What ideas are better left for non-profit?


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I have recently been working on a site which showcases open source projects. My partner and I have discussed business plans (with premium services and whatnot), but finally decided to keep the project as completely non-profit due to the ideology behind the subject matter that we would be presenting. Other than the content, what other factors would lead a "startup" to go for non-profit, and what advantages or benefits that may come from this type of decision?

Decision Non Profit Content

asked May 1 '12 at 06:11
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Lance Lafontaine
190 points

1 Answer


3

Just to clarify, when you say you:

My partner and I discussed business plans, premium services and what not, but finally decided to keep the project as completely non-profit

Makes me think you are using terminology different then I may use it. "Non-profit" does not have anything to do with bringing in revenue or charging people for your services. I would just call that not profitable ;)

In the US the term "non-profit" typically refers to a businesses structure and how they deal with taxes, etc. There are guidelines for the types of organizations that could qualify for this and how they have to operate.
http://en.wikipedia.org/wiki/501(c)_organization The benefits of doing a non-profit organization is that you structure your business around a cause and all profits and revenue go toward that mission. Instead of paying out dividends and paying profits to the owners of the business the money must be used for things to further the cause of the non-profit.

If you want to structure your business around a cause and that mission is more important than money then a non-profit may be a good fit. If you want to bonus yourself and take advantage of the billions your company may make then non-profit is probably not a good option.

However you structure your business, I would strongly encourage you to have a profitable revenue model. It's hard to run any business, organization, club, community group or whatever without money to cover the cost of doing business and serving your customers.

answered May 1 '12 at 15:48
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Ryan Doom
5,472 points

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Decision Non Profit Content