From Fan History Wiki
Profiteering has always been an issue in the fan community for a variety of reasons. The most obvious reason is that, in the case of the traditional media fan fiction community, fan fiction is derivative, that is derived from a copyrighted work where copyright law gives the creator the right to control all derivative works as part of their copyright. The fan fiction community, by and large, accepts this and acknowledges this through the standard practice of using disclaimers. The community is also quick to generally note that members of the fan fiction community do not seek to profit from their works. Despite the general taboo against making money off of fan fiction and other fan related activities, the situation crops up pretty regularly where people in some form seem to profit from fan fiction or other fan-related merchandising. Below is an examination of some historical situations in the fan community where profiteering has been an issue.
There was a kerfluffle in the Blake's 7 fan fiction community during the 1980s when some fans, along with actors related to the show, wanted to set up and create several fan run, for profit Blake's 7 conventions.
Buffy: The Vampire Slayer
In the Buffy: The Vampire Slayer fan fiction community in August 2005, cousinjean " sent out a plea to her friendslist: Pay me to write fanfiction for a year."  This was roundly condemned by the vast majority of the fan fiction community. It was also picked up and featured by Lee Goldberg. 
Has Cassandra Claire reaped finacial rewards from her fan fiction? The short answer is yes. The longer answer is a bit longer and will be detailed below.
The story of her receiving finacial and material rewards from her fan fiction started around 2002. The first example dates to February 15, 2002 where Cassandra Claire posted a PO Box address to her LiveJournal.  She played it down like fans were pestering her so she had to cave in and accept that she must accept gifts from her fans. The timing and phrasing of this was odd because in the same post, she referenced a stalker who she claimed was trying to get in to contact with her. In March 2002, she would reference things that people had sent her.  That people were sending her these things for her fan fiction is clear. One comment in her LiveJournal spells this out when it says:
- When are you going? If I drop something off for you at the address you posted a few posts ago, will you get it? Don't think of it as payment for writing fan fic, rather, think of it as a bribe to continue writing fanfic.
- - Emily 
This type of request to be sent stuff was repeated on April 23, 2002 on ParadigmOfUncertainty.  She again asked for her fans to send her stuff but this time, the request was not made in what can be argued as the personal space of a personal LiveJournal but on a very public mailing list which was dedicated to, amongst others, her fan fiction. This list had a membership numbering in the thousands.
On May 6, 2002, Cassandra Claire opened a CafePress store to hawk merchandise based on the Very Secret Diaries.  How much money she made from the store is unclear as the finicial information is unclear. The context of Cassandra Claire's post seems to clearly indicate that the profits were going to her. No mention of donating this money to charity was made. This makes it a bit confusing in that Lar deSouza on a post dated August 2, 2002 implied the profits were going to charity.  At no point did Cassandra Claire or Lar deSouza spell out what charity that was, nor did either provide financial information regarding how much money was made. At no point, in the comments available in her entry on the store opening did Cassandra Claire thank people for buying because they were supporting her charity. 
On May 26, 2002, the store was closed down. The announcement read:
- OOPS! Cafe Press has issues with the use of any of Tolkiens names/places in the T-Shirt designs and have asked Cassie to get permission from Tolkien Enterprises before the items in the stores can be sold again.
- Even tho there is alot out there on the net on Copyright Laws regarding Parody, and these designs may very well be covered under these laws, Cassie has decided to pull the stores till it can all be worked out.
- Sorry for any inconvenience. 
At this point, it seems like the profiteering would be at an end. Lesson learned. This was not to be the case. At some point, probably before August 2002, the store opened up at a new location. It was referenced in several places. One of these references dated to November 9, 2002. While Cassandra Claire's fan artist might have said money was going to charity, no references to the charitable aspect could be found.  By December 14, 2002, the store had closed again.  The reason for this time was never explained but the store was open again by December 23, 2002.  The store would close again not long after that. At least two web pages claimed that the reason the store had closed was because Tolkien Enterprises had sent CafePress and Cassandra Claire a cease and desist letter for trademark violations.
Whether these rumors are true are not is up for some debate because Cassandra Claire herself never seemed to indicate she had been contacted by Tolkien Enterprises. In a LiveJournal entry dated February 11, 2003, she said of her official contact with the powers that be:
- Someone also asked me if I had gotten a Cease and Desist letter from the Tolkien people telling me to stop writing these. This posits an alternate universe in which they care about the Very Secret Diaries, but the answer to that would be, obviously, no I haven't. I don't know anything about how issues of fanfic stand in the LOTR fandom because I'm not in it, but there seem to be plenty of slash archives that exist with no issues so I can't imagine why TPTB would want this fairly mild stuff off the net. On top of which, obviously, if I had gotten a C and D I'd have had to take down what ALREADY exists, not just stop writing new material. That's how these things work, AFAIK. The only semi official missive I have ever recieved from anyone Tolkien related is a letter from the Tolkien Society saying they'd read the VDSs at a meeting and were amused. 
