4 ms·

Can't make money in your non-profit? Just self-deal and have another business that you can make money on! Often illegal to do this too egregiously.

CamelCaseName 3y ago
Hasn't stopped anyone before. I'm still waiting for Elon to get reamed over SolarCity. Oh wait, he never will, and will strong arm the company into giving him another 12% of TSLA.
- boringg 3y ago
  SolarCity? Tsla saved them when he rolled them into Tesla. Anyone who picked up TSLA shares from that purchase did significantly better than they ever would have as solarcity.
  - debacle 3y ago
    He might be talking about the subsidy deal with NYS that imploded.
- azemetre 3y ago
  If the board allows it, why should the public care? Aren't self imploding companies good for the economy? It allows newer ones to fulfill their place.
chinchilla2020 3y ago
It's the oldest trick in the book. The nonprofit doesn't pay taxes. Nonprofit buys it's supplies from a for-profit. You mark up the supplies and buy them from the for-profit. Organize costs so that the for-profit incurs all the costs and the non-profit gets most of the revenue.
- bugglebeetle 3y ago
  This is almost certainly a form of securities fraud, however.
  - voakbasda 3y ago
    That only matters if the government has the ability to prosecute it successfully, but I would posit that most fraud does not even get investigated.
  - jmalicki 3y ago
    This is how IKEA has been operating forever. https://www.investopedia.com/articles/investing/012216/how-ikea-makes-money.asp#:~:text=Key%20Takeaways,foundation%E2%80%94to%20minimize%20its%20taxes https://www.investopedia.com/articles/investing/012216/how-i....
    - bugglebeetle 3y ago
      Perhaps, but let’s not assume that what a wealthy Nazi sympathizer bribed his way into doing in postwar Europe is a repeatably legal arrangement.
- ensignavenger 3y ago
  What exactly would that accomplish? The For Profit would have to pay a ton of taxes on all that revenue if the non-profit incurred all the costs!
  - lupire 3y ago
    Net revenue minus taxes is profit.
  - justinclift 3y ago
    Could the for-profit be located in a different jurisdiction where there's no company tax (or something along similar lines)?
    - seanhunter 3y ago
      a)That's not the case for openAI b)If you do that, why have the not-for-profit incurring costs? Just put it all where there's no company tax.
- seanhunter 3y ago
  That would strictly result in paying more tax than if you just had the for profit and put all the costs and revenues in there.

CamelCaseName 3y ago

Hasn't stopped anyone before. I'm still waiting for Elon to get reamed over SolarCity. Oh wait, he never will, and will strong arm the company into giving him another 12% of TSLA.

boringg 3y ago
SolarCity? Tsla saved them when he rolled them into Tesla. Anyone who picked up TSLA shares from that purchase did significantly better than they ever would have as solarcity.
- debacle 3y ago
  He might be talking about the subsidy deal with NYS that imploded.
azemetre 3y ago
If the board allows it, why should the public care? Aren't self imploding companies good for the economy? It allows newer ones to fulfill their place.

chinchilla2020 3y ago

It's the oldest trick in the book. The nonprofit doesn't pay taxes. Nonprofit buys it's supplies from a for-profit. You mark up the supplies and buy them from the for-profit. Organize costs so that the for-profit incurs all the costs and the non-profit gets most of the revenue.

bugglebeetle 3y ago
This is almost certainly a form of securities fraud, however.
- voakbasda 3y ago
  That only matters if the government has the ability to prosecute it successfully, but I would posit that most fraud does not even get investigated.
- jmalicki 3y ago
  This is how IKEA has been operating forever. https://www.investopedia.com/articles/investing/012216/how-ikea-makes-money.asp#:~:text=Key%20Takeaways,foundation%E2%80%94to%20minimize%20its%20taxes https://www.investopedia.com/articles/investing/012216/how-i....
  - bugglebeetle 3y ago
    Perhaps, but let’s not assume that what a wealthy Nazi sympathizer bribed his way into doing in postwar Europe is a repeatably legal arrangement.
ensignavenger 3y ago
What exactly would that accomplish? The For Profit would have to pay a ton of taxes on all that revenue if the non-profit incurred all the costs!
- lupire 3y ago
  Net revenue minus taxes is profit.
- justinclift 3y ago
  Could the for-profit be located in a different jurisdiction where there's no company tax (or something along similar lines)?
  - seanhunter 3y ago
    a)That's not the case for openAI b)If you do that, why have the not-for-profit incurring costs? Just put it all where there's no company tax.
seanhunter 3y ago
That would strictly result in paying more tax than if you just had the for profit and put all the costs and revenues in there.