strangers."
  - WJW 5y ago
    Interesting, thanks for the explanation!

Fun fact: Tips are subject to income tax, donations are not. That may be relevant to people seriously monetizing their hobbies. (Whether something is, for tax purposes, a tip or a donation is determined by the reason the money is given, not what you call it, but if it's truly a donation then I'd be inclined to call it one just in case that influences some judgement further down the line.)

DoreenMichele 5y ago
Years ago, PayPal had donate buttons and my recollection is there was text somewhere on the site indicating that if you hit $10k in donations, they would want a copy of your 501c3 or some such. It's one of the reasons I stopped using donate buttons. These days, there are other monetization products but I'm not sure the IRS would approve of you calling it whatever you want for reasons of avoiding taxes.

WJW 5y ago

Is there some legal distinction? Getting money with the expectation that it will be used to further some vaguely defined public good you are doing (writing freely available software in this case) sounds exactly like a charity, especially since you will be doing most of the public good regardless of whether you get the donation or not. A tip on the other hand is an additional payment for some good or service that you were already paying for, but that is not the case for most software projects.

DoreenMichele 5y ago
I'm a blogger, not a programmer. I don't make near enough money from it but calling it a tip instead of a donation has performed better. Tip signals "payment for my work." Donation signals "gift." People seem to be more inclined to actually fork over a few bucks if you signal "This is my work. I deserve to be paid for it." than if you signal "I would like gifts (or charity) from random internet strangers."
- WJW 5y ago
  Interesting, thanks for the explanation!