Mastodon has announced the formation of a 501(c) (3) non-profit entity in the United States to help it collect tax-deductible US donations and in-kind support. This new foundation has announced its line-up of board directors which includes Esra’a Al Shafei, Karien Bezuidenhout, Amir Ghavi, Mastodon CFO Felix Hlatsky, and Twitter co-founder Biz Stone.
The non-profit said that this board was chosen based on their values which overlap with those of Mastodon. With their input, Mastodon says it will continue to offer free, open-source decentralised social media.
The decision to become a non-profit in the US comes after the German tax office abruptly withdrew Mastodon’s non-profit status which it was given in 2021. Its tax advisor has submitted an appeal but no new information has been received.
You may be wondering why the creator of a free piece of software even has to worry about finances, well, it pays employees as well as developer and designer contractors and has to cover the hosting and service fees necessary for operation. To pay for this stuff, it receives donations from the community, which is subject to taxation.
Commenting on how the the revocation of its German non-profit status has affected things, Mastodon said:
“Our day to day operations are largely unaffected by this event, since Patreon does not presuppose non-profit status, and Patreon income does not count as donations. We have in fact not had to issue a single donation receipt since 2021. The significance of the non-profit status is in communicating our commitment to the cause of creating social media that serves the interests of its users instead of its shareholders. We now have the 501(c)(3) in the US to fill the gap. However, it’s also important for us that Mastodon is one of the few, if not the only social media platform that operates out of the EU, and we would like to keep it that way.”
The company concluded its announcement by thanking Jeff Atwood and Mozilla for contributing $100,000 each this year to support the non-profit. It also noted that donations like these have been important in supporting the two-person core development team continue its work.