Mastodon, a social network that has seen its popularity rise following a series of controversial actions by rival network Twitter CEO Elon Musk, is a nonprofit and will remain a nonprofit, according to founder Eugen Rochko.
Rochko told The Financial Times he had rejected at least five offers of cash infusion from venture capitalists. In doing so, he has held that commercialization of the site would compromise several of its value propositions, including independent speech and the need to preserve operations from the whims of management. Rochko also indicated not turning Mastodon into a commercial operation would serve as a hedge against management running the company into bankruptcy.
Mastodon is a decentralized set of social media platforms that operate under the Mastodon engineering structure. Each individual platform is independently monitored, allowing individual administrators to provide oversight as they see fit.
Musk completed his acquisition Twitter in late October 2022 after an on-again, off-again purchase process that had started in April. He has made a series of moves that have alternatively confused and pleased observers. These include loosening and tightening content guidelines, promoting and dismissing content moderation and ethics teams, launching and modifying monetization schemes and slashing staff, especially among non-engineering workers.
In April 2022, Rochko wrote on the Mastodon blog “[O]ne of the reasons I started looking into the decentralized social media space in 2016, which ultimately led me to go on to create Mastodon, were rumours [CQ] that Twitter, the platform I’d been a daily user of for years at that point, might get sold to another controversial billionaire. Among, of course, other reasons such as all the terrible product decisions Twitter had been making at that time. [CQ} And now, it has finally come to pass, and for the same reasons masses of people are coming to Mastodon.”
Even before the Musk/Twitter imbroglio, Rochko had been taking steps to maintain Mastodon’s commercial independence by attaining nonprofit status for the organization. In August 2021 he announced Mastodon had been granted nonprofit status by the German government, where both the organization and its founder are based.
“A non-profit limited liability company in Germany is structered [sic] and operates similarly to a for-profit limited liability company with a few key differences,” Rochko wrote on the organization’s blog. “The founding document of the company is written such that the activity of the company is working towards goals that benefit the public; the shareholders may not receive any revenue from the company’s activities and can at most withdraw the funds that they originally paid in; employees may not receive extraordinarily high wages; and the company can receive donations which are then tax-free, although any other income that does not fit the definition of a donation continues to incur various taxes.”
Rochko is the sole owner of Mastodon. He put up 12,500 euros (roughly $13,300) of the 25,000-euro commitment at certification, and has been paying off the remainder. According to the organization’s 2021 annual report, he is the only salaried employee, although the organization pays a handful of individuals hourly consulting fees, primarily for development and finance work. According to the 2021 annual report, Rochko drew a 2,400-euro (around $2,557) monthly salary.
The annual report covered a seven-month period, June through December 2021, reflecting its first seven months as a nonprofit. During that time, the organization generated 55,300 euros (just under $59,000) through funding apps such as Patreon, as well as an undisclosed sum from 20 subscribers on its custom sponsorship total. For that period, Mastodon reported 23,200 euros (roughly $24,725) in expenses. As of January 2, 2023, Mastodon’s Patreon site reported 9,411 patrons who were contributing $33,465 per month.
The NonProfit Times has reached out to Mastodon and Rochko for comment but had not received a response as of deadline.
