How to Build Wealth and Save The World

[Vurlo]

Let's say you desire to build wealth, but you believe your purpose is to contribute your ability to solving social problems... not 10 or 20 years from now-- RIGHT NOW. You're young (I'm 21), an entrepreneur, happily married and your spouse is 100% behind you in this line of thinking.

So I ask myself, is there a way to do both? Can I build wealth and solve social problems at the same time?

What if we switched direction to launching a non-profit foundation? This non-profit would build income pipelines to finance itself and tackle social problems with entrepreneurial solutions. We would pay ourselves minimal salaries that would increase as the foundation increased revenue (as we do now with a for-profit business).

Boom, two birds with one stone right? Our time building businesses for the non-profit and solving social problems would also pay a nice salary, which we would use to invest in passive income streams (maybe real estate or buying businesses) to secure our own personal wealth. Because the non-profit pays no tax, it would also help accellerate growth.

Years from now, we could have major non-profit foundations solving real problems and still build our own personal wealth at the same time. Best of all, we can get started now!

I'm guessing this is already going on. Has anyone done anything similar? What do you guys think?

[rogercbryan]

Here we go again... Do not get into the Non-Profit Business if you are thinking about building wealth!!! That is NOT a reason to start a non-profit in fact it pisses me off when I see posts like this (didn't we have one last month like this?).

The non-profit industry is NOT for you to make money. If that is what you are thinking then stop while you are behind. It is despicable that people want to start non-profits so they can make money. I'm trying to be polite here but I'm still going... to... ahhhhhh.... deep breath

There is no advantage to starting a non-profit instead of a corporation. If you want to 'do good' then start a business and donate and/or work with charities to help them. Do not go into it looking to make money by using a non-profit name. That's just wrong!

I've been working with non-profits for 10+ years now and I see people trying to do what you are talking about all time. All you do is give non-profits a bad name when you try to use them for your won advantage.

Get over this idea and move on!!!

[Vurlo]

Here we go again... Do not get into the Non-Profit Business if you are thinking about building wealth!!! That is NOT a reason to start a non-profit in fact it pisses me off when I see posts like this (didn't we have one last month like this?).

The non-profit industry is NOT for you to make money. If that is what you are thinking then stop while you are behind. It is despicable that people want to start non-profits so they can make money. I'm trying to be polite here but I'm still going... to... ahhhhhh.... deep breath

There is no advantage to starting a non-profit instead of a corporation. If you want to 'do good' then start a business and donate and/or work with charities to help them. Do not go into it looking to make money by using a non-profit name. That's just wrong!

I've been working with non-profits for 10+ years now and I see people trying to do what you are talking about all time. All you do is give non-profits a bad name when you try to use them for your won advantage.

Get over this idea and move on!!!

@Roger: I really appreciate the advice. I think you are very right about what you are saying, but I think you may have misunderstood what I was trying to say.

First off, I'm not wanting to start a non-profit to make money. Rather, I want to take the time I am spending to make money, and instead spend it directly solving social problems. However, I also want to make sure I'm financially secure.

Instead of relying on donations, non-profits can generate their own revenue to finance social operations. In other words, non-profit's can start and own businesses to finance themselves. Since whoever sets this up is spending all their time solving social problems, and generating the capital necessary to solve those problems, they must pay themselves salary for that work (because it's their job now). If it were me, I would invest my salary to secure my own future (aka building wealth AND saving the world) and that's the end of it.

Everyone thinks that quitting your job/business and devoting your life to helping people means that you'll be poor. That just doesn't have to be the case. Pay yourself a fair salary for your work, and invest your salary. It's that simple.

Is paying yourself a salary okay? Well, the huge non-profits pay their leaders hundreds of thousands or millions of dollars annually. The only ones that don't are those founded and lead by people who are already loaded. I'm not advocating paying yourself that much, I'm just saying, it's okay to pay yourself a salary. If you don't need a salary, don't take one. I'm 21, so I need a salary. Besides, who decided that organizations set up to help people can't pay their people well? Who decided what a non-profit should look like or operate like? It's time for some creative solutions.

Now, I could generate this capital in my corporation, pay myself a salary and then donate everything else to my non-profit. The problem with that is taxes. Although you can write off charitable contributions, you can only write off a portion of it. I'll lose a significant portion of capital to the government, instead of it helping people.

Instead, I'm going to generate the capital inside the actual non-profit to avoid taxes, which is 100% legal since ALL the money is being used for charitable purposes anyway.

