Organisation

“I’m not really trying to make a profit here.” He leaned back in the chair and laced his fingers together. The others around the table kept their eyes focused on him.

“It would be ok if I don’t take a salary,” he continued. “My main objective is to build a community. I want to provide a product and an experience that is meaningful to our customers. In fact, the last three organisations that I founded, and ran, were nonprofits.”

There were some nods around the table. A few muted ‘oohs’ and ‘ahs.’ They were eating it up.

“Like 401c 3 nonprofits?” I chimed in.

“Sorry?” He asked, seemingly caught off guard by someone asking a question instead of drinking the kool aid.

“Your previous organizations–er, organisations. They were legally classified as nonprofits?” I leaned back in my chair and laced my fingers together.

“Each one of those organizations,” he leaned forward and addressed everyone around the table as he spoke. He pulled them in with his words and his gestures. “Each one built a strong community and delivered a product or an experience that changed people’s lives. I can share some of the reviews; you can even see them online. It was literally life-changing stuff. Very humbling. And I didn’t take home a cent.”

The others around the table nodded in praise. They turned to me, partially curious to hear my response and partially perturbed that I was questioning their newly discovered savior.

“Just because your organization doesn’t make any money doesn’t make it a nonprofit.” I let that soak in for a little. “I did some research and your last three organizations did have great reviews. They were also legally classified as for profit entities. They just didn’t make any money.”

“Well let’s not pretend to be lawyers or accountants here,” he laughed. He motioned for the others to join in and they laughed too, albeit somewhere nervously. “That’s all very complicated stuff and organizations will use whichever classification is best suited for the company’s mission.”

I turned to my colleagues. “This is a tech startup, right?” They nodded. “A startup that has received investor money. And with that money, we are charged to make them money. And hopefully we’ll make some for ourselves.” They nodded. “So why are we even entertaining this idea of being a nonprofit? Clearly this guy can sell. The strange thing is that he can sell but not make any money doing it. Do we want that here?”

My colleagues pursed their lips, scratched their chins, squinted their eyes.

“We,” the founder, who had been silent the whole meeting, began, “we want… to… make… money.” He paused. “Yeah, we want to make money!”

“Even better!” The sales guy exclaimed. “Then we can build a community and a meaningful product and make a lot of money doing it!”

“YEAH!” everyone shouted. They all high fived and hugged and cheered.

“But he doesn’t have a tracked record of making any money.” My protest was lost in the cheers.

The startup was shut down 2 months later.