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by skywal_l
1718 days ago
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> It's also worth noting that there is a strict separation between the Mozilla Foundation (the tax exempt non-profit) and Mozilla Corporation (the wholly owned, for-profit subsidiary which builds Firefox). The Foundation is not directly involved in the creation of Firefox. Wow I didn't know that. I always assumed Firefox was developed by a non-profit. So it basically means that Firefox is a commercial product (the purpose of which is to make money). Thanks for that bit of information which was not at all obvious if you don't pay close attention... |
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The subsidiary is a for-profit, but the profit all goes to the parent non-profit, which is then constrained in how it can use that income.
Think of a little charity shop that sells, say, second hand clothes in order that the profit from sales funds a charitable purpose like fighting cancer. The little shop is likely to be a for-profit company, wholly owned by its parent charity.
Charities have to follow strict rules about how they spend their money, care for their assets, make decisions, report on everything and be audited.
Everything they do is required to be demonstrably for the charity's purposes, which clashes with the on-the-ground flexilibilty required to make business-like decisions for something like a shop. For example when you decide to spruce up the lighting at the front of the shop to attract customers, which only indirectly serves the charity's goals.
That may be a poor example. The point is that the subsidiary business can be run more like a business, being managed, making decisions and spending its income in the freer way a business is allowed to do. The parent charity retains shareholder-like ultimate control, but that is indirect control; the subsidiary has its own directors and executives.
In the case of a shop that means it can spend on things that may attract customers, take gambles that may bring in more profit for the parent charity to use, and make day to day decisions that aren't subject to the same level of reporting, auditing and trustee oversight that the parent charity is. The shop's operating assets are outside the charity, giving it operational flexibility, but when it transfers some portion of assets as profits to the charity, those assets become inside and how they are spent becomes more tightly regulated.