The way you interpreted what I said made it sound like I just wanted to make money by using a non-profit name-- when that is the opposite of what I want to do. I'm sure your experience in this area instantly makes you skeptical of things like this. I understand your anger because I am totally in agreement with you. I've been involved with non-profits since childhood, and I know how many guys set up a non-profit 'front' just to make easy money.

So what do you think?

[Vurlo]

I think the actual definition of social entrepreneurship is most appropriate to place here.

Social entrepreneurship is the work of a social entrepreneur. A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas a business entrepreneur typically measures performance in profit and return, a social entrepreneur assesses success in terms of the impact s/he has on society as well as in profit and return. While social entrepreneurs often work through nonprofits and citizen groups, many now are working in the private and governmental sectors and making important impacts on society.

The main aim of social entrepreneurship as well as a social enterprise is to further social and environmental goals for a good cause. Although social entrepreneurs often are associated with nonprofits, this need not be incompatible with making a profit. Social enterprises are for ‘more-than-profit,’ using using blended value business models that combine a revenue-generating business with a social-value-generating structure or component. A social entrepreneur in the twenty-first century will redefine entrepreneurship as we know it, due to their progressive business models.

en.m.wikipedia.org/wiki/Social_entrepreneurship

[Vurlo]

By the way, I'm not a lawyer or tax specialist-- I'm discussing potential ideas in this thread. Please consult with a professional before setting up a business or non-profit.

I've done more research to see if what I wanted to do was possible from a tax-exempt standpoint (a non-profit launching businesses of it's own to generate income in order to pursue it's social mission independent of donations).

What I've learned is that income generated in this way would be considered Unrelated Business Activity. This type of income would be subject to corporate taxes. Although a nonprofit can engage in unrelated business activities and pay taxes on the profit, it can get a little tricky. Too much unrelated business activity may prompt the IRS to take a second look at our 501(c)(3) tax-exempt status.

I'm going to be looking more into this. If you have experience in this area, or you would like to help figure this out, do consider joining the conversation.

[GlobalWealth]

To me, social entrepreneurship presents a real moral dilemma. If you really want to 'save the world', create a productive business, earn lots of money, and hire workers. By so doing, you will improve the social welfare by providing jobs and productivity. By making lots of money peronsally, you will improve social welfare by spending or investing it in the economy. These things are the only things that improve social welfare.

Charities, by and large, are destructive for society. They are funded by wealthy people/businesses and managed by people who did not 'create' anything. The organization always has some type of hierarchy and you must pay these people for their time. This means you are paying someone who didn't earn the money to distribute money to people who don't deserve the money (or food, clothes, etc). Once this (for example) food is distributed to these 'needy' groups, you take away their incentive to produce and destroy the local production thereby keeping that 'needy' group 'needy' forever.

If you really want to provide the social entrepreneurship to these 'needy' groups, go there and buy land and start a farm (or whatever the need is). Hire local workers and teach them to be productive. Make lots of money and spend or invest it in the local economy.

[Vurlo]

To me, social entrepreneurship presents a real moral dilemma. If you really want to 'save the world', create a productive business, earn lots of money, and hire workers. By so doing, you will improve the social welfare by providing jobs and productivity. By making lots of money peronsally, you will improve social welfare by spending or investing it in the economy. These things are the only things that improve social welfare.

Charities, by and large, are destructive for society. They are funded by wealthy people/businesses and managed by people who did not 'create' anything. The organization always has some type of hierarchy and you must pay these people for their time. This means you are paying someone who didn't earn the money to distribute money to people who don't deserve the money (or food, clothes, etc). Once this (for example) food is distributed to these 'needy' groups, you take away their incentive to produce and destroy the local production thereby keeping that 'needy' group 'needy' forever.

If you really want to provide the social entrepreneurship to these 'needy' groups, go there and buy land and start a farm (or whatever the need is). Hire local workers and teach them to be productive. Make lots of money and spend or invest it in the local economy.

You hit the nail on the head! That's exactly the type of entrepreneurial solutions I'm talking about. Charities are not helping people the way these ideas could help people.

We just need resources to go over there and implement the solutions (aka building self-sustaining, local economies or systems that address the needs). To address the issue of 'wealthy people funding, and managers getting paid to distribute', I'm thinking of an organization where entrepreneurs build businesses for a non-profit who's income would directly finance these types of activities. These people would be dedicating their lives to this purpose and would pay themselves accordingly, as they are directly generating the income.

The more I think about it, the more I see how doing this through a 'non-profit' isn't actually necessary (as Roger was suggesting). If taxes are being paid one way or another, it may be more effective to execute these ideas through normal corporations.

