response 125 of 138:

Nov 5 05:01 UTC 1996

I'm not sure how much Grex's Internet access is worth.  Last I checked, a
shell account with a fast connection and not many busy signals was somewhere
around $15  per month (this was a bit over a year ago).  That's three times
the cost of a Grex membership, if somebody gets a year membership, but we're
hardly providing the same service.  What we're providing is an abysmally slow
service with lots of busy signals.  I would guess that's probably worth less
than a coffee mug, but I'm not sure.

If, as Mary says, the IRS lists specific acceptable items rather than a value
range, this is moot anyway.

response 127 of 138:

Nov 5 07:21 UTC 1996

Mary, This discussion is not about deductible contributions, so I 
am puzzled why you brought it up in resp:121. That seems irrelevant 
to me.

I equated tote bags (though other gifts work as well) to our 
internet connection because, in my opinion, neither is related to 
the primary mission (of PBS and Grex respectively). Both are simply 
gifts in exchange for donating. We are in a better position to 
offer telnet as a gift than tote bags, because it is cheaper for us 
to provide it. We have the same problem PBS does -- we need to 
encourage people to donate to our cause. Therefore the same 
strategy, a small gift in exchange, is appropriate. 

This is all my opinion, of course. Obviously not all agree with it. 
John, for example, said that he thought it was like getting extra 
programming. It is a particular point of view that I don't share.

If the service we offered was ever high enough in quality to 
compete with what ISPs provide, I would worry about this strategy, 
as it might tend to attract people to Grex for the wrong reason. I 
am certain that it does not do that now, and I don't think that 
that will ever happen, even with a T1 and a sun 4/400, because I 
think that even then Grex will still be too slow to siphon off any 
ISP business.^K

response 129 of 138:

Nov 5 12:30 UTC 1996

Equating internet with a mug is a bit more complicated than that, because
internet is a service.  The value of internet for how long is equal to the
value of a mug?  A month?  If so, then that's about the price of a grex
membership for that month.  A year?  Then it would be the same as giving a
mug, value wise.  However, I suspect that srw wasn't talking about the value
of the internet connection here on grex at all.  (It may be entirely possible
that the value of connecting to the internet through Grex is in the $5-$6
range, and if so, then is Grex and isp for selling it for it's fair market
value?  :)

response 131 of 138:

Nov 5 16:22 UTC 1996

  Another probably irrelevant side-thought, but one which I think
is kind of interesting....
 
  One way to estimate the *cost* of providing a service to a member
(no relation to "market value") would be to estimate the fraction
of resources it takes out of Grex as a whole, and multiply that by
Grex's total expdenditures.  Here's a rough example, with numbers
off the top of my head, and some assumptions built in, but it gives
the idea:
 
  5% of a members time is spent using telnet (according to survey).
 
  5% of the time people spend on Grex is spent by members.  (Just
  a guess; exact figures could be determined with the wtmp log).
 
  Grex spends $10,000 a year. (Maybe lower, but something like that).
 
  .05 x .05 x $10,000 = $25
 
  So you could very roughly say that it costs Grex $25 per year
to provide outbound telnet service to all of its members.  Divided
up between members, that's $0.25 per member per year.  So with a $60
membership, they get an added benefit that costs us about a quarter.
 
  I could be off by a fair amount here, but I believe that any
reasonable annual cost estimate will be lower than the cost of a mug
for any particular service perq we'd likely give to members, because
so much of Grex's costs are spent on non-perqs and non-members.

response 133 of 138:

Nov 5 19:28 UTC 1996

There is a reason to call the membership fee a "donation" not a
"internet service fee" that has nothing to do with the IRS.  If it's a
"paid-for" service, then we have an implied contract with the user, and
an obligation to either provide the service, or return the fee.  If it's
a "donation" or "gift", then we don't have an implied contract, and if
for some reason we become unable to provide internet access (say,
there's a $10,000/yr internet access fee, or it's outlawed by congress,
or even if we just run out of money), then we don't have to return the
donation.

If you ask any part of the government their opinion on what is legal,
it's *very* important to ask them to cite the specific law(s) that applies
in the case.  So far as staying legal goes, the only thing that counts
is what the law actually states; the opinion of individual government
servants has no weight and in fact is often just plain wrong.  I seem to
recall a study someone did once of advice given by the IRS over the
phone, and they were wrong something like over 30% of the time.
Especially if you are concerned about minutia, you *have* to read the
law to learn where the edges are.  Even then, there may be unresolved
fuzzy edges (and you might need to review the case history, or talk to a
lawyer to best understand them) but you definitely need to start with
understanding what the law itself says.

response 135 of 138:

Nov 6 11:15 UTC 1996

Not particularly.

response 137 of 138:

Nov 6 18:02 UTC 1996

You may talk IRS if you like. I think it is all irrelevant.
We aren't 501(C)(3). Mary brought it up, not me.

I think it is OK to offer unrelated services only to members for all the
reasons I have already stated. Our important services, those related to our
mission, should be free. It is important for us to raise funds so that we
can perform our mission well, and it has been shown that these small perqs
can enhance our ability to do that.

Yes, a token service is different in nature from a token item, 
and various people have pointed out the ramifications, but it is cheaper 
and easier for us to provide services than items, so I don't see the harm.
The services plays the same role as an item in the PBS giveaways.
The important things to remember about this service are that it is
(a) cheap to provide, and (b) irrelevant to our mission.

I agree with Marcus's analysis.