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Comment by Molitor5901 | Hacker News Reader

The fact he is using Wordpress.org would seem to be a clear violation of its 501(c)(3) IRS status. If someone has not filed a complaint by now with the IRS perhaps they should. The C3 must be very careful in sharing staff with the for profit entity, and it must be very careful in how they interact.

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One of the revelations over the course of this saga was that WordPress.org != WordPress Foundation. It's under the personal control of Matt Mullenweg.

Wordpress.org is not part of the 501(c)(3). They tried, but the IRS turned them down. It's Matt's personal toy (staffed by people from Automattic), as far as anyone knows.

Which is another signal that Matt isn’t serious about the Wordpress Foundation. The correct move would have been to form a for profit subsidiary owned by the foundation to run Wordpress.org since it’s an unrelated business activity.

It’s a well trodden path used by tons of nonprofits like the Smithsonian, Mozilla, OpenAI, etc. when they need to operate something that the IRS won’t grant tax exemption.

Well, wordpress.org runs at a large loss...not clear how that could work exactly...

The Foundation gives its subsidiary money, just like any other parent company can.

Whether or not Wordpress.org makes money is irrelevant to its for/non profit status. It’s a legal technicality due to IRS tax exemption rules for unrelated business activities. They have to put those operations into a separate subsidiary, even if it never makes any profit.

If the nonprofit can’t afford to run Wordpress.org then the whole nonprofit was a farce anyway.

Where does the Foundation get such money? In 2022 it had revenues of $23k.[1]

[1] https://projects.propublica.org/nonprofits/organizations/205...

So it was a farce to begin with. Matt clearly had no intention of letting it be an independent foundation.

> Well, wordpress.org runs at a large loss

Someone's getting paid something for the hosting referrals here:

https://wordpress.org/hosting/

I quote from the page:

> If you do decide to go with one of the hosts below and click through from this page, some will donate a portion of your fee back

This has more info on the topic

https://www.pluginvulnerabilities.com/2024/10/28/matt-mullen...

> The correct move would have been to form a for profit subsidiary owned by the foundation to run Wordpress.org since it’s an unrelated business activity.

They formed WordPress Community Services PBC, which now runs the "official community" WordCamps, so sponsors didn't have to restrict their messaging:

https://wordpressfoundation.org/news/2016/introducing-wordpr...

> Mozilla, OpenAI

Are these supposed to be examples of how this kind of setup turns out well for the community? Because they are the opposite.

Are you saying their governance is worse than Wordpress.org amid this giant fiasco?

Mozilla Corporation is the one receiving the hundreds of millions of dollars from Google that funds almost all the the development of the Firefox browser. Without it, Mozilla would be a tiny fraction of what it is now and FF would be dead in the water.

This is entirely orthogonal from the community. It's an IRS requirement.

> Mozilla Corporation is the one receiving the hundreds of millions of dollars from Google that funds almost all the the development of the Firefox browser. Without it, Mozilla would be a tiny fraction of what it is now

How do you know? I mean sure if the Mozilla Foundatio wouldn't have bothered with any alternative fundraising opportunities, but that's not exactly a realistic alternative realtity, is it?

> and FF would be dead in the water.

FF is dead in the water. It's market share is small enough that devs don't care about it anymore and it doesn't really provide any real advantages to users unless you really care about telemetry data going to Mozilla instead of Google. Mozilla has don't pretty much all it can to kill any kind of differentiation while refusing to innovate at all.

> Wordpress.org is not part of the 501(c)(3). They tried, but the IRS turned them down.

My interpretation of their story [1] is that holding the WordPress trademark wasn't enough for 501(c)(3) status, so they had to do something educational like promoting free software.

They transferred the trademark once they received 501(c)(3) status, and could have transferred the operation of dot org too if they wanted.

I believe the consensus among the moderate community is that Matt continues to hold onto dot org for "control", just like how the Foundation's board mostly comprises Matt's friends, and never had actual external community involvement.

[1] https://wordpress.org/book/2015/11/the-wordpress-foundation/

I am not sure what you are saying. The assignment of the WordPress trademark to the Foundation was on the same day it was licensed back to Automattic and Matt for WordPress (commercial usage) and wordpress.org

Matt tried to put Wordpress.org as a 501(c)(3) but they ran into problems, e.g. it was a lead gen for paid plug-ins that Automattic owned. So Matt has used his and Automattic resources for wordpress.org for a long time. You can read more about this in the WPEngine suit (page 12). [1]

[1] https://wpengine.com/wp-content/uploads/2024/10/10.18.2024-P...

Let's put the trademark transfer and subsequent relicensing part aside, because I think we agree on that.

> Matt tried to put Wordpress.org as a 501(c)(3) but they ran into problems, e.g. it was a lead gen for paid plug-ins that Automattic owned. So Matt has used his and Automattic resources for wordpress.org for a long time. You can read more about this in the WPEngine suit (page 12).

Where in the lawsuit does it mention that "they ran into problems" transferring operation of dot org to the 501(c)(3)? All I see on page 12 is:

> Until recently, Defendants had given the WordPress community the impression that wordpress.org—the repository for the WordPress software and plugins—was owned and controlled by the WordPress Foundation.

Edit: I found it from a link in a different comment:

https://www.pluginvulnerabilities.com/2024/10/28/matt-mullen... (primarily https://x.com/photomatt/status/1840948013360910448)

A more appropriate question perhaps: can a lawyer specialising in US nonprofits corroborate Matt's claim?

There is some more discussion here. [1] I have no reason to doubt him...wordpress.org does support significant commercial activity, and even if it did go through, would likely require much more conflict/recusal issues. Not surprising he decided to pay taxes on an entity that probably runs at a loss anyway!

[1] https://old.reddit.com/r/Wordpress/comments/1g5o4n5/why_is_w...

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