Thanks for your input!

[Carlos™]

I found a thread somewhere in the internet that talks about L3C...and it really goes in line with what you want to do.

[Vurlo]

I found a thread somewhere in the internet that talks about L3C...and it really goes in line with what you want to do.

Thanks for the heads up because that's very valuable information. The L3C, or low-profit limited liability company, may turn out to be a very useful tool.

I looked it up on Wikipedia, but I'll probably see if I can find some discussions and see how people are already implementing that entity type.

[rogercbryan]

You have zero understanding of what a non-profit does. You can not start a non-profit company so that you can avoid taxes. I'm so frustrated with your posts that I don't even know what to say. You're not the first person on this forum to have this unfounded idea. Please do some research on the legalities of starting a non-profit, the requirements of running a non-profit, the tax rules associated with a 501(c)3 (or other 501's). You can not do any of what you are talking about. Non-profits are not corporations in the sense that you think. You just can not do any of this... UGH!!! research research ignorance based on lack of research... I'm trying to be nice here... but it gets hard after a while.

[Vurlo]

You have zero understanding what a non-profit does. You can not start a non-profit company so that you can avoid taxes. I'm so frustrated with your posts that I don't even know what to say. You're not the first person on this forum to have this unfounded idea. Please do some research on the legalities of starting a non-profit, the requirements of running a non-profit, the tax rules associated with a 105(c)3 (or other 501's). You can not do any of what you are talking about. Non-profits are not corporations in the sense that you think. You just can not do any of this... UGH!!! research research ignorance based on lack of research... I'm trying to be nice here... but it gets hard after a while.

"I'm trying to be nice here... but it gets hard after a while."

When a person (you) gets frustrated or angered by someone trying their best to learn, that's a sign of ignorance and border-line narcissism. It's an observation that you should take seriously, but not personally. I'm sure you've helped a lot of people, but I think you would be more effective if you found a place in between "48 Laws of Power" and "How to Win Friends and Influence People." It would suit you better, in my opinion. Lighten up my friend.

You're right, I don't understand... how you keep getting hung up on the non-profit thing? I don't care if it's done through a non-profit. I just want to know the most effective way to execute the general idea.

The entire purpose of this thread is research. I've made it clear throughout all of my posts that I am actively researching how to do this and that I came here to seek advice from others who may also be doing/have done this research.

I also made it clear that non-profits do pay tax on unrelated income (income generated from businesses it owns) so that there may be no advantage to doing what I want to do through a non-profit, and I even tipped my hat to you on that.

I've read the tax laws and I've done a lot of research. You say the idea is unfounded, but I say it is still mostly untested- so there is limited information available.

"If you want to improve, be content to be thought foolish and stupid..." ~Epictetus

[rogercbryan]

I doubt you've read the tax laws...

From the 48 Laws (your violations)
Law 5 - Talking about something you know nothing about as if you do
Law 19 - I do this for a living
Law 29 - You didn't even plan in the start

And on the other book... who the hell needs friends? If you are "trying your best to learn" then please do some research... I take great offense to people who try to take advantage of the non-profit standards (even out of ignorance towards those laws and standards). Because of people like this there are constant new laws being created that stop those of us that are legitimate from getting anything done.

[Vurlo]

So according to you, starting a non-profit organization, to accomplish non-profit purposes is now called "taking advantage." You're hilarious. Maybe the American Red Cross should switch to C corp status, because they run businesses inside their organization. By your logic, they too are taking advantage of non-profit status.

Why are you still rambling on about non-profits? It was an idea, one of many, and something I would never actually do until I was absolutely positive it was the best option. And I have, in fact, read the laws. And I said "in between" the two books.

I can't say it any more clearly than this-- maybe reading it slowly or meditating on it will make it sink in for you:

1. I want to build businesses for the sole purpose of financing entrepreneurial solutions to social problems. I'll invest my salary to build my own personal wealth.

2. I want to do this in the most effective, effecient and legal way possible.

If doing this is wrong, I guess I'm one evil bastard.

If accomplishing this purpose via non-profit corporation is the answer, that's what I'm going to do. If doing this via C-corp, LLC, or L3C is the answer, that's what I'm going to do. It doesn't matter much who gets offended, so long as the job gets done. I'm not asking for your permission, or for what I can't do. I'm asking for advice about the best way to do it.

I dislike speaking this way and I don't enjoy making enemies, but some people in this world will never get a clue.

------------------------------

I have violated none of the 48 Laws here. The violations you suggested are hilarious.

