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giving all my company’s profits away! (Preferably without starving)

Discussion in 'Business Models, Niches, Industries' started by Chris Gleo, Apr 21, 2018.

  1. Chris Gleo
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    Chris Gleo New Contributor

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    hey everyone!

    I’m thinking about starting a c Corp that donates 100% of profits to a charitable foundation. I want to collect a reasonable salary and donate the remainder. My products competitive edge is its charitable spirit, so I want to advertise “100% of profits go to charity”
    Here are my questions...
    1. It is legal to record a CEO salary separate from corporate profits right?
    2. Is there a way to avoid double taxation with this type of structure?
    3. I can’t find a charity/foundation that meets my standards and operates within my company’s niche. So, down the road, can I have a close friend or family member create a foundation that my company will finance?

    Basically, i need to keep food on the table, but I have a cause I genuinely want to help with, and I have a great product that just needs a little extra marketing edge... any advise that could help me go from here would be absolutely amazing!

    Sorry if I’m missing something obvious or asking dumb questions... I technically haven’t finished business school yet :p
     
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  2. Kak
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    Kak Capitalist Swine Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    As far as a structure is concerned, you pretty much fit the description of a nonprofit entity. I'd look into 501c3s. Nonprofits can give to other nonprofits. You can be the CEO of the nonprofit. Avoiding double taxation in a corporation is as easy as not showing a profit. As long as your deductible giving and your salary add up to more than the corporation took in, the corp made nothing and you're only taxed on an income level. Though you'll have to file at corp and individual levels. Needless to say though. Your corporate structure should be a nonprofit.

    To answer your questions quickly:
    1. Yes
    2. Yes
    3. Yes
     
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  3. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    I currently have a company that does something similar to this. My main concerns would be, as CEO you can pay yourself whatever you want and make the company have $0 profit and donate nothing. I've seen many companies say 100% profits go to charity but nobody believes it. Even less people will believe you if 100% profits go to your own foundation.

    Does your product tie in with the charity? How can you even start this company if you don't have a charity in mind to donate your profits too? Where will your profits go if you make money next week?
     
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  4. SquatchMan
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    SquatchMan Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Why do you want to be a C-Corp?

    Anyway, 100% of profits going to charity doesn't sound like a good marketing angle, but maybe I'm too smart to fall for that trick.

    A 1-for-1 type system (like Tom's) sounds better in my opinion.
     
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    I would disclose my salary and maybe other expenses... possibly apply for a b Corp certification. I work in the field I want to support (wildlife rehabilitation) and I already have tens of thousands of social media followers that interact with my posts about wildlife. I’m just tired of the companies that pledge 10% to the cause and then keep 90% to fund their lavish lifestyles... I just want to create something that puts the cause first. Your points are very well taken though. I’ll have to brainstorm a few ideas to make sure the consumers trust my motives...
     
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  6. Chris Gleo
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    Chris Gleo New Contributor

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    I thought a c Corp was the only way to separate CEO salary from corporate profits? I’m thinking I may have to just pledge 90% to charity and keep 10% as my cut though... the “1 for 1” model doesn’t really fit with my product or cause, but I may be able to do something along those lines. I’m actually not trying to “trick” anyone haha. There’s a similar company that pledges 10% and acts like they actually care about the cause but it’s all a marketing stunt to sell more products... I want to create a company that actually cares about the cause first.
     
  7. Late Bloomer
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    Late Bloomer Gold Contributor Read Millionaire Fastlane Speedway Pass

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    I recommend you look up Derek Sivers's story. He figured he could give away more if he first had a company that made a lot of profits, and then he sold that company for a lot of money. He then gave away all of that except for just enough to live on, including some travel. I think he'd be a great mentor for you if asked him nicely. Derek Sivers
     
    LittleWolfie likes this.

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