IAB's CEO Greg Stuart

While the Interactive Advertising Bureau conducts some money making enterprises – to the plain chagrin of some competing industry firms – the non-profit group said it has nothing to do with the for-profit Internet Advertising Bureau, formed as a Delaware LLC in 2003. Somewhere in the U.K., that for-profit alter ego of the Internet Advertising Bureau sits on a shelf, waiting for someone to pay 550 quid to buy the two-year-old corporate shell.

When asked about the existence of this LLC, Greg Stuart, President and CEO of the IAB, said that he was unaware of it. He added that there has been talk at the board level regarding whether some of its activities might better be classified as for-profit. But he said none of these activities were substantial enough to merit any special consideration. He said that the possibility of a for-profit iteration of the IAB is “all lunch talk at this point.”

Stuart's U.S. trade group originally went by the name Internet Advertising Bureau until 2002, when it changed the “I” to represent “interactive,” then a more inclusive term that allowed it to position itself better as a representative of cable and other non-internet interactive firms. Not long after, the original name was taken for Coddan's shell company.

The practice of a non-profit entity creating a for-profit subsidiary is not uncommon. According to Carolyn Osteen, a partner at Ropes & Gray LLP in Boston who advises a wide range of non-profit organizations, some non-profits routinely use LLC’s as part of their investment structure for certain types of income. In addition, some non-profits shift their assets and activities into a for-profit structure in order to more completely engage in commercial activities or to yield a return for investors. At present, this is most common in the context of non-profit hospitals shifting to for-profit status. However, other types of non-profit organizations, including trade associations, may change their status as it suits their purposes.