I suspect the author doesn't live in the US, as a few of his points don't apply to US non-profit law.
In particular:
"A charity (except in special circumstances) cannot pay a salary to anyone. Typically everyone who works for a charity is a volunteer."
In the US, when people talk about non-profits they're usually talking about organizations with the 501(c)3 tax status (http://en.wikipedia.org/wiki/501%28c%29_organization#501.28c...). Those organizations are further classified as either public charities or private foundations -- the former being what people typically mean by "non-profit."
US non-profits almost always pay some people for some of their work. There are restrictions on salary, insofar as you have to explain that salaries are justified to the IRS (this really only applies if the salary is beyond normal market rate).
"A charity must disclose all of its financials publicly, in great detail, and be audited by several government bodies. "
The same is true in the US, though non-profits do not have an audit requirement here. Large non-profits typically hire a CPA to do an audit each year, though, as multi-million foundation grant-givers often require it.
"A charity may only do things which have charitable purpose for public benefit, and nothing else."
This isn't strictly true in the US. A charity can engage in unrelated business, but it's taxed on it and it can't account for a substantial amount of revenue. For instance, most Museums have gift shop, and selling stuffed animals isn't usually their charitable purpose, so the organization will typically pay tax on that revenue.
"A charity receives large amounts of tax-relief from the government for conforming to these rules."
True in the US -- non-profits don't pay income tax and donations are tax-deductible.
"A charity (except in special circumstances) cannot pay a salary to anyone."
That's not true for the UK, either. Lots of charities have sizeable paid staff: Oxfam GB has about 6,000, the Canal & River Trust about 2,000, and so on.
> "In the US, when people talk about non-profits they're usually talking about organizations with the 501(c)3 tax status."
Even in the US, there are in fact plenty of other types of non-profits in addition to 501-c-3.
501-c-3 (charitable) organizations have stricter rules than other non-profits, and in return are tax exempt. In this way the 501-c-3/non-profit distinction is analagous to what he describes as charity/non-profit in the UK.
The other types of non-profits do (usually) pay corporate taxes, but, similar to what he describes in the US, have no shareholders or owners and pay no dividends.
It is true that people don't talk about them as much as they do 501-c-3. For a variety of reasons, people get really excited about the tax exemption thing and try to get 501-c-3.
But there are other types of non-profits, it's not strictly true to say "non-profits don't pay income tax and donations are tax-deductible" --- not paying income tax is only true of some types of non-profits, and donations being tax deductible is _only_ true of 501-c-3 non-profits, it's a unique distinction of 501-c-3.
While non-501-c-3 non-profits aren't talked about a lot, they can sometimes make sense. For instance, if you want to take yourself out of the ownership/equity market for reasons similar to OP, but do not meet the IRS requirements for 501-c-3.
The author's comments aren't correct for the UK, either. He writes:
"A charity (except in special circumstances) cannot pay a salary to anyone."
Charities ( unincorporated, companies or CIOs ) can of course pay salaries, it's how they attract good people to work on the boring back-office stuff.
For example, the British Red Cross ( registered charity 220949 ) has an advertisement at the moment for an Admin Suport Manager, £21,783 - £28,046 per annum + benefits.
I always smile when I hear "non-profit". Last year a US non-profit that dealt with military research was looking to buy from us and asked for a discount because they were a non-profit.
I looked on their website and their annual revenues were in the ballpark of x1000 that of ours. Maybe it's a European view, but I find the idea of a defence non-profit bizarre and the idea we should discount for them on this basis even more so.
By being a non-profit, the main beneficiary is their customers (the DoD I'm guessing) because the pricing doesn't need the usual margin of profit. I'd just be reducing the cost for them, since costs are ultimately just passed on.
My point is, this a boundary case of stretching the ethics of "non-profit" way too far. Yes, non-profit is great for open source, but I would be concerned about using it as a vehicle when large companies are the ones benefiting (which isn't the case with Ghost).
They are exploiting a hack -- namely, that there are lots of stupid people out there who think that "non-profit" somehow means "good."
When revenues exceed expenses, non-profits still distribute them. They just distribute them to employees, meaning management, meaning themselves. It's like a tightly-held for-profit company.
So, in the case of Ghost being non-profit, this is just some kind of statement about how dedicated they are. Because I don't see what this brings to the open-source project itself (for instance, anybody can fork it and do whatever they want; the fact the original author is non-profit does not change anything).
In particular:
"A charity (except in special circumstances) cannot pay a salary to anyone. Typically everyone who works for a charity is a volunteer."
In the US, when people talk about non-profits they're usually talking about organizations with the 501(c)3 tax status (http://en.wikipedia.org/wiki/501%28c%29_organization#501.28c...). Those organizations are further classified as either public charities or private foundations -- the former being what people typically mean by "non-profit."
US non-profits almost always pay some people for some of their work. There are restrictions on salary, insofar as you have to explain that salaries are justified to the IRS (this really only applies if the salary is beyond normal market rate).
"A charity must disclose all of its financials publicly, in great detail, and be audited by several government bodies. "
The same is true in the US, though non-profits do not have an audit requirement here. Large non-profits typically hire a CPA to do an audit each year, though, as multi-million foundation grant-givers often require it.
"A charity may only do things which have charitable purpose for public benefit, and nothing else."
This isn't strictly true in the US. A charity can engage in unrelated business, but it's taxed on it and it can't account for a substantial amount of revenue. For instance, most Museums have gift shop, and selling stuffed animals isn't usually their charitable purpose, so the organization will typically pay tax on that revenue.
"A charity receives large amounts of tax-relief from the government for conforming to these rules."
True in the US -- non-profits don't pay income tax and donations are tax-deductible.