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Is Free Republic a commercial operation or a charity?
Free Republic | 12/08/01 | Jim Robinson

Posted on 12/08/2001 12:25:12 AM PST by Jim Robinson

Is Free Republic a commercial operation or a charity?

Well, here's the way I see it. Free Republic is neither a charity or a commercial operation. It is simply a website. A public political bulletin board, just like thousands upon thousands of other non-commercial, not for profit, public political bulletin boards, only larger.

Our participants post and discuss political topics, government topics, constitutional issues, current events and other miscellaneous topics. I operate it as an avocation (a hobby). I was sued by a couple major media players, so I filed as an LLC to gain at least a small amount of liability protection in case others want to jump on after the LAT/WP or in case some wild-eyed poster comes in and posts a bunch of crap that brings lawsuits my way.

In the beginning, I paid all of the expenses of operating the website out of my own pocket. But as it grew and the expenses grew, and I went broke, I could no longer afford the bills. Free Republic has tens of thousands of participants and is steadily growing. Because we are posting under the fair use provisions of copyright law, I cannot charge a membership fee, I cannot sell merchandise, I cannot sell advertising, and I cannot enter into any commercial business. I simply cannot earn money on Free Republic as a commercial operation.

And, because of the fact that we advocate various political positions and even support (by arguing for or against) various political candidates and or conservative issues or causes, I cannot qualify as a public benefit non-profit charity (501C, etc.).

Because I have no personal capital or resources, and I cannot seek outside investors or capital (that might be construed as being commercial), and I cannot charge for services or products (that may also be construed as being commercial), I'm pretty much stuck with the choice of folding up the public political discussion board (thus depriving myself and thousands of others this obviously effective and established opportunity of exercising our first amendment rights to political free speech), or allowing others to voluntarily donate money as gifts to pay the expenses. There is not much room to do anything else.

All we (our participants) want to do, both as individuals and as a group, is to be able to exercise our first amendment rights to criticize the illegally expanding government and its chief advocate, the mainstream media. This is our right under the Constitution. And we do this by posting news articles and other public information to use as a base of comparison and basis for for critique and political discussion.

Because we cannot be commercial and we cannot be a public charity and I do not have the financial wherewithal myself to fund it, the readers and participants willingly chip in to keep the website going. There is no way this giving is commercial and there is no way that it is a public benefit charity. It is simply a relatively small number of the total readers and participants willingly taking it upon themselves to gift money to Free Republic to keep the discussion board from going broke. No one is forced to contribute to Free Republic and, in fact, the vast majority do not. No price or fee is charged to anyone to read Free Republic or to participate in the discussion. It is totally free.

We do not engage in commerce. We do not sell anything. We do not have customers. We do not have subscribers. We do not have a paid membership. We do not have investors. We do not purchase anything, other than bandwidth and equipment to keep the discussion board operating. There is no inventory, no manufacturing, no sales, no services rendered, no investors, no stockholders, no board of directors, no outsiders, no sales people, no employees, no payroll, no payroll expenses, no payroll taxes, no employee benefits, no nothing. There is no commercial business taking place here. There is nothing commercial about Free Republic.

A commercial operation would be doing some kind of business. It would have a price list or rate book and or a catalog or product sheet or a description of product or service or some other communications vehicle that would allow potential customers or clients or subscribers or members or investors or whomever to see what is offered, what he is purchasing, and how much he would have to pay for it, and how it compares to the competition. There is no proposal or sales order or contract or agreement that describes a product or service to be delivered for a fee or a price and there are no contractual documents or agreements between buyer and seller describing how money or goods or services are to change hands. There are no guarantees or warrantees for fitness or suitability. Nothing. No commercial business is transacted.

Free Republic is not a commercial operation, period.

So, then, is it a public benefit charity?

Free Republic does not fit within the definition of a public benefit charity or professional fundraising operation. Participants willingly give to keep the lights on and the board operating, but Free Republic is not a registered public benefit charity or church or any other such operation. It is not a 501C non-profit organization, in fact, because it engages in politics and supports and promotes various conservative political issues and causes, it cannot qualify as a public benefit charity.

Free Republic's legal and tax status is a California Limited Liability Company filing with the IRS on form 1065. The excess of receipts over expenditures for an LLC, such as Free Republic, LLC, flows back to the members (mainly me in this case) and is reported as income on our personal tax returns.

There is no money paid out to outsiders or investors or charity seekers or beneficiaries. We do not raise funds to be used for public benefit. We do not raise funds to be given to others. We do not take on charitable causes. We do not offer charitable services.

The gifts we receive are not charitable giving in the sense of a 501C or other state or federal chartered public benefit charity. There are no beneficiaries. We are not a church, not a hospital, not a foundation, not a trust, not a fund, not a school, not a library. not a public benefit corporation and we are not tax exempt. The givers do not receive a tax deduction for their gifts. There are no strings attached in exchange for the gifts. Once the gift is given the giver no longer controls the gift. We have no financial or fiduciary duty to the giver.

We are simply not subject to the corporate charity or public benefit laws of the various states and we are not a public benefit charity.

Is it a tax exempt operation?

No. We pay taxes on the excess of gifts received over funds paid out, because we have to in order to comply with the IRS regulations for hobbies, but that does not make us a commercial business. Again, we do not manufacture, purchase for resell, or provide a service in return for pay. We do not sell memberships, or advertising or anything else. We do not operate a business. Any cash received is received as gifts. The givers are not promised anything in return nor do they receive anything. No one must give to use Free Republic. The website is free to all participants. It is simply a public political discussion forum that I operate as an avocation and people are willing to freely give in order to keep it alive and on the air, because they love it.

What is Free Republic then?

