> non-profit business

That's an oxymoron if I ever heard one. A business is literally an activity that is undertaken for the purpose of profit. There are activities that are entered for reasons other than profit, but they're not businesses.

Yes, from a taxonomy perspective, you are correct. I'll edit to be precise because the definitions don't change the point of my post.

Depends on the definition. If an organization is arranged as, say, a limited-liability company, then it is a business no matter what its goals are. And "profit to shareholders "is neither definitional nor mandatory; the value produced can be whatever the shareholders want it to be. Of course, most of the time it’s profit.

If it is an LLC, then each employee would have to be a member to exercise control and have the legal standing to request profits from the company. An LLC does NOT have a requirement to maximize shareholder profit because there are no shareholders, just members. An LLC has a max number of members and members are required to maintain their portion of tax liability (this means they will owe a % of tax due or receive a % of tax refunds). This overwhelmingly means employees are NOT part of the LLC, as all it would take is one employee not paying their taxes for the entire LLC to be at risk (also this is why investors will run like the wind from an LLC raising money). An LLC CAN have an employment contract where they offer paper shares, which can translate to profit sharing but they are called paper shares because they are unsecured debts and are literally worth nothing in the event of bankruptcy.

They could be a C corp (could also be an S corp but that comes with a 100 share holder limit), but then they have a duty to maximize profit to the shareholders. In a private corporation, the shareholders may be less inclined to sue, but the option is still there and as such the CEO must work to ensure the company is profitable. If they decide to share all profits with the employees, and the employees are majority shareholders, then this likely falls within the sphere of maximize profits.

There are things like a publicly-traded LLP which allows employees to own a portion of the company while offloading tax liabilities to the shareholder, but that is usually limited to companies which depend on depleting natural resources (think oil, gas, coal, lithium, etc)

Any multi-party LLC I've been part of, and it's been more than a few, has provisions about tax liabilities and allowed the LLC to forcefully pay them. Additionally, LLCs rules would control equity holde payouts, and provisions around equity liquidation.

LLC rules do not apply during bankruptcy. Equity holders are unsecured in bankruptcy, employee salaries and secured debts have a higher priority.

You can have provisions about tax liabilities, but that is a specific risk that must be mitigated in an LLC that a corporation does not have to deal with, thus it’s an added risk

I work for a business owned in whole by its employees. Its goal is to pay its employees a good salary and generally act in the interest of the employees in addition to providing its core services to its customers. There is no pay out of any profits (by design), but it's a commercial enterprise (i.e., a business) nonetheless.

So the employees profit

Hey now let's not being technical correctness in to this!

Peanut gallery comments really don't add anything to the conversation. Unless this isn't sarcasm and your point is that being technically correct is practically worthless.

My point was that when commenting correctness by technicalities people often leave themselves open to dismissal in favour of more emotive arguments.

A "How dare you be technically correct!" variation is both an expression of mob-correctness trumping technical correctness _and_ an acknowledgement of being technically correct.

A sort of, you're right, I support you, but the crowd might not.

Read shit how you like tho

Not more than in any other company, with the exception that the company puts its employees needs first (but this is not exclusive to companies like mine).

Even non-profits provide a 'profit' to employees in the form of a salary. It's not like they all work for free.

No, the employees are compensated for the time they spend working. My salary is not a profit, it’s an exchange of services for goods. My stock dividends ARE profits, excess revenue disbursed by the company to its shareholders.

My comment applies to a business owned in whole by its employees, as in the comment I replied to.

Perhaps for legal purposes that is not considered profit, but it is obviously exactly profit - the business paying money to its owners (who happen to be exclusively its employees).

The business doesn't pay its owners a cent. It pays its employees (who happen to be the owners) a salary.

In a business where profit is used to pay shareholders/owners you don't count the regular salaries as 'profit paid out' either. This is no different; any profit we have is reinvested (while financially stable, there has been no occasion where the profits exceeded the amount prudent to reinvest in growth or other factors).

What happens if the company makes more money than it pays salaries for some reason? I assume in this case and your description, the salaries are adjusted accordingly.

If so, then the word salary here is just another word for owner dividends, at least to some extent.

Those are referred to as "retained earnings" (occasionally: accumulated earnings, retained capital, or earned surplus), and accrue to the not-for-profit organisation's balance sheet.

<https://www.wikiaccounting.com/retained-earnings-for-non-pro...>

<https://insidecharity.org/2018/05/18/earned-income-for-nonpr...>

Note that this may occur on a short-term basis given normal market variability, or over the long term The latter case is more interesting.

