5 ms·

Not taking any equity is a pretty important distinction.

• s1artibartfast 4y ago
  Even if they did take equity, I'm not sure that would be a problem. Charities and non-profits can make investments. For example, foundations have huge market investments. The distinction is that the owners can never cash out and put the money in their pocket. At most, they can take a salary with justification.
  • SQueeeeeL 4y ago
    If you can't cash out of equity it makes a deeply insecure situation for everyone involved. It basically becomes a weird way to perform stock buy backs and would almost certainly be immediately exploited
    • s1artibartfast 4y ago
      I dont think I understand what you are saying. Companies can already do stock buybacks with pretax money, and non-profits can already invest and hold equity. I don't understand why a company would want to use a non-profit to buy back stock. The point of a buyback is to destroy the stock, driving up the price. If a non-profit holds the stock, then it doesnt work.
  • SamBam 4y ago
    The company can invest. The charity owner itself certainly can't take equity using the charity's money.