Around December 2003, the dveritas shop on CafePress was opened.  It is mentioned at The Nine Muses dot Net saying proceeds went to charity but the page's creator did not specify or link to any charity.  Cassandra Claire does not speak of the charity or who got the profits in her LiveJournal. There is no public accounting for the funds.
The efforts to gain material rewards did not seem to end. On March 6, 2004, Cassandra Claire posted to her LiveJournal "Everyone really does have an Ipod but me!"  Cassandra Claire's fan girls responded with comments like:
- You will soon! I promise. Sorry this is taking so long. But if it makes you feel any better, I'm getting you one before I get myself one :P
- Thank you for DV14. Best use of thirty minutes I could otherwise spend doing homework EVER :D 
And comments like:
- If you want it so badly why don't you just buy one? It is not that expensive.
- I will buy you one if you want just so you can stop thinking about it and start writing DV and as a special favor you can tell me the ending:)
- Just e-mail me your name and address 
It is an unknown as to if fangirls actually sent Cassandra Claire an iPod. It is not out of the realm of possibility as Cassandra Claire's PO Box information was still available at that time on ParadigmOfUncertainty and her LiveJournal. The issue is further complicated by the fact that, later, Cassandra Claire would not be consistent in her explanation as to how many iPods she recieved and who bought them. Below are some of the examples of the contradictory comments. These examples are by Cassandra Claire and were posted to FanFicRants in response to LapTopGate:
- 3) No "minions" coughed up Ipod money. My friend Heidi bought me an Ipod, and I think a few friends helped her out with it. Nobody ever posted asking for Ipod money. 
- I did not know that. I got an Ipod from Heidi, and she told me that the only people who contributed were people who were going to get me something anyway. I never saw any of the friendslocked entries about the Ipod because they were locked away from me. I don't know exactly who contributed but I assume they were friends because the posts Heidi made were friends-locked. 
- I never got an Ipod from fans, so it seems unlikely that I would have posted and said that I did. Heidi bought me an Ipod for my birthday, and a few friends chipped in. 
- Yes, many people posted on my LJ saying "I'll get you an Ipod!" but I never thought they meant in particularly or that it would come to anything. And it didn't. I got an Ipod from Heidi, and she told me that the only people who contributed were people who were going to get me something anyway. I never saw any of the friendslocked entries about the Ipod because they were locked away from me. I don't know exactly who contributed but I assume they were friends because the posts Heidi made were friends-locked. 
- It was done for her by her good friend who honestly I think had a lapse in sanity in assuming that Cassie would be okay with that--it was an attempt to take a collection to by her a group birthday present from the fandom. I honestly don't know how it turned out--I don't think Cassie said anything about it publicly though which leads me to believe she somehow heard about the idea and shot it down before it had a chance to lead to the inevitable wank. 
- Well, here's at least where she hints and then gratefully takes in the offers. Personally, I just like to snark at her coyness, not so much because I think it's wanky -- if people want to buy her iPods for writing plagiarized and/or overwrought Harlequins, more power to her -- but because her fangirls are just so damned funny. And annoying. And then funny again. Hell, the ones here on JF are hilarious. But very annoying. 
This leaves the question of did Heidi8 give her the iPod? Did Heidi and a few friends give it to her? Why does Cassandra Claire not know who gave her the iPod? Why did Aja, a close friend of Cassandra Claire, not know? Why was Cassandra Claire asking people for an iPod and thanking people for saying they were going to give her one? She seems to have recieved at least one, by people who were close friends of her as a result of her fan fiction. That much is known and this seems to be profiting from her fan fiction.
Then came December 4, 2004 and the infamous case of LapTopGate. Cassandra Claire clearly benefited materialistically because of her fan fiction. Fans were contributing because of her fan fiction.  In some cases, they contributed with the hope that she would write faster.
When the money topped the cost of the lap tops stolen, Heidi8 and Cassandra Claire made known that some action figures were also stolen and all excess would be donated to buy new toys to help children for Christmas. The money was not turned off. In fact, Heidi8 went out and solicited for more money because of this new cause.
