Thank you for giving us a chance to explain our fundraising efforts and why they are well within federal IRS 501(c)(3) regulations and copyright requirements.
First, we are happy to share with you our December 3, 2018 letter from the IRS granting Locast (Sports Fans Coalition NY, Inc.) charitable, non-profit status under section 501(c)(3) of the Internal Revenue Code. This is an important and meaningful decision by the IRS because we told them in our application that we will seek donations from large underwriters and users alike. We explained that while the service would be free for the foreseeable future, we intend to ask users for donations, similar to how public broadcasting interrupts programming to ask viewers for contributions. As with the public broadcasting model, one is able to continue viewing (or in our case, using) the service even without making a donation. In our case, however, we reduce the interruptions for those who choose to contribute. Moreover, we also told the IRS that we might require the payment of an "assessment" in order to use the service, something we have not yet done, don't want to do, but have the right to implement if need be. The IRS, after reviewing all of this information, granted us 501(c)(3) status. Clearly, requesting donations is consistent with our non-profit status.
Second, we consulted outside counsel as to whether interrupting programming and bringing a viewer back to the home screen to request a donation in any way violates the Copyright Act in general, or section 111(a)(5) of the Copyright Act (under which we operate) in particular. They told us it does not. Section 111(a)(5) expressly contemplates the "assessment" of some charge to cover some or all of the cost associated with running a translator service. That is exactly what we're doing. We incur a lot of costs to start and run Locast-- software development, equipment purchases, facilities leases, CDN bandwidth, professional fees, and more. Asking our users to help defray this cost is consistent with the Copyright Act and its provision, 111(a)(5), allowing Locast to operate.
In a perfect world, we would get some huge grant or contribution that covers all of our costs, allowing us to offer Locast to the public for free. Believe us when we tell you... we're trying! We have and will continue to have meetings, calls, presentations, pitch sessions, and all other forms of funding requests in front of foundations, corporations, and wealthy individuals. Know any that want to give Locast some funding? We're all ears! In the meantime, in order to keep Locast up and operating, we're asking users to contribute once a month about what it costs to get a Starbucks Caramel Macchiato. They can do so, or, they can contribute nothing and sit through our corny contribution requests. The choice is theirs.