4 ms·

From my non-American perspective, any organization that exists to provide material benefits to its owners / members / employees / other affiliates is a for-prof

From my non-American perspective, any organization that exists to provide material benefits to its owners / members / employees / other affiliates is a for-profit organization. A non-profit should pursue public interests, and only its core activities should be tax exempt. If a non-profit operates a business, that business should pay taxes normally.

nickff 2y ago
The problem is that there are no truly 'public' interests, there are only clusters of private interests. Going down this route would eliminate all non-profits (which I'm not entirely against).
- jltsiren 2y ago
  And other people claim that the personal is political and that there are no truly private interests. In practice, there is a shared understanding what acting in the public interest means in that particular society. Laws can also provide a non-exhaustive list of examples to clarify the meaning.
  - nickff 2y ago
    I disagree that there is a 'shared understanding'; for instance, the latest Freakonomics podcast episode featured an interview where the subject stated that live theatre was a social good that was critical to a functioning society, and worthy of public subsidy. I like theatre, but think it's a luxury good. There are many similar 'interests'.
    - jltsiren 2y ago
      It obviously depends on the society. Theatres run or subsidized by a state or a city are common. In many countries, supporting national culture is seen as one of the key functions of the government. Most people in those countries agree with that, and even those who don't generally understand that they are in the minority.
      - nox101 2y ago
        Now we have to argue about "culture". I'd say, movies and net series are culture and well funded and popular with the public. No need for subsidies for unpopular "theater". Also, according to that same episode of freakonomics, average income for theater goes is $270k a year. Those fans can afford to pay for their preferred entertainment. The government does not need to subsides them.
        jltsiren 2y ago
        Public subsidies to movies are common, especially in countries that are not very popular in the international market. TV channels and streaming services are often required to have a certain amount of domestic content. Even video games get public subsidies. What you say about the average income of theater audience sounds very foreign to me. I guess that elitist theater is the only form that remains viable when it has to rely on the market and charitable donations. When I was a kid, theater was something you went to on a school excursion every year or so. It wasn't my thing, but some of my friends got interested in it. Later in the university, our student union had a semi-professional theater group that had become a national institution. Many student organizations had hobbyist theater groups. Even students of science started one shortly after I graduated. And before my time, socialist theater used to be a big thing. But that was when socialism meant actual socialism and primarily appealed to the working class.
        gopher_space 2y ago
        I mean I'd love to know that zero of my tax dollars support the military, which is problematic for my religion.
        _DeadFred_ 2y ago
        What's the median? The median excluding NYC, LA, and SF? Why is freakonomics using average? They know that's a 'manipulate public discourse' number not really a useful one, especially for something that can easily have 1 or 2 9 to 10 figure net wealth individuals in attendance.
  - lmm 2y ago
    > In practice, there is a shared understanding what acting in the public interest means in that particular society No there isn't lol. Half of society thinks promoting one political party is in the public interest, the other half thinks promoting the other one is. Same for religions, same for handling unwanted pregnancies, same for education...
    - jltsiren 2y ago
      Promoting a political position or a religious belief usually counts as a public interest, as that's at the core of freedom of speech and religious freedom. I've never heard anyone claiming seriously that their political party should be a tax-exempt non-profit, while the opposing party should be a for-profit corporation that has to pay taxes.
      - nickff 2y ago
        Lots of 'Tea Party' organizations got "investigated" by the IRS, while their 'Occupy Movement' counterparts were given more leeway.
PaulDavisThe1st 2y ago
"Profit" means income in excess of expenses, and in for-profit companies the profit is used either reinvested or paid to the owners as a dividend. Credit unions (and other US 501c3 organizations) do not exist to make a profit, and any income they have in excess of expenses is reinvested. There are no dividends. These are two utterly different sorts of things.
- jltsiren 2y ago
  As I said, that was my non-American perspective. You gave a specific legal definition in a single jurisdiction. It does not match the definition in many other jurisdictions or the intuitive understanding many people have. From my perspective, there is no fundamental difference between an ordinary company distributing its profits as dividends, an employee-owned company distributing profits as higher wages or bonuses, and a coop distributing its profits by providing better/cheaper services to its members. They are all for-profit businesses. Only the mechanisms of profit distribution are different.
  - PaulDavisThe1st 2y ago
    Then I consider your perspective flawed. A company that exists to make money for its owners, who do not materially participate in the operations of the company, is (for me) substantively and qualitatively different from worked-owned coops, consumer-owned coops, credit unions etc. I'd be interested in a jurisdiction that does not make this distinction.
    - jltsiren 2y ago
      My perspective was from Finland. Non-profit status there is tied to what the organization does rather than to the specific form of the organization. As a rule of thumb, if the organization competes against for-profit organizations, it's probably a for-profit organization for tax purposes. That covers most coops, including credit unions. There are of course specific rules for different types of organizations, but they don't change the big picture.
abdullahkhalids 2y ago
> Branches are not cheap to create or operate, and the large banks concentrate them in densely populated areas with relatively wealthy customers and businesses nearby. Community banks are willing to take worse economics to have branches in places where the large banks don’t; this keeps those places tied to the national financial system. > This is a policy aim of the government, both due to the economic impacts and because most residents being banked is core to orderly provision of benefits, taxation, and other government functions. A bank branch is a retail point-of-presence for the SSA getting funds to a pensioner, for the IRS collecting payroll taxes, and for the DEA interdicting fentanyl, staffed and funded by the private sector. From the excellent blog [1] that everyone interested in how the financial system operates should read. [1] https://www.bitsaboutmoney.com/archive/community-banking-and-fintech/ https://www.bitsaboutmoney.com/archive/community-banking-and...
snowpid 2y ago
In Germany there are housing unions (providing cheap rent for the members) and union banks / membership banks / Genossenschaftsbank (?) quiet common and tax exempt.