How much money was ultimately raised? How much went to laptops? This is unknown. It is known that Cassandra Claire and Ruby recieved their laptops. The actual finacials of the situation as to how much was spent and how much was donated is unknown. Heidi8 was not finiacially transparent. She appeared to just cut a personal check to send to the charity in question:
- Many of you saw the email I posted last week re Cassie's computer, as
- well as those of her boyfriend Josh and her roommate Ruby - they (and
- a number of other things in the apartment) were stolen last Saturday,
- and over hte last week, a number of Cassie's friends and members of
- the online communities she participates in have chipped in to the
- drive I organized to get a new laptop for each of them, and to replace
- the toys which Ruby had collected for the Holiday Toy Collection
- Thingy at the hospital where she's a resident.
- I'm sending a check to the hospital today which will more than replace
- the toys that Ruby had collected to donate, but if you're interested
- in sending a toy or a contribution directly to the organization that
- supports the hospital's toy drive, here's the information, directly
- from Ruby's LJ 
There was a large chunk of change involved. At one point, on Heidi8's LiveJournal, the number was quoted at being over ten thousand dollars. How much ended up with Cassandra Claire is unknown. As with the issue with the profiting from the Very Secret Diaries, no accounting was provided for funds collected.
By June 11, 2005, there was a CafePress store run by OhShush.Com which was selling a poster and calendar featuring Draco Veritas.  There is no mention of the profits going towards a charity. The store was done with Cassandra Claire's permission. None of the profits from this were laid out. How much money Cassandra Claire made from this shop is unknown.
Cassandra Claire got a book deal in 2006. She again appears to be capitalizing off her fan fiction and her fannish name by publishing under Cassandra Clare, announcing it in her LiveJournal and having her fannish friends promote her book.
Cassandra Claire profited off her fan fiction.
There were a number of concerns expressed by users of Fiction Alley that in using Warner Brothers advertisements and linking to their shop as a way to generate funds, that they would attract the attention of Warner Brothers who would shut them down.
Fiction Alley's finances have also been the subject of some speculation in parts of the Harry Potter fan fiction community as they are organized as a non-profit charity. The way they are incorporated is such that they do not need to file taxes so long as their income does not exceed $25,000. As of yet, no tax returns on a state or federal level have been found. As just one of their many charity projects netted over $5,000, there is some distrust regarding their accounting and a general feeling that some profiteering may be happening. This seems to be reinforced by the amount of advertisements on the site coupled with the amount of traffic and the hawking of merchandise on the site.
Ms Marmite Lover
In October 2009, an incident occurred when a chef in the United Kingdom, Ms Marmite Lover, advertised she would be hosting Harry Potter-themed dinners in her house. She would be charging what she claimed would only cover the costs of the meal. Even so, in her blog she reported receiving a Cease & desist letter from Warner Brothers over the idea, which stated in part:
- We notice that you're planning to hold a "Harry Potter Night at the Underground Restaurant" on 30th - 31st October 2009 with a Harry Potter style menu and butterbeer (the "Harry Potter Nights") and that tickets are being sold for the Harry Potter Nights on http://www.wegottickets.com/location/2522. While we are delighted that you are such a fan of the Harry Potter series, unfortunately your proposed use of the Harry Potter Properties (as we explain below) without our consent would amount to an infringement of Warner's rights.
Ms Marmite Lover attempted to garner sympathy and support from her blog readers and the incident even was reported in the mainstream press. Reactions to the incident were mixed, although many tried to point out to Ms Marmite Lover that if she had not charged for the dinner nor advertised it prominently on the internet as she had, there would have been no incident.,,,,
Fan art is frequently sold at conventions, conventions that also sell fanzines. There have been rumblings over time that fan art violates the general rule of not profiting from fandom because many of the works of art will go on auction and sell above the cost of the supplies involved in the making of the fan art. Some of these pieces will go for hundreds of dollars.
The general reply to this is that fan fiction and fan art operate in two different mediums. The rules and expectations are thus different and the two are not comparable.
FanFiction.Net added paid accounts and advertising to its site in the late 1990s in order to help fund the site's operating cost. There was a mixed reaction to this as people feared, because of FanFiction.Net's size, that it appeared to be trying to make money, would lead to a crack down on all of fan fiction. Many slash fen were especially concerned as they felt that anti-slashers would point out the advertisements and paid accounts to a show's creator and demand they step in because "Ew! Slash!" This reaction never occurred.
There have been allegations made against some fanzine distributors like Agent with Style that the fanzine distributors were deliberarely profiting from their work.
While not directly connected to direct attempts to earn money off fan fiction, many fan fiction writers were concerned when LiveJournal started offering paid accounts. Their fear was that because the fan fiction community was so represented on LiveJournal that some of the powers that be might see LiveJournal as one big fan fiction archive with the owners trying to make money off the fan fiction writers who posted there.
There was a Star Wars fan fiction author who self published a Star Wars book that subsequently was listed on Amazon. Her defense was that she had intended only to distribute the book to her close family and friends.