This is a for-profit charitable business!
That's right! ChatFellow is not a charity, however we have charitable purposes. We talk more about this in other articles and in our books, and it's very important to mention, because the word charity is being misunderstood by the world. The legal definition of charity is an organization that doesn't focus on profits, but tries to distribute all of their money to people who are starving or poor. But what are the other definitions of charity?
The Bible talks a lot about charity. Does the Bible's definition of charity differ from the legal definition? They are basically the same. However, the part of the Bible where it talks about Jesus, He says several things about charity that makes it seem to be even more powerful, farther reaching, and deeper meaning than what the world usually thinks of when thinking about charity.
And if a company or person gives money or resources are assistance or help or love or encouragement... to another person who needs it... why then can that person be sent to prison for saying that it was charity? Does it seem strange that the limitations for legal charity are so strict? Seemingly preventing many good intentioned people from giving charity? Well, as with all laws, there are good reasons for the limitations. And as with all laws, it does end up restricting many otherwise beneficial activities and outcomes. Just like any parent trying to raise their children, it seems that no matter how perfect the parent tries to be, the end result is based on many factors that are too many for the average human to be able to control. Like a ripple on the water, you never know what waves it will create. A dominoes effect that can't always be predicted and cannot always be controls or directed. And so, we try our best, the law makes and legislators try their best. And so, any person or organization that has charitable objectives but doesn't fulfill the requirements by law of being considered a legal charity, must be sure to avoid using the word charity, or be very clear in saying that they are NOT a charity by the legal definition. Another fact is taxes, most charities can avoid paying taxes, and if a company doesn't fulfill the requirements of being a charity, it needs to pay full taxes. And people to donate to a charity, can save on taxes, if it's a charity that fulfills the legal requirements. Not all charities fulfill the legal requirements. And so you will still need to pay full taxes if you donated to an organization that doesn't fulfill the legal requirements.
But what is wrong with paying full taxes? It's just a matter of the amount of money decreasing. If half of the money goes to the government, that means there is less money to go to the poor people. And that's not the government's fault. Because it's not difficult for that organization to fulfill the legal requirements and save on taxes.
But what about organizations that choose NOT to become classified as a legal charity but rather choose to remain a regular business, but still do charitable acts? Well, there's usually no problem doing charitable acts. Just make sure you pay full taxes. And yes, it seems unfair, and the government is getting half of the money, but that's the choice and decision of the business, not the government. It's the business who chose to do it that way. And yes, half of your donation will go to the government if it's not a legally defined charity. And you also will still need to pay full taxes on that money, even the money you donated. Because the government only gives tax benefits to legally defined charities and people who donate to legally defined charities.
Why would a business choose to NOT be a legally defined charity but remain a for-profit business? We'll discuss the benefits of both, and why a business would want to remain a for-profit business. Think of the fact that many universities are non-profit and many universities are for-profit. There are benefits to both, and it all depends on what the desired outcome is for that university. The same with businesses. Some choose to be legally defined charities, which requires that they stay within certain limits. Limitations.
We pay taxes because we're a very successful business, our success allows us to put more money into charity than most charities are able to. Most charities survive only on donations and most of those donations is wasted on paperwork, professional incompetence and mismanagement, lack of experience, lack of resources, lack of connections, exorbitant salaries for overpaid or inexperienced and ineffective workers, poor shipping methods, ridiculous legalities, and over-inflated advertising.
Because they lack the know how, and connections, and expertise that only comes with years of experience in the business word dealing with other nations, governments, professionals, and how to use experts who are at the top of their field, most charities fail to deliver the results desired by their contributors.
Most charities mean well; but lack wisdom. And therefore are wasteful and lacking. Using the world's greatest talents, resources, experience, and expertise we're expanding our charitable operations to the entire world, even to the most remote and poorest regions. Using tried and true business methods we cut costs, take the sure way, total efficiency, no loose ends, no waste, delivering the full amount, not just what's left over.
This is my gift (even without profits and contributions I would gladly continue giving this gift freely) to the whole world! I'm giving you my language scripts, and showing you how to make your own. So you can speak the Dominant Global Languages that I provide, and any others that you want, all for free!
