Everyone loves companies that are non-profit because it sounds and looks good to people. A major advantage of declaring your organization non-profit is that they can still trade at a profit and are tax exempted. Also the top people in the organization can inflate their wages and obtain gifts that can worth hundred of thousands of dollars.
NPOs look great in the eyes of the public because they look admirable since they are not out to make a profit (excluding the inflated wages). NPOs are recognized more easily by the public and may be able to network much more easily and quickly than the average company. More coverage may be given to NPOs because their jobs are to help people.
Doing a strategic change where you start out as an NPO and then turn it into a profit organization when the timing is right can be really beneficial. It is a great marketing and business strategy to obtain the early advantages given by NPOs until you are strong enough to become a profit organization. By the time you reverse your role you will have a huge client list at your disposal as well as all those networking you had done when you were still NPO.
The clients list and the networking you had done while you were a NPO are the most crucial advantages after you have become a profit organization. Clients who had dealt with you before will keep coming back for more and all the networking you had done will give you future businesses.
5 Comments
Interesting. But aren’t there some ethical challenges to this strategy? And will our client stick if our objectives are no longer politically correct?
There shouldn’t be any ethical challenges if there is integrity. Objectives after becoming a profit organization shouldn’t be too different from when it was a NPO. If you have to change the objectives, try to reinforce it to the primary objectives in some way so it wouldn’t be too different.
I just read an interesting article on Mike Ditka’s Charity for former NFL Players living in rough times*
A Big Stink was raised cuz of the $1.3 Million Dollars raised over the past 2 or 3 years Only $57,000 was provided to Needy Players*
I also think it’s disgusting + despicable that some of the Major Charities Pay their Executives outrageous Salaries! Most of these Clowns are well-heeled High Society types to begin with who in reality don’t need the Money or the frigging Job*
Hopefully this won’t preclude People from Giving out of the Goodness of their Hearts cuz most Charities represent Good Causes where Folks actually Need every Penny being raised!
Peace*
Indeed, it kind of breaks my heart when only a portion of the money is given to the needy from some of the charities. There also should be a salary cap for NPO executives. It is a good way to provide a positive image back to the NPOs.
A salary cap is a great idea