Re: Not a good idea (was Re: [Flightgear-devel] Advertisements on the FG web site?)
David Megginson said: So, in the end, my advice is not to do it. If you want to make a living or partial living from FlightGear, set up a separate commercial site and be prepared to learn about CRM, tax laws, incorporation laws, legal fees, insurance, NDA's, contracts, and all the other fun that comes with running your own small business. Well...hmm. This is a little pessimistic in tone. Non-profit can be handled with reasonable ease, at least in the US. Find someone who will set it up for a reasonable fee (free if possible), get a cost for registering and solicit contributions to do so. It isn't that bad. However, before doing this, I would consider what is really required here. You see, at least on the federal level you can collect quite a large sum of money as gifts before you have to put anything on your tax return. Even if Curt, or someone handling the money, did have to file a Schedule C (which is generally a no brainer for something like this) all he'd have to do is make sure the money got spent to avoid liability. The main reason for registering as a non-profit is to offer your contributors a way to take deductions off of their taxes. The second reason comes into play if employees are hired. That would be down the road a bit, I would guess. So in a nutshell my advice is: (1) Think about the project image issue. (2) Don't be afraid of small business. People do it every day. It doesn't have to be complex or commercial. Best, Jim P.S. Note, I am not a CPA or a lawyer, but I've been intimately involved in starting up corporations (one was my own) and have filed a few schedule C forms over the years. Talk to a CPA who understands that you want to keep it simple. Generally speaking business lawyers don't know what keep it simple means (or rather they recognize that simple != legal fees). ___ Flightgear-devel mailing list [EMAIL PROTECTED] http://mail.flightgear.org/mailman/listinfo/flightgear-devel
Re: Not a good idea (was Re: [Flightgear-devel] Advertisements on the FG web site?)
Jim Wilson wrote: You see, at least on the federal level you can collect quite a large sum of money as gifts before you have to put anything on your tax return. I am not intimately familiar with U.S. tax laws, but I would be very surprised if the IRS allowed Curt to count advertising revenue as a gift. I will admit that I do not know what the case would be for voluntary donations, so a PayPal donation button might be an OK choice. So in a nutshell my advice is: (1) Think about the project image issue. (2) Don't be afraid of small business. People do it every day. It doesn't have to be complex or commercial. The overhead is not horrible, but it's important not to underestimate it -- you'll be hard-pressed to find any small business owner who was not surprised by the amount of non-billable work involved and dismayed by the number of regs to learn (and I understand that the U.S. is much worse than Canada in this regard). I've set up three corporations and have been running my own small business since 1998, and the extra time required is by no means a full-time or even half-time job, but it is there. I've never done anything disasterous, but I did have to write off USD 18K in accounts receivable from a customer that went bankrupt, and I lost another USD 9K to the government early on because of tax laws I didn't fully understand yet (I wrote myself a bonus cheque a couple of months later than I was supposed to, and ended up with a mini-audit from the province of Ontario and USD 1.5K in accounting fees on top of the tax penalty). I don't regret going into business for myself, but it's a big commitment, not a side project. If someone already has too little time available, as is Curt's problem, spending even more time managing customer relationships, sending out invoices, chasing down bad accounts, filling in tax forms, etc. might not be the best choice, especially if the potential revenue is (as I suspect) a couple of thousand dollars per year at best. P.S. Note, I am not a CPA or a lawyer, but I've been intimately involved in starting up corporations (one was my own) and have filed a few schedule C forms over the years. Talk to a CPA who understands that you want to keep it simple. Generally speaking business lawyers don't know what keep it simple means (or rather they recognize that simple != legal fees). The problem is that the CPA's fee alone will probably represent a significant percentage of the potential annual revenue. All the best, David ___ Flightgear-devel mailing list [EMAIL PROTECTED] http://mail.flightgear.org/mailman/listinfo/flightgear-devel
Re: Not a good idea (was Re: [Flightgear-devel] Advertisements on the FG web site?)
