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Nobody can operate at scale as a non profit. Capitalism-designed legal system crafted non-profits regulations in such a way that non-profits will never ever be

Nobody can operate at scale as a non profit. Capitalism-designed legal system crafted non-profits regulations in such a way that non-profits will never ever be any kind of competition to profit-driven capitalist companies because they have to beg every 2 years for money from outside in order to be able to stay afloat. They can only gather 2 years' worth of operating money legally. So its 1 year of actual work, then starting begging for a year so that you can gather enough money over that year to be able to survive another year before having to beg for money again.

jefftk 4y ago
> Nobody can operate at scale as a non profit. Wikipedia seems like the biggest tech counterexample.
- ethbr0 4y ago
  Wikipedia's labor costs are anomalously low.
- noirscape 4y ago
  Wikipedia "works" as a non-profit but they are also 100% the Kings of deceptive marketing to get way more funding than they need to operate and blow most of it on stuff unrelated to Wikipedia or to an ever-growing endowment that supposedly already covers the site for several decades. Source: https://www.dailydot.com/debug/wikipedia-endownemnt-fundraising/ https://www.dailydot.com/debug/wikipedia-endownemnt-fundrais... // associated HN discussion: https://news.ycombinator.com/item?id=27339887 https://news.ycombinator.com/item?id=27339887 For a more practical example; I moderate a wiki project with semi-decent traffic and a decent enough reputation and our operating costs are about ~3k each year (it's like a little more than that) if the donation rounds are any indication. The donations usually occur in November and we get funded within 3 weeks. In terms of expenses, it's really hosting and a small amount of money set aside for a WMF developer (independently) to maintain our custom extensions for the site. You don't need tons of money if you just want to stay solvent.
  - jefftk 4y ago
    I agree with you, but this just makes the counterexample stronger. Wikipedia could be raising far less money and still successfully operate one of the biggest sites on the web.
- unity1001 4y ago
  And the only one. Who needs to beg every other year for money and risk going under even if they falter in being able to gather 2 years' of runway at any given point. Precisely how the non-profits were designed to be.
  - jefftk 4y ago
    Wikipedia is nowhere near faltering: they beg for money because this gets them money which they can use to run interesting things, but the basic work of operating the primary site is very easy to keep funded. Many non-profits don't need to fundraise publicly because they've lined up some sort of stable funding, but then you're naturally much less aware of their funding situation.
    - unity1001 4y ago
      Mozilla was also nowhere near faltering until a few years ago. Then suddenly they are on shaky ground. Such a model can work for stuff that people's lives dont depend on. But its not viable for people trusting their livelihood on them.
  - __derek__ 4y ago
    The Signal Foundation, Mozilla, and the EFF are other prominent examples.
  - ryanbrunner 4y ago
    Plenty of successful business models rely at least partially on "begging for money". Universities and hospitals are two notable ones that rely pretty significantly on philanthropy.
solardev 4y ago
I mean, you have entire governments, the United Nations, Wikipedia, Mozilla, Burning Man, some universities, many schools and museums and libraries... capitalism is just one way to motivate workers. I don't know where you got this weird idea of begging for money every two years. Nonprofits can and do make money from products and services, and they can pay it out in salaries or executive compensation. What they can't do is pay shareholders or VCs. Their revenue can be reinvested in themselves or in some fund, just not paid as "profit" to investors.
- unity1001 4y ago
  Wikipedia is a good example of how bad the non profits have it. They have to beg every other year for 2 years' worth of money. If they cant succeed in gathering that amount even once, they go under. Mozilla is already on shaky ground. And the others have permanent funding from other sources, so they are not really non-profit examples.
  - solardev 4y ago
    Mmm, do you have some examples or sources to cite? I don't know where you're getting these ideas, but I've worked for many nonprofits and considered starting my own, so had to understand their legal and financial structures a little bit. If you have to beg every 2 years for money or you go bankrupt, that is some terrible planning. Nonprofits are usually run like businesses, and have revenues and expenses like any other business, usually continuous. It's not like they fundraise every 2 years and then spend money the rest of the time. That's just not how it works. They have boards, managers, staff, salaries, etc. that they plan for day to day, like any other business, and their revenue streams are not limited to donations (there can be grants, sales, memberships, endowments, whatever). Wikipedia, as an example, uses that bullshit to stir up a sense of urgency as a call to action, but they are actually doing just fine: https://www.makeuseof.com/tag/wikipedia-millions-bank-beg/ https://www.makeuseof.com/tag/wikipedia-millions-bank-beg/ https://www.washingtonpost.com/news/the-intersect/wp/2015/12/02/wikipedia-has-a-ton-of-money-so-why-is-it-begging-you-to-donate-yours/ https://www.washingtonpost.com/news/the-intersect/wp/2015/12... You can also look at their Form 990s for a clearer picture of their financials; https://projects.propublica.org/nonprofits/organizations/200049703 https://projects.propublica.org/nonprofits/organizations/200... (it's not FAANG money, but it's enough for what they're doing, and they get richer every year). The reason typical nonprofits don't get rich is that you can't really "invest" in them via capital injections, because investors can't get a return. That's what makes them nonprofit. But nothing stops them from doing routine business activities to make money on a predictable, cyclical cycle -- not a lump sum every year. That Wikipedia thing is just a marketing gimmick, the same way many charities will use holidays or Giving Tuesday to beg for money, but that's not their entire income stream (or even most of it). The choice to become a nonprofit is exactly that, a choice. They don't "have it bad", they just choose their mission (well, ideally) over profit. Of course scams exist and some are just tax havens or whatever. There are also non 501c3 nonprofits, like churches or issue-based advocacy groups, that have their own funding structures (tithes, corporate affiliations, whatever). And nonprofits can and do have their own investments, their own funds, etc. that earn a return, but it just goes back to the org and/or its staff (as salaries and perks, etc.), not shareholder return. Overall, though, for the most part the primary differentiation is just that they don't have shareholders/owners to give money to. Aside from that they are mostly just businesses with a bunch of small technicalities of IRS rules to adhere to.
sgc 4y ago
A lot of nonprofits have huge endowments that allow them to have annual income in virtual perpetuity.

