Virtual Cash

User generated content can generate cash, but typically not a lot of cash.

Adsense, Yahoo! Publisher Network, Amazon Affiliate Program, Feedburner, Commission Junction, and a host of other services are happy to pay you for the right to put ads or links on your pages.

But the amount of money that results is usually not enough to quit your day job.

I give my blogging revenues away to charity. It makes me feel good. But even that has its issues. If the money is sent to me directly, I get a 1099 and generally have to pay taxes on the money I am giving away. I can take a deduction for that money, but there are limitations on the deductions and I get hosed by the IRS for doing something good.

This morning, as I was blogging and doing email, I was listening to Radio Paradise, a listener supported internet radio station. I was hit with the urge to direct all the money I make on Yahoo! Publisher Network for the next month to Radio Paradise. It was too hard, so I didn't do it.  I sent them cash via paypal instead.

What I want is a place I can send all the money I am getting from these various services to.  I don't want to pay taxes on that money unless I ultimately take it down personally. I want to be able to send that money anywhere I want, to my blog host provider, to my podcast host provider, to charity, to Radio Paradise, or anywhere else that I feel like it should go.

It would be great if PayPal or someone else could build this. I'd use it

UPDATE: On my bike ride this morning, I thought some more about this and figured out that PayPal was already halfway there to creating this virtual bank account I want. Feedburner currently pays via PayPal. If Google Adsense, Yahoo Publisher Network, CJ, and other third party networks would support a PayPal payment option, I'd basically have what I need except for the tax implications which would remain a nuisance.

Comments

[csven]

Virtual currency.

Instead of paying people in "real" currency, operate through one of the virtual worlds. A company like Amazon could, for example, establish a presence in a virtual world like Second Life and instead of real cash, offer the option to give Linden dollars. Those could then be funneled to Radio Paradise's representative in SL. When that virtual currency is finally exchanged for real dollars, the taxes are paid.

It's probably only a matter of time before big internet companies like Google have virtual spaces anyways; same with companies like Amazon operating inside them.

[JL]

problem with having it in something like SL is how hosed the Linden:$USD exchange rate has been over time.

exchange rates over time

[Shannon Clark]

An option might be to direct payments directly to a non-profit, and never take them yourself.

There are some non-profits that will let you then redirect the funds to other non-profits (typically things like "donor-adviced funds") I don't know if one exists that will work with paypal in-bound and with the small amounts from paypal etc.

But it sure seems like a reasonable solution for someone to provide.

Basically - a non-profit that would allow you register and direct adsense, affliate etc revenues directly to them.

Then would allow you to redirect that income to other worthy non-profits.

This is similar to what BooksWeLike is doing (see http://bookswelike.net/) though the directing to a given charity happens by the user clicking through to an ad/affliate link - not by a given site owner persay.

Shannon

[Tom]

What if you reversed the equation. Imagine the goodwill if charities were allowed to give out their adsense codes and you placed their ads on your page. They get the money directly and you do not have to handle the money. A win win foreveryone in this scenerio.

[Stephen Bronstein]

If you structure a hobby right (basically if there is some way you could potentially make money at it), you can say that the whole thing is a side business which makes expenses in the name of that hobby/business deductible.

I feel like you should be able to do the reverse in this situation. What if you formed an LLC (doable over the internet for a few hundred dollars), had payments go into the LLC and then the LLC would pay out to the non-profits? The payments could then be a 'cost of doing business' and the business would end the year with a profit of $0. Of course, it costs a decent amount of money in most states to keep an LLC going, which would be another cost of doing business that might be greater than the tax savings.

[Chris]

One specific step towards this (albeit in the mobile realm) is Paypal's "Text to Donate" capability, which just significantly lowered the bar for small(er) businesses to arrange donations via pSMS billing events on donors' wireless bills.

The first example of this kind of channel was the "2HELP" common short code arranged by the CTIA for Katrina victims, where every SMS message sent to this five-digit short code yielded a $5 dollar donation to Katrina.