undefined | Better HN

0 pointschatmasta7y ago0 comments

There is a place for this sort of cynicism, for example when looking at Zuckerberg’s structure of his “family trust.”

But in this case it’s really an absurd implication. There is literally no personal benefit to founders making their company a non-profit. Yes they can pull salary from it, but they could do that in a for-profit company too. Not only that, but it’s impossible to sell a 501c3 non-profit because there are no shares. It can only dissolve, in which case the board must distribute any remaining assets to another non-profit.

0 comments

a_imho7y ago

I don't understand what's absurd about it, you can keep more money if you save on your taxes (both the company's and personal? I don't know how the US system works).

I don't argue being a non-profit is a cause for suspicion in case of a saas, I just don't see why would it be noble.

chatmastaOP7y ago

It’s absurd because if you sit down and do the math, you’ll find there are basically no monetary advantages to paying yourself out of a 501c3 vs LLC/SCorp/CCorp. And even if you did find an advantage, there is no way it saves more money than you could make by selling your company. You cannot sell a non profit.

a_imho7y ago

Still don't understand, when your organization pays less tax, you have more money to pay yourself, thus your salary will be higher.

Conversely, there is little to no reason for being setup as a non-profit in Ghost's case.

[1]https://www.upcounsel.com/llc-vs-nonprofit

3 more replies

wolco7y ago

Is the salary information public?

Because one can cash out through a 500k a year salary

chatmastaOP7y ago

Or one could just incorporate as a for-profit in the first place, and pay a $500k salary. There is basically no advantage to paying yourself $500k at a 501c3 vs a for-profit, and certainly not one that outweighs the many disadvantages. Employees need to pay taxes just as they would at any corporation, and the company needs to pay their withholdings. The only payroll tax a 501c3 is exempt from is FUTA (federal unemployment tax).

Seriously, looking for nefarious motivation here is really grasping at straws.

j16sdiz7y ago

... 501c3 ..

They are a Singapore non-profit. https://blog.ghost.org/moving-to-singapore/

j / k navigate · click thread line to collapse

0 pointschatmasta7y ago0 comments

There is a place for this sort of cynicism, for example when looking at Zuckerberg’s structure of his “family trust.”

0 comments

a_imho7y ago

I don't understand what's absurd about it, you can keep more money if you save on your taxes (both the company's and personal? I don't know how the US system works).

I don't argue being a non-profit is a cause for suspicion in case of a saas, I just don't see why would it be noble.

chatmastaOP7y ago

a_imho7y ago

Still don't understand, when your organization pays less tax, you have more money to pay yourself, thus your salary will be higher.

Conversely, there is little to no reason for being setup as a non-profit in Ghost's case.

[1]https://www.upcounsel.com/llc-vs-nonprofit

3 more replies

wolco7y ago

Is the salary information public?

Because one can cash out through a 500k a year salary

chatmastaOP7y ago

Seriously, looking for nefarious motivation here is really grasping at straws.

j16sdiz7y ago

... 501c3 ..

They are a Singapore non-profit. https://blog.ghost.org/moving-to-singapore/

j / k navigate · click thread line to collapse