nickff 2y ago

The problem is that there are no truly 'public' interests, there are only clusters of private interests. Going down this route would eliminate all non-profits (which I'm not entirely against).

jltsiren 2y ago
And other people claim that the personal is political and that there are no truly private interests. In practice, there is a shared understanding what acting in the public interest means in that particular society. Laws can also provide a non-exhaustive list of examples to clarify the meaning.
- nickff 2y ago
  I disagree that there is a 'shared understanding'; for instance, the latest Freakonomics podcast episode featured an interview where the subject stated that live theatre was a social good that was critical to a functioning society, and worthy of public subsidy. I like theatre, but think it's a luxury good. There are many similar 'interests'.
  - jltsiren 2y ago
    It obviously depends on the society. Theatres run or subsidized by a state or a city are common. In many countries, supporting national culture is seen as one of the key functions of the government. Most people in those countries agree with that, and even those who don't generally understand that they are in the minority.
    - nox101 2y ago
      Now we have to argue about "culture". I'd say, movies and net series are culture and well funded and popular with the public. No need for subsidies for unpopular "theater". Also, according to that same episode of freakonomics, average income for theater goes is $270k a year. Those fans can afford to pay for their preferred entertainment. The government does not need to subsides them.
      - jltsiren 2y ago
        Public subsidies to movies are common, especially in countries that are not very popular in the international market. TV channels and streaming services are often required to have a certain amount of domestic content. Even video games get public subsidies. What you say about the average income of theater audience sounds very foreign to me. I guess that elitist theater is the only form that remains viable when it has to rely on the market and charitable donations. When I was a kid, theater was something you went to on a school excursion every year or so. It wasn't my thing, but some of my friends got interested in it. Later in the university, our student union had a semi-professional theater group that had become a national institution. Many student organizations had hobbyist theater groups. Even students of science started one shortly after I graduated. And before my time, socialist theater used to be a big thing. But that was when socialism meant actual socialism and primarily appealed to the working class.
      - gopher_space 2y ago
        I mean I'd love to know that zero of my tax dollars support the military, which is problematic for my religion.
      - _DeadFred_ 2y ago
        What's the median? The median excluding NYC, LA, and SF? Why is freakonomics using average? They know that's a 'manipulate public discourse' number not really a useful one, especially for something that can easily have 1 or 2 9 to 10 figure net wealth individuals in attendance.
- lmm 2y ago
  > In practice, there is a shared understanding what acting in the public interest means in that particular society No there isn't lol. Half of society thinks promoting one political party is in the public interest, the other half thinks promoting the other one is. Same for religions, same for handling unwanted pregnancies, same for education...
  - jltsiren 2y ago
    Promoting a political position or a religious belief usually counts as a public interest, as that's at the core of freedom of speech and religious freedom. I've never heard anyone claiming seriously that their political party should be a tax-exempt non-profit, while the opposing party should be a for-profit corporation that has to pay taxes.
    - nickff 2y ago
      Lots of 'Tea Party' organizations got "investigated" by the IRS, while their 'Occupy Movement' counterparts were given more leeway.

PaulDavisThe1st 2y ago

"Profit" means income in excess of expenses, and in for-profit companies the profit is used either reinvested or paid to the owners as a dividend. Credit unions (and other US 501c3 organizations) do not exist to make a profit, and any income they have in excess of expenses is reinvested. There are no dividends. These are two utterly different sorts of things.

jltsiren 2y ago
As I said, that was my non-American perspective. You gave a specific legal definition in a single jurisdiction. It does not match the definition in many other jurisdictions or the intuitive understanding many people have. From my perspective, there is no fundamental difference between an ordinary company distributing its profits as dividends, an employee-owned company distributing profits as higher wages or bonuses, and a coop distributing its profits by providing better/cheaper services to its members. They are all for-profit businesses. Only the mechanisms of profit distribution are different.
- PaulDavisThe1st 2y ago
  Then I consider your perspective flawed. A company that exists to make money for its owners, who do not materially participate in the operations of the company, is (for me) substantively and qualitatively different from worked-owned coops, consumer-owned coops, credit unions etc. I'd be interested in a jurisdiction that does not make this distinction.
  - jltsiren 2y ago
    My perspective was from Finland. Non-profit status there is tied to what the organization does rather than to the specific form of the organization. As a rule of thumb, if the organization competes against for-profit organizations, it's probably a for-profit organization for tax purposes. That covers most coops, including credit unions. There are of course specific rules for different types of organizations, but they don't change the big picture.

abdullahkhalids 2y ago

> Branches are not cheap to create or operate, and the large banks concentrate them in densely populated areas with relatively wealthy customers and businesses nearby. Community banks are willing to take worse economics to have branches in places where the large banks don’t; this keeps those places tied to the national financial system. > This is a policy aim of the government, both due to the economic impacts and because most residents being banked is core to orderly provision of benefits, taxation, and other government functions. A bank branch is a retail point-of-presence for the SSA getting funds to a pensioner, for the IRS collecting payroll taxes, and for the DEA interdicting fentanyl, staffed and funded by the private sector. From the excellent blog [1] that everyone interested in how the financial system operates should read. [1] https://www.bitsaboutmoney.com/archive/community-banking-and-fintech/ https://www.bitsaboutmoney.com/archive/community-banking-and...

snowpid 2y ago

In Germany there are housing unions (providing cheap rent for the members) and union banks / membership banks / Genossenschaftsbank (?) quiet common and tax exempt.