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Business Strategy: I have an idea for a business that has a philanthropic angle as its main appeal. Any tips on managing the fact the co will still be making a profit?
DC
DC
David C Barnett, I help you buy, sell, plan, value a business answered:

There are lots of great companies that make a profit while helping others. Many times, these companies are formatted as a pair of companies. For example: 'Helpco is a not-for profit corporation that does X and donates proceeds of it's activities to Y.' What is not part of the headline is that Helpco has a management contract in place for administration and operations with ForProfitConsultCo.
Helpco pays ForProfitConsultCo a fee for managing its day to day operations and this is where the salaries reside and the profits for your efforts.
If you look carefully, there are examples of this kind of arrangement everywhere.
I can think of one credit counselling company near me that advertises the fact that they are a not-for-profit and I know the owner is paid a respectable salary via a management contract.
I hope this helps.

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