Law 5 - So Much Depends on Reputation. Guard it with your Life

I came here humbly seeking information and sharing some ideas for feedback-- you say I came talking about this as if I know everything, I say you're misguided.

Law 19 - Know Who You're Dealing with. Do Not Offend the Wrong Person

You really are narcissistic. Further, you don't do anything remotely close to what I'm talking about doing "for a living." As I've learned, you run a business for the purpose of self-profit that consequently benefits real non-profit organizations. Oh, and like everyone else, you donate some time and your abilities to helping non-profits, maybe even co-founding one yourself. I know who I'm dealing with. It's commendable, but doesn't make you special.

Law 29 - Plan All the Way to the End

This thread is for the purpose of gaining the information necessary to make a plan to accomplish a purpose. What are you talking about? The plan is to learn, for now.

I'm not going to continue to argue back and forth with you, because it's people like you who block progress. You're a road block, and after some browsing, I can see that you have been one to many people on this forum (despite anything positive you've done). Instead of pointing people in the right direction, you boast your "experience" and cut them off (your not the only one either). Instead of helping me figure out the best way to accomplish this purpose, all you have to say is about how I'm wrong and how great you are.

Like anyone else that deals with people like you all the time, I laugh and blow it off. In the end your words remain inconsequential. I'm not perfect, I don't have a heart of gold, and I don't like you-- and you probably don't care and I don't either.

Here's my streak of narcissism. I think it's people like me who will make the biggest impact in this world: the ones who don't take shit from people like you and keep going.

This thread has been de-railed, so I'm finished here. For everyone else, please contact me if you have any ideas, criticisms, real experience or if you would just like to network. Don't let assholes like this guy discourage you.

Judging from all the positive emails I've gotten as a result of this thread, I have definitely struck a cord with a lot of young entrepreneurs. You can make a serious and positive difference in this world, even dedicating your entire life to that purpose, and still secure your future. We will prove it.

You are what you believe and your accomplishments will always reflect that. Change yourself in the right way, and you change the world.

[Vurlo]

Oh, and thanks for all the feedback guys!

[rogercbryan]

What if we switched direction to launching a non-profit foundation? This non-profit would build income pipelines to finance itself and tackle social problems with entrepreneurial solutions. We would pay ourselves minimal salaries that would increase as the foundation increased revenue (as we do now with a for-profit business).

and let me see..

Years from now, we could have major non-profit foundations solving real problems and still build our own personal wealth at the same time. Best of all, we can get started now!

and

Instead of relying on donations, non-profits can generate their own revenue to finance social operations. In other words, non-profit's can start and own businesses to finance themselves. Since whoever sets this up is spending all their time solving social problems, and generating the capital necessary to solve those problems, they must pay themselves salary for that work (because it's their job now). If it were me, I would invest my salary to secure my own future (aka building wealth AND saving the world) and that's the end of it.

and (I think this was one of your best statement considering that you've read all the tax codes)

Instead, I'm going to generate the capital inside the actual non-profit to avoid taxes, which is 100% legal since ALL the money is being used for charitable purposes anyway.

Brilliant!!

You may have learned a little through this thread and you may have even figured out that you made some ignorant comments in your original posts.

AND JACK ASS!!! Read a little more about me... I've raised over $10,000,000 for non-profits in the past nine years!! I've also started two reasonably successful businesses while doing so. My clients include Goodwill, Red Cross, and the Salvation Army.

Law 19 - Know Who You're Dealing with. Do Not Offend the Wrong Person

You really are narcissistic. Further, you don't do anything remotely close to what I'm talking about doing "for a living." As I've learned, you run a business for the purpose of self-profit that consequently benefits real non-profit organizations. Oh, and like everyone else, you donate some time and your abilities to helping non-profits, maybe even co-founding one yourself. I know who I'm dealing with. It's commendable, but doesn't make you special.

You were somewhat on point... when you said I "don't do anything remotely close to what (you're) talking about... I DO EXACTLY WHAT YOU ARE TALKING ABOUT!

Including starting a non-profit entity to work with the Renewable Energy Development of North America to bring gasification units to the US creating 10 jobs per instillation and reducing a mid-sized cities waste disposal by up to 20% while also contributing up to 10% of their current electricity needs through renewable processes.

Again... do a little damn research so you don't make stupid comments. Your heart may be in the right place but your head is up your....

When ever someone on this forum mentions non-profits I listen and try to help. When they make a comment that they plan on doing something unethical or even illegal I step up and I point them in the right direction. When they attack me personally I fall back on my accomplishments and I need take no further action.