I'm making our world more united. By global communication. Empowering people; all 7 billion of us. Better communication makes everyone more successful and happy! Visit me everyday at my website or other locations.
This is a charitable business!
We are not a charity. We are a for-profit business that pays taxes. However, we have charitable objectives. The reason this company was created was because we wanted to make the world a better place, empower all humans everywhere, saving millions of lives.
If we did the math we'd realize that businesses don't make additional income by participating in charitable endeavors. The tax breaks don't allow businesses to save money. That's a myth. What's actually happening is that the money given to charity is being inflated by the government through tax breaks.
And so every dollar given to charity becomes worth more than a dollar. Not to the business, but to the charity. If a business is pocketing any of that charity money, it would be seen, because governments audit charities very intensely, and the results are published regularly for the public to see!
It simply would not be worth the risk.
Businesses make much more money doing business than by contributing to charity. And so it would be hard to find a business that is profiting at all by contributing to charity.
And so we should applaud and praise those companies that participate in charitable endeavors. And should hope that more businesses will do likewise.
Because while these tax breaks don't allow companies to increase profit, tax breaks do allow the company to contribute more to charities. Because the tax breaks are on the money that's given. So the company doesn't gain anything.
The charity, not the business, profits.
Tax breaks allow the government to also participate in charity.
Because the money the company gives to charity is basically being almost doubled by the government not taxing it. So the only person getting more money is the recipient of the charitable contribution. Not the government. And not the business.
The only savings is that the business can now give less, rather than more, to charity. Because the government is basically matching that amount up to 30% in some cases. So the business can give less, because every dollar is being inflated by the government, so it's worth at least 30% more than the average dollar.
So in other words it's not profitable for a business to contriubute to charity, but also it's a savings because the business can contribute 30% less. Or in actuality what happens is the business pays 100% but then the government gives the business 30% back during tax time.
You see, businesses don't profit from giving to charity. The only benefit would be publicity, a good reputation, and good feelings. If they're pocketing any of the charity contributions it wouldn't be worth the risks because charity contributions are audited much more viciously by the government than any other type of money transaction and the investigation results are published publicly for everyone to see.
We're trying to educate the public and businesses about the facts so that more businesses will feel comfortable contributing to charity and so that it won't be a negative impression in the minds of the public who often has the wrong idea about businesses that contribute to charity.
It's not about tax savings at all. And furthermore, the public needs to be aware that many charities do pocket the money! Legally charities are allowed to keep up to 60% or more of the money so that it can be spent on the expenses of the organization and in the form of salaries to the employees of the organization such as the CEO and managers and so on.
And so, what's the difference between a non-profit charity and a for-profit business? Well, the charity profits from the charity. A business doesn't profit from charity. That's the difference.
There are charities that give as much of the money as possible to the intended recipients of the charitable contributions. And, before we think poorly of charities lets remember that even if a charity only gave 20% of the contributions to the intended recipients, that's more money than what those starving children in Africa would've recieved otherwise!
And some charities do give 80% or more.
We pay taxes because we're a very successful business, our success allows us to put more money into charity than most charities are able to. Quite simply because businesses have more money to give for their own pockets.
Often in the billions of dollars range.
Whereas most charities survive only on donations and most of those donations. Which rarely are in the billions of dollars range.
Furthermore, much of a charity's budget is wasted on paperwork, professional incompetence and mismanagement, lack of experience, lack of resources, lack of connections, exorbitant salaries for overpaid or inexperienced and ineffective workers, poor shipping methods, mishandling the legalities, and over-inflated advertising costs.
Mismanagement of money.
Most charities unintentionally lose and/or waste everybody's money. Because typical charities lack the know how, and connections, and expertise that only comes with years of experience in the business word dealing with other nations, governments, professionals, and how to use experts who are at the top of their field, most charities fail to deliver the results desired by their contributors.
That's why many charities hire an experienced business CEO.
Unlike many charities, because we're a business, we're using the world's greatest talents, resources, experience, and expertise we're expanding our charitable operations to the entire world, even to the most remote and poorest regions. Using tried and true business methods we cut costs, take the sure way, total efficiency, no loose ends, no waste, delivering the full amount, not just what's left over.
My company was created for you! The person who wants to give more to the world. You want to save our world. And my company was created for those who have nothing to give. Those who are struggling to survive. And for those who want more out of life. Every human deserves to have a great life. That is the objective of our business.