So, Free Republic is not a commercial operation nor is it a charity. What is it then? It is simply what it is, a non-commercial, not for profit public (decidely for conservatives) electronic townhall meeting and bulletin board discussion forum operated as an avocation with its expenses paid for in the form of taxable gifts from some of its fans because they love it, and they do not want it to die.


TOPICS:
KEYWORDS: adminlectureseries; faq; fr
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To: mafree; Jim Robinson
Bump!!
81 posted on 12/09/2001 11:03:55 AM PST by EdReform
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To: EdReform
Bump!
82 posted on 12/10/2001 7:10:57 AM PST by Valin
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To: Valin
Bump!
83 posted on 12/10/2001 7:18:00 AM PST by EdReform
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To: Jim Robinson

Thank you for FR and God bless you.


84 posted on 10/28/2007 1:27:52 PM PDT by processing please hold (Duncan Hunter '08) (ROP and Open Borders-a terrorist marriage and hell's coming with them)
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To: 68-69TonkinGulfYachtClub
How did you post using Tonks handle?

I see it was one of his statements from way back.

85 posted on 10/28/2007 1:31:41 PM PDT by processing please hold (Duncan Hunter '08) (ROP and Open Borders-a terrorist marriage and hell's coming with them)
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To: processing please hold

Forget it. I need a nap.


86 posted on 10/28/2007 1:32:48 PM PDT by processing please hold (Duncan Hunter '08) (ROP and Open Borders-a terrorist marriage and hell's coming with them)
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To: Jim Robinson

“Is Free Republic a commercial operation or a charity?”

Or a state of mind?


87 posted on 10/28/2007 1:32:57 PM PDT by Grunthor (Christmas is a time when people of all religions come together to worship Jesus Christ.)
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To: Jim Robinson

God Bless you Jim Robinson. Your efforts on behalf of the un-born are outstanding.


88 posted on 10/28/2007 1:33:21 PM PDT by ex-snook ("Above all things, truth beareth away the victory.")
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To: brat

Let’s go ahead and give credence to the bear and the tree. Yes it’s real.


89 posted on 10/28/2007 1:36:10 PM PDT by eyedigress ( Questions are tough for a reason, either you're a liar or your math sucks.)
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To: Jim Robinson
I guess this was reposted due to questions after the last FAT.

It is true that you (Jim) don’t run FR with mind toward maximizing your income potential but just raise enough money to pay your bills, but for all other legal and practical considerations you are a for profit CA corporation.

There is no such thing as “not for profit” company. In regards to your exposure to a legal issues such as copyright infringement you will be treated almost the same as if you took advantage of every financial opportunity at your disposal (I say almost the same since you don’t have any assets to go after that may cause a potential plaintiff think twice or may be a mitigating factor in punitive damages). Income is income and it makes no difference whether that income is derived from sales, memberships or donations. It also would make no difference in determining if FR derived income from posting full sourced articles.

I’m not saying this to be negative but only to caution everyone about thinking that because FR operates as a “not for profit” for profit corporation that it gives it any legal leeway in how it needs to operate as a CA corporation. The courts will make no such distinction.

90 posted on 10/28/2007 1:36:40 PM PDT by Bob J (“For every 1000 hacking at the branches of evil, there is one striking at it’s root.”)
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To: processing please hold

:^)


91 posted on 10/28/2007 1:38:44 PM PDT by eyedigress ( Questions are tough for a reason, either you're a liar or your math sucks.)
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To: Bob J

I would hope that everyone understands that WE are the charity that recieves from FR. :^)


92 posted on 10/28/2007 1:41:32 PM PDT by eyedigress ( Questions are tough for a reason, either you're a liar or your math sucks.)
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To: Bob J
I guess this was reposted due to questions after the last FAT.

What's a FAT?

93 posted on 10/28/2007 1:41:52 PM PDT by Glenn (Free Venezuela!)
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To: Glenn

FReep a thon.


94 posted on 10/28/2007 1:43:58 PM PDT by Bob J (“For every 1000 hacking at the branches of evil, there is one striking at it’s root.”)
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To: Glenn

Cue the Ted Kennedy picuture.

(Just kidding! Don’t do it!)


95 posted on 10/28/2007 1:47:01 PM PDT by Larry Lucido (Hunter 2008)
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To: Bob J

I guess this was reposted


Why do you assume it was a repost?..... It looks to me like it was a bump of an old thread that has been dormant since 12/10/2001 until the poster in #84 bumped it back into the lastest comments segment....


96 posted on 10/28/2007 1:49:57 PM PDT by deport (>>>--Iowa Caucuses .. 70 days and counting--<<< [ Meanwhile:-- Cue Spooky Music--])
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To: eyedigress

“I would hope that everyone understands that WE are the charity that recieves from FR. :^)”

Which is true of all the people who have never supported FR financially. Unfortunately, that makes up about 99% of readers and participants.

There is some understanding about this. Like TV, most people expect to get their internet entertainment for free and figure the providers are making it upon advertising, etc.


97 posted on 10/28/2007 1:49:59 PM PDT by Bob J (“For every 1000 hacking at the branches of evil, there is one striking at it’s root.”)
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To: Larry Lucido
Thanks for the Memories LOL


98 posted on 10/28/2007 1:50:31 PM PDT by eyedigress ( Questions are tough for a reason, either you're a liar or your math sucks.)
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To: Bob J

Don’t put me in that group, thank you very much. :^)


99 posted on 10/28/2007 1:51:52 PM PDT by eyedigress ( Questions are tough for a reason, either you're a liar or your math sucks.)
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To: deport

I’m not sure why this is important to you, but this thread was put in a sidebar box which I assumed required an effort by Jim or a moderator.


100 posted on 10/28/2007 1:52:33 PM PDT by Bob J (“For every 1000 hacking at the branches of evil, there is one striking at it’s root.”)
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