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As interest in using Emacs was growing, other people became involved in the GNU project, and we decided that it was time to seek funding once again. So in 1985 we created the Free Software Foundation, a tax-exempt charity for free software development. The FSF also took over the Emacs tape distribution business; later it extended this by adding other free software (both GNU and non-GNU) to the tape, and by selling free manuals as well.
The FSF accepts donations, but most of its income has always come from sales -- of copies of free software, and of other related services. Today it sells CD-ROMs of source code, CD-ROMs with binaries, nicely printed manuals (all with freedom to redistribute and modify), and Deluxe Distributions (where we build the whole collection of software for your choice of platform).
Free Software Foundation employees have written and maintained a number of GNU software packages. Two notable ones are the C library and the shell. The GNU C library is what every program running on a GNU/Linux system uses to communicate with Linux. It was developed by a member of the Free Software Foundation staff, Roland McGrath. The shell used on most GNU/Linux systems is BASH, the Bourne Again Shell, which was developed by FSF employee Brian Fox.
We funded development of these programs because the GNU project was not just about tools or a development environment. Our goal was a complete operating system, and these programs were needed for that goal.