Our proposed legacy plan includes the idea that we should reposition/restructure/transfer the assets of our S-Corp to a 501(c)(3) [non-profit/tax-exempt] organization.
That’s a fairly significant . . . –no; downright radical–proposal. And we’ve got to think and pray about the implications and consequences and just, plain, how to do it effectively (if we do it–indeed, if we are able to do it–at all).
So this morning, at breakfast, I mentioned to some men from our church what we are thinking about.
In response to what I said, one of the men stumbled as he used the word “unprofitable” to describe the kind of business we were proposing. (!!!)
Uh. No. Not ‘unprofitable.’ Rather, non-profit.
The business shouldn’t lose money. Indeed, from Sarita’s and my perspective, a well-run business should always create a surplus. But with a non-profit, whatever surplus it generates must be used strictly to pursue its charitable purpose, never for the benefit of individuals (”owners”). . . .
At noon, I attended a “Business and Mission” luncheon sponsored by the Conservative Baptist WorldVenture organization. One of the speakers, Tom Beck [a member of the family who founded Blockbuster Video, Boston Chicken (now Boston Market) and the Einstein Brothers Bagels chain], made a comment that elicited a hearty “Amen” from me.
Tom said something to the effect of, “By the way. People speak of non-profit organizations. They think, therefore, that the organization should make no profit. This is a misconception. They should, instead, speak of tax-exempt organizations. And tax-exempt organizations should be run at a profit. If they fail to make a profit, they will go out of business.”
As my “Amen” ricocheted off the walls, no one else in the room let out a peep!
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