Why are companies non profit?

TeddyTedson

I just download firefox 4 and watched a quick video about it. They said they are a non profit company and answer to its users?
Why are they non profit?
Are these people who make firefox working all year updating it for free?

1) Firefox
2)???
3) Non profit?

frozenbanana

non-profit doesn't mean they work for free.

The company generates enough profit to cover its running costs, including wages.

In other words, any money they make goes into the company rather than making some share-owner rich

TeddyTedson

frozenbanana wrote: »

non-profit doesn't mean they work for free.

The company generates enough profit to cover its running costs, including wages.

Ohs. So they pay their staff.
But why not try and make a profit?
So the company is worth nothing?

frozenbanana

TeddyTedson wrote: »

Ohs. So they pay their staff.
But why not try and make a profit?

There can be many reasons, usually moral or idealistic ones i imagine. And there is also customer appeal anglke.

TeddyTedson wrote: »

So the company is worth nothing?

No, it can be worth millions.

Again, non-profit doesn't mean it's not making any money, it means any profit made is put back into it.

InTheTrees

Tax

Its all about Taxes.

"non profits" are usually charities or companies that raise cash from donations.

Maybe?

frozenbanana

InTheTrees wrote: »

Tax

Its all about Taxes.

true, forgot about that.

Lapin

Channel 4 is non profit too.

It's generally ideals.. Look at all the effort put into ubuntu etc.

kraggy

Lapin wrote: »

Channel 4 is non profit too.

Indeed and it's only recently that I discovered that it is a Public Service Tv Boadcasting Channel. i.e. like the BBC, Rte etc.

Only difference is that it is not funded by the tv license fee.

Capt'n Midnight

InTheTrees wrote: »

Tax

Its all about Taxes.

"non profits" are usually charities or companies that raise cash from donations.

Maybe?

Charities here can't claim back VAT :eek:

ebixa82

Non profit doesn't mean a profit isn't generated by the company's operations. It simply means that profits made are not given out as dividends or bonuses, but instead plough them back into the company.
Somebody could still be paid a massive salary while working for a non-profit company.

jimthemental

They're communists OP, firefox isn't to be trusted. And conveniently too, wasn't that the name of the soviet plane Clint Eastwood had to steal in that film?

hartnett_mark

beyond taxes it's also good for audience/users/customers when they see that something is non-profit because they feel that is one of those good companies not bad one like Microsoft or Apple which want our money.

sbsquarepants

It's generally either down to the ideals of the owners as in the case of firefox, or for political reasons as in the case on channel 4. Years ago i used to work for Leo pharmaceuticals which is set up strangely too, its technically a foundation - basically the company owns itself, no share holders or anything like that, i think it was in the company founders will or something like that - he wanted his baby to survive forever, everybody gets their wages and everything else goes back into the back into the company.