This company, our product, and our contributions is my gift (we don't accept donations and we try to produce results from the labors of our company and the value of our products and the appreciation from our clients) to the whole world! I'm giving you my language scripts, and showing you how to make your own, so that you can have a better life!
You now can speak the Dominant Global Languages that I provide, and any others that you want, all for free! So that the whole world is now unlocked to you, and openned up for you, for greater career opportunities, greater income possibilities, and all of life's rich rewards.
When you take advantage of our products, even the free ones, and tell others about us, you're giving all of that to others, to the whole world!
I'm making our world more united. By global communication. Empowering people; all 7 billion of us. Better communication makes everyone more successful and happy! Visit me everyday at my website or other locations.
You're doing that also. I'm using these free products also! You and I are not different. We are a part of the same endeavor. You are a very real part of this family. This charitable endeavor. Thank you for caring about others. And more importantly, thank you for caring about you, because if you're not strong, if you're not successful, how can anybody else be? We must all be strong, together!
Keep reading! Here's more information about our charitable obectives and the realities of what is a charity versus what is a business and how can a business be charitable while not being legally definable as a charity. Why can't our business be defined as a charity?
Our business is not a charity.
An article in www.theguardian.com by Alison Coleman in July of 2013 describes several amazing businesses who have made charity a major part of their business endeavors and have been very successful in making the world a better place.
These business however are legally defined as charitable businesses.
These business prove that "charity makes good business sense," and that, "a philanthropic venture will make a difference."
However our company isn't legally defined as a charity. Because first of all, we pay taxes as a business, not as a charity. And furthermore, our business isn't a venture. No, our company is a well established business that's already been up and running for quite awhile and successfully.
That's very important.
And we're not worried about increasing our profile or gaining more customers by making ourselves look good by using charity "as a promotional tool for our business."
But I believe that most charities, most charitable business, most for-profit businesses that participate in charity or charitable endeavors and have charitable objectives are actually doing so for the right reasons. Very few businesses can show statistically how their charitable endeavors are increasing their profits from a marketing persepective.
It simply wouldn't be worth it.
Because to give to charity costs so much that even the best marketing results wouldn't compensate for the expense. Businesses don't invest in marketing that doesn't cover itself costwise. That's simply a rule of thumb for any industry.
More often than not, rather than any appeal, the thing that caused businesses to even consider contributing to charity or pursuing charitable endeavors was not just the low cost/expense of dollars contributed to charity (the so-called savings from tax breaks) and so on, was quite simply the good feeling itself that the act of charity produces, was the thing that when placed on top of those other things, made it hurt less and so the business agreed to do it.
To say that a company benefits from an improved reputation or public appearance by contributing to charity is negligible by the fact that most people believe companies are getting huge tax breaks and profiting from it. That impression instead gives the company a bad reputation and evil appearance. Companies don't profit by giving to charity.
Least of all in public sentiment.
On the contrary it seems to villify them excpet in the rare case when their charity really does something unique and truly shines such as saving a baby's life, or rescuing a community from a tsunami etc. Something that most charities are not capable of truly publicising in a way that wouldn't just vilify them that much more for appearing to be exploiting the child etc.
Businesses don't benefit from image enhancement.
No, we were already providing charity to the world long before we decided to start telling everybody about the charitable activities we're involved with (we don't claim to be a charity; we're a business that has charitable objectives and we're definitely for-profit). It just made sense to be honest and say the truth about what we're doing.
We're very cautious to point out that we're a "for-profit" business. Because legally we don't claim to be a charity. Because legally we don't get any tax breaks. However we're proud to officially declare and defend the fact that we're benefiting humanity and the entire planet greatly! And we wouldn't dare say that we're a charity oriented business unless we indeed provide charity. And indeed we do.
However the laws so-far prevent businesses from calling themselves a charitable business without abiding by certain laws that quite ridiculously are often restrictive, and even prevent profitability, productivity, and even the charitiable endeavors! What irony!
Regulators are so scared that a charity might be pocketing the money and scaming people, that the laws are so restrictive that it literally prevents a charity from being very effective. And in fact, most charities do end up pocketing 60% or more of the money, or blowing it on exorbitent and ridiculous organizational expenses and costs.