jefftk 4y ago

> Nobody can operate at scale as a non profit. Wikipedia seems like the biggest tech counterexample.

ethbr0 4y ago
Wikipedia's labor costs are anomalously low.
noirscape 4y ago
Wikipedia "works" as a non-profit but they are also 100% the Kings of deceptive marketing to get way more funding than they need to operate and blow most of it on stuff unrelated to Wikipedia or to an ever-growing endowment that supposedly already covers the site for several decades. Source: https://www.dailydot.com/debug/wikipedia-endownemnt-fundraising/ https://www.dailydot.com/debug/wikipedia-endownemnt-fundrais... // associated HN discussion: https://news.ycombinator.com/item?id=27339887 https://news.ycombinator.com/item?id=27339887 For a more practical example; I moderate a wiki project with semi-decent traffic and a decent enough reputation and our operating costs are about ~3k each year (it's like a little more than that) if the donation rounds are any indication. The donations usually occur in November and we get funded within 3 weeks. In terms of expenses, it's really hosting and a small amount of money set aside for a WMF developer (independently) to maintain our custom extensions for the site. You don't need tons of money if you just want to stay solvent.
- jefftk 4y ago
  I agree with you, but this just makes the counterexample stronger. Wikipedia could be raising far less money and still successfully operate one of the biggest sites on the web.
unity1001 4y ago
And the only one. Who needs to beg every other year for money and risk going under even if they falter in being able to gather 2 years' of runway at any given point. Precisely how the non-profits were designed to be.
- jefftk 4y ago
  Wikipedia is nowhere near faltering: they beg for money because this gets them money which they can use to run interesting things, but the basic work of operating the primary site is very easy to keep funded. Many non-profits don't need to fundraise publicly because they've lined up some sort of stable funding, but then you're naturally much less aware of their funding situation.
  - unity1001 4y ago
    Mozilla was also nowhere near faltering until a few years ago. Then suddenly they are on shaky ground. Such a model can work for stuff that people's lives dont depend on. But its not viable for people trusting their livelihood on them.
- __derek__ 4y ago
  The Signal Foundation, Mozilla, and the EFF are other prominent examples.
- ryanbrunner 4y ago
  Plenty of successful business models rely at least partially on "begging for money". Universities and hospitals are two notable ones that rely pretty significantly on philanthropy.