In the short term, such business profits simply accrue to accounts, and are typically held as cash or cash-equivalents.

Over the medium term, funds may be moved to various forms of generally-liquid assets (government bonds, equities, etc.), as part of the organisation's money-management strategy.

In the long term ... the organisation gets to decide how to invest those resources. There are several options:

- Increase wages, as you suggest. This is of course only one option.

- Increase benefits. Healthcare, daycare, commute / housing / educational supports, etc.

- Expand workforce. Hire additional employees.

- Expand business. This might entail expanding or improving a location, opening additional location, going into multiple lines of business, or aquiring other organisations.

- Expand endowment. This is particularly the case for many educational institutions, and those endowments may range into the billions of dollars.

Generally you'll find these options discussed in a long term capital plan or similar strategy document.

For specific forms of business organisation, such as a co-operative business (which may or may not be a not-for-profit organisation), there may also be dividend payouts to members. My understanding is that these are not equivalent to stock dividends, though I'm hazy on details.

What you don't see for non-profits, however, is a mandated and frequently automatic form of return to shareholders, through either stock dividends or inflating the value of a joint stock issue. That cuts two ways: not-for-profits don't have the financial drag of spilling out money to investors, but they also typically have less access to financial capital markets.

Everything you've listed is either profit for the owners, or ensuring future profit for the owners.

I wonder what kind of business this is? Is everyone paid the same salary?

Sounds like a great place to work, I wonder how does it look like in practice.

Software as a service for healthcare. We do vary salaries based on experience and function, but there is not much of a difference between senior devs and management. We're only a small business of 10 to 20 employees though. It works reasonably well (and we're 15 years old by now); the biggest threat is external market conditions and compliance requirements (because healthcare just is a demanding field).

I bet you get more done with 20 employees than most conglomerates do with 2000. Better incentives.

Robert Bosch GmbH would be a good example.

It's a worker's co-operative. There are all sorts in the US. In SF there are (or were) supermarkets that are organised like this.

If we're talking about the United States, it's not an oxymoron at all. I've got some extremely profitable 501(c)(3) non-profit organizations I could show you. Autism Speaks comes to mind. They may not be making money for public shareholders, but they're making a lot of money for the people who run them, all the same.

Also plenty of organizations look like businesses in every way except their tax status. Thrift stores, for example. Goodwill isn't a nonprofit anymore, but even when it was it also employed all the same abusive labor practices and suchlike that you'd expect from a for-profit business.

>I cannot see one reason why Facecrook, Twits, or Spreddit requires a for-profit business model. Can you?

Web hosting ain't free, especially at their scales.

That's not what nonprofit means. You can still make money to cover expenses, you just don't go past that.

Nonprofits try really, really hard to make money well beyond their near-term expenses. Wikimedia Foundation is (in)famous for this.

First, they want a rainy-day fund to cover fixed expenses when income fluctuates. Second, and more importantly, they might want to create a massive endowment that provides them with stable income so that they're not beholden (or accountable) to donors or their usual business partners.

The only difference, at the end of the day, is whether they ever want to IPO.

The other reason a non-profit tries to more than cover its expenses is to accomplish its mission.

The point of non-profits is that their goal is to accomplish something other than profiting. Sometimes the goal can cost a lot of money to accomplish, often much more than just the cost of paying its employees.

For example a non-profit that raises money for cancer research might have very low costs and raise tons of money without raising eyebrows. Because they put the majority toward their goal, and everybody understands the goal, and "profit" is not that goal.

An interesting experiment would be to make all companies non-profit. Could you imagine that world! I wonder if there would be less spam.

Non-profits also typically have extremely well paid BoDs/VPs/C-suite, most hired through nepotism. They're all incentived to maximize revenue as they still get bonuses.

They're actually a great example, they have a defined amount of financial runway they maintain, and they don't exceed it. You might notice they don't leave the fundraising banners up all year.

Non-profit in a capitalist society? Seriously? This ain't Star Trek.

Living in an unregulated capitalist society doesn't mean we should reward people or companies that are racing to the bottom putting values and customers aside, once their market has been "cornered" (these companies bet on the unlikelihood of users being incensed enough to dethrone their monopoly).

Silicon valley is based in a country that balks at universal healthcare FFS. And I have no faith in the techno priest class that is just as corrupt as the Jesuits of old. They'd sell out their principles for a Lambo as we have seen time and time again. But stay positive if that's what keeps you sane.

Non profit doesn’t mean no profit.

Motivation. Why would you inflict social media on people absent the get filthy rich carrot?

Actually a pretty good point.