Legislators demand security to the point of building four walls around ourselves, no roof, just tons and tons of rock, deep underground where we'll be safe, fossilized, and secure forever.
Allowing charities to stretch their arms and legs, true freedom, ability to expand, and truly succeed. That would be the greatest blessing to humanity ever! It might even invite charities to stop hording so much. To stop paying the CEO so much. If they were allowed to actually act and think like a charity rather than focusing so much of their time on legal issues.
Much like a politician who must focus 80% of their time in office on campaigning to stay in office, it's ridiculous! Legislators need to be more careful and wise. They need to focus on benefiting humanity, rather than building walls. Prisons are great. But schools are even better.
I would gladly turn my company into a charity, if charities were not provented from being successful by so many ridiculous restrictions.
And so, there are two, instead of one: Charities, and Businesses.
But down below I'll quote an article that discusses the need for having both. And that charities cannot address all the issues that humanity requires. And that businesses likewise, cannot address all the issues that humanity requires. And so, perhaps it's good that there's a few lines drawn between what is a charity and what is a business.
Our company is unique.
Our core product is free and makes a person's life better, which in turn benefits their family. A stronger family benefits the whole community. The dominoes affect goes on and on as stronger communities in turn benefits the economy, then the nation, then the entire world.
Is this not a charity?
An article in www.forbes.com by Jacquelyn Smith in July of 2013 revealed "America's Most Generous Companies." discussed all the good that a business can do for charity.
Wells Fargo gave $315,845,766 cash to 19,500 nonprofits and schools nationwide.
These certainly are not the only, and that list wasn't exhaustive, merely only showing companies that were compelled by law to reveal their stats, because a company that wants to save on taxes by making charitable donations must by law report those donations.
Our company on the other hand doesn't hide behind charity, our purpose isn't to save taxes. We're contributing to the world because we want to contribute to the world, it's that plain and simple, there's no other reason. Wells Fargo wasn't hiding behind charity either. The tax savings mentioned wasn't on any of Wells Fargo's profits, but rather the amount that was given to the charity, the charity was recieving the savings, not Wells Fargo.
Tax savings has nothing to do with it.
And yet the public, most people, believe that the reason businesses give to charity is to increase profits, and mathematically that's not true. An accountant could explain it much better. The company is saving taxes on their profits. The only savings in on what's being given away. And once it's given away, it's gone. Zero. And so there's zero profit to the company that gave that money away. No money is going into the pocket of the business. It's all going to the charity. Zero profit.
However, the public still thinks that way. And that's why we brag that we pay taxes, to prove that we are charitable for legitimate reasons. We don't contribute to other charities. Because that money would be tax free, or have tax breaks on it. And the general public believes that is an evil practice. And so we never claim our business as a charity, we claim that we're a for-profit business, and we don't brag about giving to other charities.
Rather we labor for ourselves.
Abbie Rumbold of Bates Wells & Braithwaite, a firm specialising in charity and social enterprise, explains: "A registered charity can still be a business." The nice thing about these for-profit charities is that "they don’t take handouts, but instead earn their income through providing services."
And by providing services and products and working like a regular business, we look like we're putting our money where our mouth is, and laboring hard. We're working towards a better world, not just contributing a handout towards it. We're in the thick of the battle. We're in the coal mine and digging right alonside all of the other laborers.
That reference up above about ARBWB was found in an article at "Startups.co.uk" in March of 2009 and went on to say that "A prime example is Action for Children, a charity that has been around for 150 years," and, "makes almost 90% of its income comes by providing social care services."
The problem with declaring your business as a charity for tax purposes and legal purposes is that the laws are very restrictive for charities to ensure that they're doing exactly what they promised to be doing. Ironically, this means a charity has very few options for branching out into other areas, being innovative, and generating possibly much more money.
For example, "if their primary product is education, they can't sell cookies." That's just one small example of how a charity's hands are tied by laws. It's much easier for a business to operate, generate profits, and then contribute to a charitable cause, than it is for a typical charitable organization. "To get around trading restrictions, many charities have a trading arm." Or, "businesses have a charity arm."