solardev 4y ago

I mean, you have entire governments, the United Nations, Wikipedia, Mozilla, Burning Man, some universities, many schools and museums and libraries... capitalism is just one way to motivate workers. I don't know where you got this weird idea of begging for money every two years. Nonprofits can and do make money from products and services, and they can pay it out in salaries or executive compensation. What they can't do is pay shareholders or VCs. Their revenue can be reinvested in themselves or in some fund, just not paid as "profit" to investors.

unity1001 4y ago
Wikipedia is a good example of how bad the non profits have it. They have to beg every other year for 2 years' worth of money. If they cant succeed in gathering that amount even once, they go under. Mozilla is already on shaky ground. And the others have permanent funding from other sources, so they are not really non-profit examples.
- solardev 4y ago
  Mmm, do you have some examples or sources to cite? I don't know where you're getting these ideas, but I've worked for many nonprofits and considered starting my own, so had to understand their legal and financial structures a little bit. If you have to beg every 2 years for money or you go bankrupt, that is some terrible planning. Nonprofits are usually run like businesses, and have revenues and expenses like any other business, usually continuous. It's not like they fundraise every 2 years and then spend money the rest of the time. That's just not how it works. They have boards, managers, staff, salaries, etc. that they plan for day to day, like any other business, and their revenue streams are not limited to donations (there can be grants, sales, memberships, endowments, whatever). Wikipedia, as an example, uses that bullshit to stir up a sense of urgency as a call to action, but they are actually doing just fine: https://www.makeuseof.com/tag/wikipedia-millions-bank-beg/ https://www.makeuseof.com/tag/wikipedia-millions-bank-beg/ https://www.washingtonpost.com/news/the-intersect/wp/2015/12/02/wikipedia-has-a-ton-of-money-so-why-is-it-begging-you-to-donate-yours/ https://www.washingtonpost.com/news/the-intersect/wp/2015/12... You can also look at their Form 990s for a clearer picture of their financials; https://projects.propublica.org/nonprofits/organizations/200049703 https://projects.propublica.org/nonprofits/organizations/200... (it's not FAANG money, but it's enough for what they're doing, and they get richer every year). The reason typical nonprofits don't get rich is that you can't really "invest" in them via capital injections, because investors can't get a return. That's what makes them nonprofit. But nothing stops them from doing routine business activities to make money on a predictable, cyclical cycle -- not a lump sum every year. That Wikipedia thing is just a marketing gimmick, the same way many charities will use holidays or Giving Tuesday to beg for money, but that's not their entire income stream (or even most of it). The choice to become a nonprofit is exactly that, a choice. They don't "have it bad", they just choose their mission (well, ideally) over profit. Of course scams exist and some are just tax havens or whatever. There are also non 501c3 nonprofits, like churches or issue-based advocacy groups, that have their own funding structures (tithes, corporate affiliations, whatever). And nonprofits can and do have their own investments, their own funds, etc. that earn a return, but it just goes back to the org and/or its staff (as salaries and perks, etc.), not shareholder return. Overall, though, for the most part the primary differentiation is just that they don't have shareholders/owners to give money to. Aside from that they are mostly just businesses with a bunch of small technicalities of IRS rules to adhere to.

sgc 4y ago

A lot of nonprofits have huge endowments that allow them to have annual income in virtual perpetuity.