>It does mean that profits go back into the company, rather than having profits siphoned off by investors and shareholders.
Why is money going back into the company "good", but investors get the negative connotation of "siphoning" money? What is with the disdain for the people who own the company making money from it?
> Why is money going back into the company "good", but investors get the negative connotation of "siphoning" money?
Because that is exactly what's happening?
If the company produces just enough to break even, the money is distributed fairly.
But if more money is earnt, this entire surplus goes to the investors (or, in recent years, also to management).
This means that while the wages of the workers stagnate with increasing productivity, the profits of the investors go up. The worker is producing an additional vakue, but all of that goes to the capitalist.
I didn't say it was good or bad. Siphoning of money is what happens with investment, that's why people invest -- so they can get some of the profit/growth back for themselves!
Like witty_username pointed out. With a non-profit there are no investors or shareholders. Not only that they will not want to, but investors are not allowed. It doesn't mean the company can't make profits, it just means no one will be taking profits from investment.
It's not good or bad, but it does mean that most of the profit goes back into the company, which is good for growth. It also means there aren't investors which are the primary source of growth for most startups. Non-profits that make profit have to do so directly though sales or donations. And profit made is mostly reinvested.
There was no good or bad judgement there, it is just a different model and some aspects of that model mean more growth and some mean less.
It also means the founders likely won't become billionaires (because the founders don't own a stake), but the company could still be worth billions -- in terms of how much money they have on hand or take in. That profit is supposed to be locked into the company for the purpose of performing the mission of the company. Which can include paying salaries to further the mission.
These are the reasons most "benefit companies" are non-profit. Trying to do good in the world so all donation (rather than investment) and profit goes toward the goal rather than investors and why I was surprised that this company is not.
Why is money going back into the company "good", but investors get the negative connotation of "siphoning" money? What is with the disdain for the people who own the company making money from it?