So, while we're a business, and for-profit, we're still indeed a charitable business. Yes, we have charitable purposes, and we give charity (free products that make people's lives better and the world), but we don't waste our time and money trying to avoid taxes.
Stanford's online review states, "Is Business the New Charity?" And argues that we mustn't confuse the two, in the June 2012 article by By Aaron Hurst. However he goes on to mention for example Jim Koch, founder of Samuel Adams (Boston Beer Company) who by supporting small businesses instead of [charities], he can create jobs in the community; real long-term economic and social value.
And also mentions, "Goldman Sachs' 10,000 Small Business campaign."
And quotes Robert Egger, founder of the PAC CForward, which champions the role of the [charity] sector in the economy, “Any organization that provides [well paying jobs] is a social enterprise (i.e.-charity).”
Rather than spending time and money trying to avoid taxes, or collect donations, my company's efforts are much better spent by trying to provide a great product that's free to the people of the world. As free as possible and as beneficial as possible. A product that in turn helps them to be more productive, successful, and earn more money for themselves.
Rather than giving people money, we give people a better life, which in turn enables them to make more money on their own. Don't give a person a fish, instead, teach that person how to catch fish for themselves.
And yes, we provide jobs, we do everything we can to give our profits back to the community in ways that are most profitable for the community, sharing it with regular people, as much as possible. We never claim a loss on our taxes. We love paying taxes. And we love giving back to the community.
Aaron Hurst rightfully goes on to say that our society has needs that can't be met by businesses alone, for example that, "while creating jobs we might run out of employees; and the training they need to meet the needs of the company."
And I agree with Aaron Hurst, later on down below I'll discuss the failures of the typical charity but then even further on down I'll discuss my gratitude that strictly charitable (non-profit) organizations exist; because in spite of their huge flaw they still accomplish their mission to an extent.
And not all charities have that flaw.
It's not a requirement. It's a choice. I agree with Aaron Hurst because like he said we need more than just businesses. There are needs that cannot be met by a business. There are needs that can't be met by a charity. We need both, we need everything, we need all the help this world can get.
Or in other words: It doesn't just stop at businesses. But we can't rule out businesses as a charity. We need both!
And somebody (Tracy Sparks) even pointed out in the comments of that article that, "the model of pro bono invades the economic opportunities of the educated and unemployed." Great point!
Just to give a shoutout, Aaron Hurst co-authored the children’s book Mommy and Daddy Do It Pro Bono and is a featured blogger for The Huffington Post.
And Jacquelyn Smith went on to write in the Forbes.com article I've been quoting several times already that, "Walmart gave away 421 million pounds of food in 2013 and has donated more than one billion pounds since 2010." In paraphrasing, "Walmart's mission is to create opportunities so people can live better," and, "make a positive impact in the communities Walmart serves."
Walmart, Wells Fargo, Chevron are just a few companies that gave nearly or over $300 million dollars in charity in just one year alone. "Pfizer gave $3.1 billion in cash and products."
It might seem that they're doing this to save on taxes. But ultimately, they could keep a huge percentage of that money, if they didn't spend it on charity, even after taxes. The truth is, it just feels good to serve the community and make the world a better place. Aside from all the less significant secondary motives possible for giving to charity.
You can see for yourself at www.snopes.com/politics/business/charities.asp that charities often pocket most of the money and very little arrives at its intended destination.
Just to highlight a few:
The CEO of the charitable organization known as UNICEF receives $1,200,000 per year, plus use of a Royal Royce for his exclusive use where ever he goes, and an expense account that is rumoured to be well over $150,000. Less than $0.14 per dollar donated to UNICEF goes to the UNICEF cause.
The CEO of the American Red Cross gets $651,957 per year plus expenses, enjoys 6 weeks of fully paid holidays including all related expenses during the holiday trip for her and her husband and kids. Including 100% fully paid health & dental plan for her and her family, for life. Less than $0.39 per dollar donated to the American Red Cross goes to the American Red Cross cause.
The list goes on and on...
Here's some humor, the charity known as "MARCH OF DIMES" is called the March of Dimes because only a dime for every 1 dollar is given to the needy.
I won't list the charities who are faithful in getting 100% of the contribution to the contributor's intended destination. Because that could change, and then I'd be giving misleading information. You just need to do your own homework before contributing to any charity.