David Megginson said: Jim Wilson wrote: You see, at least on the federal level you can collect quite a large sum of money as gifts before you have to put anything on your tax return. I am not intimately familiar with U.S. tax laws, but I would be very surprised if the IRS allowed Curt to count advertising revenue as a gift. I will admit that I do not know what the case would be for voluntary donations, so a PayPal donation button might be an OK choice. So in a nutshell my advice is: (1) Think about the project image issue. (2) Don't be afraid of small business. People do it every day. It doesn't have to be complex or commercial. The overhead is not horrible, but it's important not to underestimate it -- you'll be hard-pressed to find any small business owner who was not surprised by the amount of non-billable work involved and dismayed by the number of regs to learn (and I understand that the U.S. is much worse than Canada in this regard). I've set up three corporations and have been running my own small business since 1998, and the extra time required is by no means a full-time or even half-time job, but it is there. I've never done anything disasterous, but I did have to write off USD 18K in accounts receivable from a customer that went bankrupt, and I lost another USD 9K to the government early on because of tax laws I didn't fully understand yet (I wrote myself a bonus cheque a couple of months later than I was supposed to, and ended up with a mini-audit from the province of Ontario and USD 1.5K in accounting fees on top of the tax penalty). I don't regret going into business for myself, but it's a big commitment, not a side project. If someone already has too little time available, as is Curt's problem, spending even more time managing customer relationships, sending out invoices, chasing down bad accounts, filling in tax forms, etc. might not be the best choice, especially if the potential revenue is (as I suspect) a couple of thousand dollars per year at best. P.S. Note, I am not a CPA or a lawyer, but I've been intimately involved in starting up corporations (one was my own) and have filed a few schedule C forms over the years. Talk to a CPA who understands that you want to keep it simple. Generally speaking business lawyers don't know what keep it simple means (or rather they recognize that simple != legal fees). The problem is that the CPA's fee alone will probably represent a significant percentage of the potential annual revenue. I'm not disagreeing with you, but collecting a few donations from PayPal shouldn't require anything. That's the point. If (only if) it is required, a simple schedule C is routine for little things on the side and usually takes about 15 minutes to complete. Probably a million or more get filed in the US every year. There's even a short form version that covers most side hobby type things. Maybe I've missed something in this thread, I am not talking about a consulting business with customers, time billing, etc. Such a business is just exactly as you describe, except maybe for folks that just do a little moonlighting in the local neighborhood. Yes, schedule C would probably be required for advertizing revenues (if the proceeds are above the annual minimum which has got to be at least $500). That's why I mentioned it earlier. FWIW I'm not keen on the ad idea either. I don't think it would produce much anyway. As far as the CPA is concerned, of course they charge a good fee for their time if you ask them to structure a business or do a plan, financial statements, returns, etc. There are at least a couple in town here who will answer a simple question they don't have to research like how much can I collect in donations before filing a schedule C (just don't make the call during tax season :-)). For that matter the IRS 800 number offers the same info and probably the website does too. Best, Jim ___ Flightgear-devel mailing list [EMAIL PROTECTED] http://mail.flightgear.org/mailman/listinfo/flightgear-devel
Re: Not a good idea (was Re: [Flightgear-devel] Advertisements on the FG web site?)
Jim Wilson wrote: Maybe I've missed something in this thread, I am not talking about a consulting business with customers, time billing, etc. The thread started with Curt posting asking for opinions about running banner ads on flightgear.org to raise revenue. He also indicated that he'd be dealing with the initial customer directly rather than through a distributed advertising plan like Google text ads, and others chimed in suggesting how he should screen advertisers, ensure that their hardware works with FlightGear, etc. I mentioned a PayPal donations button as a better alternative, though I still had concerns about tax issues (which you indicate shouldn't be a problem for small donations). FWIW I'm not keen on the ad idea either. I don't think it would produce much anyway. As I suggested, it would produce a lot of work for little benefit, especially if Curt ends up managing customer relationships with advertisers one-on-one (much less doing all the screening that people want him to do). For that matter the IRS 800 number offers the same info and probably the website does too. As I mentioned earlier in the thread, I have no problem with a donations button as long as it causes no tax problems for Curt. It is worth noting a formal PayPal donations account does leave a (virtual) paper trail and the tax auditors like to hike along that kind of trail, so it would be good to check with people who know. I don't know U.S. professional fees that well, but I'd guess that a full audit would leave a person at least USD 5K-10K poorer just in accounting and/or legal fees, even if the auditors do not end up finding anything wrong. All the best, David ___ Flightgear-devel mailing list [EMAIL PROTECTED] http://mail.flightgear.org/mailman/listinfo/flightgear-devel
Re: Not a good idea (was Re: [Flightgear-devel] Advertisements on the FG web site?)
