Charity? Non-profit? No revenue? | Weblog •

We’ve spoken earlier than about Lichess’s moral stance and the way we do “enterprise”. Certainly, on the backside of this and each different of our weblog posts there’s a brief rationalization:

Lichess is a charity and fully free/libre open supply software program.
All working prices, growth, and content material are funded solely by person donations.

We aren’t going to give attention to that side once more (no less than not as we speak), however as an alternative make clear what it means to be a non-profit or a charity, because it’s clearly a message that should get on the market extra:

Stick to us by the definitions!

Non-profit: no internet revenue (earnings past bills) will profit any particular person.

That is in distinction to most companies the place both personal house owners or public shareholders achieve monetary advantages from the income of the enterprise.

Charity: an organisation with philanthropic objectives, aiming to enhance a group indirectly.

After all, exact authorized definitions will fluctuate by nation, and technically Lichess is a French affiliation — which encompasses non-profit standing and charitable standing — with a purpose to “promote and encourage the instructing and follow of the sport of chess and its variants”.

Definitions over, onto the primary article!

A standard false impression we see is that our non-profit standing means Lichess is barely surviving. In any case, an organisation with out revenue is a foul organisation, proper? No!

Revenue is a mechanism the place people (house owners or shareholders) syphon off worth from an organisation for his or her private achieve. For a non-profit, we will generate the identical earnings as a for-profit firm, however the important thing distinction is that all of that earnings goes again into the organisation, to maintain it rising, hold making it higher, and in our case hold it free.

There’s a number of rhetoric about how companies can do extra for the group, by advantage of being for revenue. However in actuality, a non-profit is placing 100% of its earnings again into the group. Absolutely the quantities could also be completely different, since a smaller proportion of a bigger whole earnings can nonetheless be extra general, nonetheless for equal earnings a non-profit is by definition doing extra (or no less than ought to be!).

Lichess additionally generates (nearly) all our earnings from donations, however in idea, a non-profit may have a subscription/paywall mannequin and presumably generate far more earnings (don’t fear, we gained’t). The rationale we don’t use that type of enterprise mannequin just isn’t {that a} charity couldn’t use it. As an alternative it’s as a result of we expect it’s a unhealthy mannequin for reaching our purpose of selling chess.

The ultimate wrinkle within the definitions is that it’s attainable to be a non-profit however, like FIFA, nonetheless take cash out of an organisation in different methods. Rule-abiding non-profits (reminiscent of Lichess) additionally pay salaries to staff. We publicise these at so you possibly can see whether or not these are consistent with market charges and affordable.

Lichess has plans to turn out to be the next class of charity inside France – and a few of what we have finished over the yr is to analysis and start that multi-year course of. We’ll give an replace on that, and our charity’s plans, later this yr.

Thanks for listening to our TED speak!