Ultimately, a charity that gives 50% or even just 5% of its income to the contributor's intended target, might still add up to billions of dollars being given to the rightful recipients of charity.
That, when compared to the billions of dollars being given by legitimate businesses, might not be much different. It's better than nothing being given at all. I'm certainly grateful for the American Red Cross and UNICEF for all the good that they do accomplish.
I'm happy that there are literally a million charitable organizations in the world ready and willing to take your hundreds or thousands or millions of dollars, pocket up to 95% of that, and give at least 5% to a charitable cause.
Because 5% is better than nothing! But I sure wish that you could keep that 95% that you gave them, rather than it going towards their exorbitant expenses and their CEO.
Hopefully the day will arrive when all businesses become charitable. Even if for profit. Because I'm certain that there are more businesses than charities in the world. Nobody would be asking you for donations. The businesses themselves would be the contributors. That would truly be a turning point for the world, towards a more perfect outcome.
Evangeline Gomez wrote in her article for www.forbes.com by Alison Coleman in January of 2012 that, "many Americans, and millions of business owners, want to do more than simply turn a profit." And discussed, "The Rise Of The Charitable For-Profit Entity."
She even went on to say that, "a study shows more than $120 billion in potential investments" is what these businesses could generate for charitable cuases. These businesses often referred to as a "benefit corporation, L3C," or socially-minded company.
Of course, that study represented investments that were available for the creation or support of those companies, not what the company would in turn give to charity.
However, I went ahead and did that math, assuming that a company attempts to recoup the costs of creation within the first 5 years, while profiting each year, and giving to charity each year during its existence.
Also most companies don't recieve investments totaling the full amount of the cost of creation, banks and investors simply would not do that, as a governing rule. And so $120 billion is far short of the actual value and profitability of the "many Americans, and millions of [companies]" this article is discussing.
At the bare minimum, collectively, they should be able to give at least that much. As is, hundreds of major corporations are giving $300 million dollars per year towards charity.
She pointed out that, "Still questions remain on these new corporate entities." Laws are being amended, new roads are being paved, to make way for these new ambitions of companies wanting to give more, benefiting society, and the world.
Also see: Acs, Z.J. et al. (2010) The social value of productive entrepreneurship, George Mason University, Washington
And as expounded By bevmeldrum in a September 2011 article titled, "Charity vs Social Entrepreneurship – 5 Differences".
He makes some interesting points, for example: "The purpose of charity is to alleviate immediate suffering rather than deep social change." However, I'm of the opinion that charitable organizations and charitable businesses can accomplish not only both, but so much more!
Also see: The CNBC article by Jake Novak in August 2015 at http://www.cnbc.com/2015/08/03/mixing-business-with-charity-is-folly.html where he makes a great case, "The man who tries to make his business a charity or his charity a business will end up out of business and needing charity."
Why I bring that up, is it shows that businesses can also have flaws, and make the wrong choices when it comes to charity. And some do in fact use charity merely as a means to avoid taxes or "as a tool for marketing."
Which is why we must always do our homework before contributing to a charity. Whether it's a charitable non-profit or a charitable for-profit. What's the largest non-profit entity in the world? Universities? Some are. You see, it literally pays to do your homework.
Universities are a good example of how, when dealing with organizations, and how to classify them, whether as a business or a charity, it really just comes down to legalities. Laws are structured for the purpose of keeping everyone safe. That includes businesses, people's property, everyone. Literally anything could be considered a charity. But for the sake of keeping people's money safe, laws are in place, that prevent companies from claiming to be a charity, who might not fulfill that role.
Jake Novak rightfully explained, "Both charity and free market capitalism are noble goals. But confusing them or favoring one too much over another is a pathway to ruin." And that, is exactly why, we're very cautious to point out that we're a "for-profit" business. And wouldn't dare say that we're a charitable business unless we indeed provide charity. And indeed we do.
However the laws so-far prevent businesses from calling themselves a charitable business without abiding by certain laws that might be restrictive, even prevent profitability, productivity, and even the charitable endeavors!
But to further prove that we're not interested in avoiding paying taxes, we don't claim to be a charity when filing our taxes. And furthermore we don't want any of the restrictions that comes along with claiming to be a charity.
