3 ms·

Nonprofits have to do that if they engage in commercial activity for tax reasons. You can't just group whatever activities you want under a nonprofit and make a

Nonprofits have to do that if they engage in commercial activity for tax reasons. You can't just group whatever activities you want under a nonprofit and make all that money tax free. OpenAI had to split it off as a for-profit once they had a product to sell to the public. The nonprofit didn't "turn into" a for-profit, the nonprofit owns the corporation. Mozilla has the same structure with a for-profit corporation owned by the nonprofit, which allows it to take Google's money in exchange for default search engine placement. Likewise with Wikipedia/Wikimedia, Newman's Own, and so on.

llm_trw 2y ago
You absolutely can. You just can't distribute the results as dividends.
- throwup238 2y ago
  No, you absolutely can't. Nonprofits can't engage in substantial business activities that are unrelated to their mission. If they do, they can lose their non-profit status. https://www.irs.gov/pub/irs-pdf/p598.pdf https://www.irs.gov/pub/irs-pdf/p598.pdf https://www.thetaxadviser.com/issues/2021/jun/unrelated-business-activity-substantial-tax-exempt-organizations.html https://www.thetaxadviser.com/issues/2021/jun/unrelated-busi...
  - llm_trw 2y ago
    I'm trying to wrap my head around your point and having a real hard time understanding what the problem is. Yes, openai can't be a butcher, a baker, or a candlestick maker. This is a feature not a bug.
    - throwup238 2y ago
      The problem is that you don't understand how tax exemption works? According to the OpenAI charter, their mission is to "ensure that artificial general intelligence benefits all of humanity." That's their legally binding mission - not selling cloud services by the token or licensing their models to companies like Microsoft and Apple. Any lawyer with half a brain would have advised them that those activities would almost certainly be found by the IRS and the courts to be unrelated business activities, so they spun them off as a for-profit corporation instead of taking an entirely unnecessary risk. Just because their product is vaguely AGI related doesn't mean it has anything to do with their actual mission.
      - llm_trw 2y ago
        I've ran a not for profit worth ~$100m. All of those things are ones which fall within the original charter of openai. It's only when you start doing completely unrelated activities, like Mozilla's women who code, or you start raiding the coffers of the organization, like Wikipedia, that you need fancy structures to hide the blatant theft.
        throwup238 2y ago
        > I've ran a not for profit worth ~$100m. Based on this thread I find that incredibly hard to believe. Incredibly. > It's only when you start doing completely unrelated activities, like Mozilla's women who code Or like... Mozilla Firefox. Cause that's why they've had Mozilla Corporation since 2005. Google pays the corporation for default search engine placement and all of the full time Firefox developers I've ever known have worked for the corporation, not the nonprofit.
        llm_trw 2y ago
        >Based on this thread I find that incredibly hard to believe. Incredibly. It doesn't take much more than showing up and taking responsibility when no one else does. >Or like... Mozilla Firefox. Cause that's why they've had Mozilla Corporation since 2005. Yes, because Mozilla has always wanted to do more than be a browser company. Remember Firefox OS? Not for profits who have weird structures are there to make sure they can be looted for the benefit of the people running them, or to be used for pet projects that have nothing to do with the original charter.
        agolio 2y ago
        > It doesn't take much more than showing up and taking responsibility when no one else does. Your argument aside, I am interested to hear you found it straightforward to run a successful non-profit. Any tips for someone who is interested to enter that space?
        2y ago
mr_toad 2y ago
> the nonprofit owns the corporation They only own about 2% of it. The rest is split between Microsoft and other investors.
- deleted 2y ago
  [deleted]
- dragonwriter 2y ago
  The nonprofit has 100% control of the for-profit entity, though it does not have 100% of equity.
  - indoordin0saur 2y ago
    Even so, it doesn't matter. Controlling board has been replaced by cronies who have no interest in the original altruistic purpose of the company, whether they call themselves not-for-profit or not.
  - mr_toad 2y ago
    The have 100% de jure control and 0% de facto control.

llm_trw 2y ago

You absolutely can. You just can't distribute the results as dividends.

throwup238 2y ago
No, you absolutely can't. Nonprofits can't engage in substantial business activities that are unrelated to their mission. If they do, they can lose their non-profit status. https://www.irs.gov/pub/irs-pdf/p598.pdf https://www.irs.gov/pub/irs-pdf/p598.pdf https://www.thetaxadviser.com/issues/2021/jun/unrelated-business-activity-substantial-tax-exempt-organizations.html https://www.thetaxadviser.com/issues/2021/jun/unrelated-busi...
- llm_trw 2y ago
  I'm trying to wrap my head around your point and having a real hard time understanding what the problem is. Yes, openai can't be a butcher, a baker, or a candlestick maker. This is a feature not a bug.
  - throwup238 2y ago
    The problem is that you don't understand how tax exemption works? According to the OpenAI charter, their mission is to "ensure that artificial general intelligence benefits all of humanity." That's their legally binding mission - not selling cloud services by the token or licensing their models to companies like Microsoft and Apple. Any lawyer with half a brain would have advised them that those activities would almost certainly be found by the IRS and the courts to be unrelated business activities, so they spun them off as a for-profit corporation instead of taking an entirely unnecessary risk. Just because their product is vaguely AGI related doesn't mean it has anything to do with their actual mission.
    - llm_trw 2y ago
      I've ran a not for profit worth ~$100m. All of those things are ones which fall within the original charter of openai. It's only when you start doing completely unrelated activities, like Mozilla's women who code, or you start raiding the coffers of the organization, like Wikipedia, that you need fancy structures to hide the blatant theft.
      - throwup238 2y ago
        > I've ran a not for profit worth ~$100m. Based on this thread I find that incredibly hard to believe. Incredibly. > It's only when you start doing completely unrelated activities, like Mozilla's women who code Or like... Mozilla Firefox. Cause that's why they've had Mozilla Corporation since 2005. Google pays the corporation for default search engine placement and all of the full time Firefox developers I've ever known have worked for the corporation, not the nonprofit.
        llm_trw 2y ago
        >Based on this thread I find that incredibly hard to believe. Incredibly. It doesn't take much more than showing up and taking responsibility when no one else does. >Or like... Mozilla Firefox. Cause that's why they've had Mozilla Corporation since 2005. Yes, because Mozilla has always wanted to do more than be a browser company. Remember Firefox OS? Not for profits who have weird structures are there to make sure they can be looted for the benefit of the people running them, or to be used for pet projects that have nothing to do with the original charter.
        agolio 2y ago
        > It doesn't take much more than showing up and taking responsibility when no one else does. Your argument aside, I am interested to hear you found it straightforward to run a successful non-profit. Any tips for someone who is interested to enter that space?
        2y ago

mr_toad 2y ago

> the nonprofit owns the corporation They only own about 2% of it. The rest is split between Microsoft and other investors.

deleted 2y ago
[deleted]
dragonwriter 2y ago
The nonprofit has 100% control of the for-profit entity, though it does not have 100% of equity.
- indoordin0saur 2y ago
  Even so, it doesn't matter. Controlling board has been replaced by cronies who have no interest in the original altruistic purpose of the company, whether they call themselves not-for-profit or not.
- mr_toad 2y ago
  The have 100% de jure control and 0% de facto control.