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> Contributions go to the Mozilla Foundation, a 501(c)(3) organization based in Mountain View, California, to be used in its discretion for its charitable purposes.

I've read about this before I think, for some reason donations cannot be used for development and has to be used for outreach etc?

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All it means is that they can use the funds as they see fit. There should be a breakdown somewhere on their site of what % of funds go toward development verse admin/fundraising as they are a 501c3.

This is correct. The best way to support Mozilla products is to use them.

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