We're a for-profit business. Not a charitable business. We're a for-profit business that has charitable objectives. And we believe that we do very well in meeting those objectives; better than most.
A study shows more than $120 billion in potential investments for socially minded companies. While benefit corporations do not enjoy any federal or state tax benefits that are equivalent to charities, and some cities and states do grant them some tax advantages. Some business structures are now a hybrid between a non-profit and for-profit corporation, possessing the same liability protection and pass- through tax treatment as an LLC but must have a primarily charitable purpose with profit making as a secondary purpose but can distribute post-tax profits to its owners. The income they generate is fully taxable, and contributions or investments directed at these entities are not deductible as a charitable contribution to donors. Surely as the number of these new forms of charitable businesses continues to rise we'll see the financial community increase funding and investing for these types of companies.
See full article here:
Your charitable gifts are good for humanity, and they can benefit your company. In the quest for a great work-life balance, it is important to many A-list candidates to be employed by a company that gives to charity for these very reasons. Some companies have been known to give their employees matching bonuses, meaning, when the employee receives a bonus for exceeding his or her sales quota, a donation of the same amount goes to a charity of the employee's choice. This gives workers an added incentive to achieve higher results for the company. By sponsoring a worthy charity, you're presenting your company in a positive light by demonstrating to the members of your community that you care about them. Through working for charitable causes, you can create new contacts and immediately have something to talk about with them. It also gives you a regular platform to help maintain those relationships. Consumers appreciate and support socially conscious businesses because it causes them to become emotionally invested. In fact, customers are 85 percent more likely to buy a product that is associated with a charity.
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Is For-Profit the Future of Non-Profit? That was the logic Lauren Bush Lauren articulated in a 2013 interview about FEED, a for-profit entity she founded that creates simple, eco-friendly tote bags whose price covers the cost of donating school meals to children in Rwanda via the UN World Food Program. Her interviewer was Matthew Bishop, editor of The Economist and co-author of Philanthrocapitalism: How the Rich Can Save the World, perhaps the most prominent advocate for nonprofits to adopt business strategy and technique to fulfill their missions. Bush Lauren’s rejection of charity in favor of a commodity exchange echoes comments by her counterparts at PRODUCT (RED), a marketing partnership that brands products by Apple, Gap, Starbucks and others as (RED) and donates a portion of those profits to the Global Fund to combat HIV/AIDS, malaria, and tuberculosis in Africa. Among the most prominent “cause-related marketing” initiatives, its president, Tamsin Smith proclaimed, “(RED) is not a charity. It is simply a business model.” Bobby Shriver, one of the co-founders, told the New York Times. According to Shriver and Bush Lauren, our convenience is the world’s benefit—and we shouldn't feel guilty about our materialism. Cause-branded marketing, in this argument, is far more effective at channeling money to fight disease and hunger than charity. People don’t donate as regularly and generously as they spend on shopping, and, with cause-branded marketing, the pitch sidesteps “begging” and “emotional appeal.” Instead, (RED) directs its energy towards stressing the ease with which consumers can engage. Shopping is woven into our everyday lives, so why not automate the process in a way that benefits consumers, corporations, and the world’s poorest and most ill? This blunt pragmatism is hard to resist. In September 2011, a group of young idealists (and, counting myself, at least one journalist) gathered to strategize about how to create a better world and to examine the influence of corporations and the market on our society—but it wasn’t Occupy Wall Street. At the Next Gen: Charity conference, ten minutes away from Zucotti Park, keynote speaker and clothing mogul Mark Ecko proudly declared that “the future of non-profit is for-profit.” The biggest names in Silicon Valley seem to agree, with Pierre Omidyar, Larry Page, Sergey Brin, and Larry Ellison backing Not For Sale, an anti-human trafficking and anti-slavery organization currently developing for-profit products such as soup, denim jeans, and a phone that would theoretically produce ongoing revenue for their advocacy efforts.
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Charitable giving is rising each year by more than 5%, and most of that is happening through large companies, not just charities. And online giving is growing by 10% and most of that is through small businesses! Today’s small businesses want to make a difference. Charitable giving is growing among small businesses. CEO of Wolf Commercial Real Estate explains it best, "We integrate charitable giving into our business because the community we work in is also our home."
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