I was reading on slashdot this morning that Mozilla has been officially recognized as a 501(c)(3) by the United States federal government. Getting qualified as a charitable non-profit, giving software to the world can be a significant competitive advantage for the Mozilla directly and Open Source in general.

Being a non-profit can provides significant advantage to Mozilla, and it’s respective aims. There will be opportunities to both decrease outlays on goods (hardware, servers, etc) and services (professionals donating time can reasonably deduct the hourly rate for those pro-bono). Mozilla could, depending on how far they wish to stretch the limits of the non-profit, provide tax breaks to open source developers in the US contributing at a reasonable rate. I have no idea if they plan on doing this, but it’s an interesting premise all the same and I think it would be just brilliant. There are also advantages from a revenue perspective.

Companies wishing to support Open Source initiatives had to do so previously by funding that internally through developers time, etc. While this time is deductible as a business expense, it does appear to deduct against directly the business unit/department/project that is making said contribution. Companies now have the ability to make a greater contribution and have that contribution to the world of science, and humanity reflected in their tax bill. In theory, if Mozilla manages their fundraising efforts properly they may be able to significantly increase the amount of $$ they could spend on a central development team adding clarity and continuity to projects that are full of heart, but sometimes lack focus.

I’m not saying that Open Source is just as much a worthy cause as many of the other humanitarian and charitable organizations. At the end of the year, I’d still likely spend a few hundred dollars that has a direct effect on saving and improving lives. Open Source does that, but in a different and proportionately smaller ways. However, providing this logistical benefit to companies wishing to support Open Source is a move in the right direction.