Comment by RobertoG
8 years ago
For profit or non-profit, makes a huge difference, in my opinion.
The goals and the incentives are very different.
8 years ago
For profit or non-profit, makes a huge difference, in my opinion.
The goals and the incentives are very different.
Isn't Mozilla organized as a for-profit that owns a non-profit? Actually, if you look at US tax law there are reasons that some non-profits have for-profit parts. I know Mayo was organized that way. I think it had to do with some salary requirements, but its been twenty years, so I'm a bit fuzzy.
There is a non-profit (The Mozilla Foundation, affectionately referred to as "mofo") which owns a for-profit (The Mozilla Corporation, known as "moco") as a wholly-owned subsidiary.
The corporation is governed by the same rules as the foundation, compare https://www.mozilla.org/en-US/foundation/
> Our work is guided by the Mozilla Manifesto.
to https://www.mozilla.org/en-US/foundation/moco/
> The Mozilla Corporation is guided by the principles of the Mozilla Manifesto.
(I'm an employee of moco, I've always felt like I'm working at a values-based rather than a profit-based organization, personally.)
I guess my point is that the profit status might not be the most important thing to determine what values your organization has.
The Mozilla non profit is the owner of a for profit company that carries out much of their activity. Which you probably meant, but you've typed it the other way around.
Yeah, I meant in the same way as Mayo (NP -> FP). Not enough coffee, thanks.
Sure, as stated in the articles of incorporation. Many states offer an in-between type of corporation called a benefit corporation. It is for-profit, but the articles of incorporation require it behave, additionally, with social benefit in mind. And they are obligated by their charter, and can be dissolved by the state responsible for the entity's creation, if they don't follow it. The public would have some degree of standing that wouldn't necessarily apply to other corporations.
Technically, non-profit only means that the corporation is not allowed to directly redistribute profit to it's shareholders. This reduces the amount of pressure from shareholders to generate large profits, but still even non-profit corporation has to pay it's expeditures somehow and not lose money doing so.
> This reduces the amount of pressure from shareholders to generate large profits
Just to clarify, since this sentence was ambiguous: not-for-profit companies do not have shareholders or owners. So the fact that there is no "pressure from shareholders" is vacuously true, because there are no shareholders.
Not-for-profits typically have donors and boards of directors, who both apply pressure to see the corporation's funds used to realize its mission.
When I wrote that sentence I thought about changing "shareholders" to "members" or "stakeholders", but then I left it as it was because it seemed to more clearly represent the contrast or absence there of to for-profit corporation.
I'm board member of smallish Czech non-profit and one of the things I've found out is that the legal requirements on the corporate governance structure are mostly equivalent to what is required for publicly tradeable corporation that is actually not publicly traded, thus for me it makes some sense to equate voting members to shareholders.
In the usa, most 'non-profit' are specifically orged for making huge profits. AAA would be a prime example. The church of towing cars some call it for using the loopholes.