David Megginson said: check with people who know. I don't know U.S. professional fees that well, but I'd guess that a full audit would leave a person at least USD 5K-10K poorer just in accounting and/or legal fees, even if the auditors do not end up finding anything wrong. Well...not with a Schedule C-EZ ;-) Despite the odd and usually unconfirmed horror story, the IRS is actually quite fair and reasonable. Professional fees should always be proportional to the sums at risk. Otherwise you are wasting time and money and so is the IRS. Best, Jim ___ Flightgear-devel mailing list [EMAIL PROTECTED] http://mail.flightgear.org/mailman/listinfo/flightgear-devel
Re: Not a good idea (was Re: [Flightgear-devel] Advertisements on the FG web site?)
On Friday 16 July 2004 23:45, David Megginson wrote: Curtis L. Olson wrote: But any way you cut it, putting advertisements on our web site will change the look and feel of our web site and probably influence the impression our project projects to the world ... Yes, it will make a significant difference to FlightGear and a lot of extra hassle for Curt. We'll look less like a friendly, volunteer Open Source project and more like a corporate Open Source startup. That may significantly change the kinds of volunteers we attract and the way we're treated by conference organizers and the press, as well as users' expectations of code stability, support, etc. People don't volunteer to help with corporate OSS projects like JBoss the same way that they contribute to, say, Mozilla, Apache, Linux, or FlightGear (and even JBoss doesn't have ads on its site, I don't think). It's hard to find any really friendly OSS projects with wide participation *and* ads on their site. When I was paying to keep the main SAX site at megginson.com and getting many thousands of hits each day, I was also briefly tempted to run ads to help cover expenses, but I realized that doing so would have changed the way people saw and used SAX. I'd suggest trying some different approaches: 1. Set up a PayPal voluntary donation button on FlightGear.org -- no one will mind that (but see tax issues below). 2. If you cannot cover expenses with the voluntary donations, set up a separate *.com site (flightgear.com was already taken, last I checked). You can use it to distribute extra information, set up forums, etc., and perhaps you can run ads and offer consulting services through it. 3. If you absolutely *must* run ads on flightgear.org, please use Google text ads and not banner ads. That last point is important. Managing an advertising account is a tricky job, and not one that you want to do on top of everything else. With Google ads, you know you'll get paid and you don't have to worry about the advertisers. Another important point is tax. FlightGear is not a legal not-for-profit organization, so I think that any ad revenue that comes in will have to go onto Curt's tax return, and he'll end up paying a big chunk of it to the government. The same is true for a PayPal donation button. So, in the end, my advice is not to do it. If you want to make a living or partial living from FlightGear, set up a separate commercial site and be prepared to learn about CRM, tax laws, incorporation laws, legal fees, insurance, NDA's, contracts, and all the other fun that comes with running your own small business. If you just want to cover expenses, try posting to the list with a subject line like Need new $500 hard drive, and I'm sure that a lot of us will be willing to pitch in. All the best, David These are good points. Glad it's not my call. LeeE ___ Flightgear-devel mailing list [EMAIL PROTECTED] http://mail.flightgear.org/mailman/listinfo/flightgear-devel
Re: Not a good idea (was Re: [Flightgear-devel] Advertisements on the FG web site?)
On Fri, 16 Jul 2004 23:53:51 +0100, Lee wrote in message [EMAIL PROTECTED]: On Friday 16 July 2004 23:45, David Megginson wrote: ...wisdom omitted... These are good points. Glad it's not my call. ..amen. ..they want banner ads, they ship us free hardware and pay us to write GPL drivers etc for it. No free hardware etc, no deal, there's more fish out there. ;-) ..I mean, there else do they go? ;-) We _can_ ask this much. -- ..med vennlig hilsen = with Kind Regards from Arnt... ;-) ...with a number of polar bear hunters in his ancestry... Scenarios always come in sets of three: best case, worst case, and just in case. ___ Flightgear-devel mailing list [EMAIL PROTECTED] http://mail.flightgear.org/mailman/listinfo/flightgear-devel
