John O'Nolan

Possibly the greatest philosophical difference between Ghost and other platforms, is that it is structured as a company which is a Not for Profit Organisation. But what does that actually mean, and why is it important to us? For many, this is a foreign concept - and one which is is easily misunderstood - so I thought it might be interesting to take a little time to explain what we're doing.

What is a For-Profit Company?

All over the world, there are many different kinds of legal structure which companies and individuals can use to trade under. A Limited Company, a C-Corporation, a Sole Trader, a Limited Liability Partnership, the list goes on. Each country has its own set of legal structures and its own set of laws to accompany them. To keep from getting too complicated, I'm just going to cover the basic rules that these structures share - trying to keep it somewhat location-agnostic.

In the UK, probably the most common and popular company structure is the Limited Company. In the US this is a C-Corporation. These share the same basic principles. The company is its own legal entity, which is owned by one or more people. The ownership is determined by "shares" - and what proportion of a company one owns is dictated by how many shares one has. If a company has 100 shares and I own 50. I own 50% of the company.

These companies are For-Profit. Which is to say that their purpose (the reason they exist) is to generate a profit for their shareholders. Most commonly this happens in two ways.

If at the end of the year, MyCompany Ltd has made $1.2million in revenue and incurred $200,000 in expenses, it has $1million of profit which it can decide what to do with. If it declares $500,000 as dividend (which is to say, money to distribute to its owners) and I own 50% of the company - I get a payout of $250,000. If somebody, let's call them Facebook, wants to buy MyCompany Ltd and they're willing to pay $1billion - I am effectively selling them my 50 shares for $10million each.

In both scenarios the ownership of shares in the company entitles me to personal wealth when the company makes a lot of money - either by selling its products, or selling itself.

This is a very basic overview. Keep that in mind.

What is a Non-Profit Company?

Non-profit companies also have many different structures. The structures in different countries (notably the USA vs the UK) are far less comparable than their For-Profit counterparts. This is often where confusion arises.

The most common mistake made is that people generally understand "Non-Profit" and "Charity" to be synonymous. They are actually very different.

A Non-Profit organisation is the same as a For-Profit organisation with two major exceptions:

It is not allowed to distribute profits to anyone, no matter how much money it makes. That means no dividends for shareholders. There are no shareholders. Nobody owns the company. It has trustees, who run the company - but they cannot sell their "trusteeship" to anyone else.

What does this mean? Essentially - 100% of the money which a Non-Profit makes is re-invested in the company. Additionally, Facebook can't buy the company - because there is nothing to buy. It's a legal entity which nobody owns.

Other than these two points, essentially a Non-Profit trades in the same way as any other company. It pays the same taxes. It has the same regulations around it.

A Charity is a Non-Profit Organisation with much stricter rules about what it is and isn't allowed to do:

A charity (except in special circumstances) cannot pay a salary to its trustees. Typically these people are volunteers. A charity must disclose all of its financials publicly, in great detail, and be audited by several government bodies. A charity may only do things which have charitable purpose for public benefit, and nothing else. A charity receives large amounts of tax-relief from the government for conforming to these rules.

What does this mean? Charities exist solely to benefit others. They operate on a shoe-string budget and generally spend 90% of their time trying to raise funds through donations in order to keep doing what they do.

Again, these rules vary a huge amount from country to country, and this is only a basic overview.

Looking at it a Different way

For the geeks among you, a CSS inheritance analogy for this whole entire blog post:

.company {
 legal-entity: on;
 shares: yesplease;
 distribute-profits: fuckyeah;
 charitable-purpose: lol;
}
.company .non-profit {
 shares: off;
 distribute-profits: off;
 charitable-purpose: 50%;
}
.company .non-profit .charity {
 pay-salaries: off;
 public-financial-statements: on;
 charitable-purpose: 100%;
 tax-relief: on;
}

Each company structure inherits the rules from its parent, and (optionally) overrides some of them with more specific rules. Here are some examples of companies you've heard of, and which CSS class they would get:

• Company - Facebook, Google
• Non-Profit - Mozilla, Ghost
• Charity - Unicef, Red Cross

So Why is Ghost Non-Profit?

I believe, truly, that the most honest and transparent structure for any Open Source project is as a not-for-profit organisation.

The point of Open Source is to promote furthering technology for the entire world by not locking down software with patents and charging millions for them. The point of Open Source is that shared technology is better than closed technology because it has so many more people working on it. The point of Open Source is that the software you create benefits not just yourself, but many others - and in return you receive the same.

With companies who extoll the values of Open Source one second and take $millions in VC funding the next - my question is always the same: Who are they really serving? Do they really care about making great software for users? Or are they doing what they can to maximise profits for themselves and their investors?

The answer to the question itself isn't the issue. The problem is that any ambiguity around the answer exists.

There is a great deal of talk about "the spirit of Open Source," and most of the time it centres on licensing, as if that is the be-all and end-all of the philosophical discussion. The thing is, a project's license is simply the owner dictating what values they want you to promote in future.

I believe a far more powerful statement is what values the project owners promote themselves. Right now.

So in the end, for Ghost, it came down to this:

I wanted to make it completely clear that Ghost is about making great software. I own 0% of the company. Hannah owns 0% of the company. According to our legal documents of incorporation, neither of us can pay ourselves enormous tax-free dividends. Just normal, taxable salaries.

When we finish the year with surplus revenue (or, "profit") we can only use that money to reinvest into the company and make Ghost better.

Being non-profit is a statement.

A statement that we are building Ghost because we love it, not cause we want to get rich off it. A statement that we are independent, there is no chance of us ever being taken over. A statement that we are building something for the benefit of our users, and nobody else.

I believe that holding ourselves to this standard is far more powerful to the future of Open Source than anything else.

This is what I call Sustainable Open Source.

The more users and developers invest in it, the stronger it becomes and the better it serves those same people.

I'm incredibly passionate about this subject, and I really hope Ghost can lead by example.