/useless comment

With that in mind, I’ll write a new post…

@Greg – I do agree that KNC was our center of focus for funding. We now need to look elsewhere. I believe that going for-profit is the easiest way to solve that issue.

However, like I stated earlier: my debate is over giving up the feel of the non-profit approach.

This is a rock and a hard place. Can we continue to exist without funding? Can we continue to exist be going for-profit?

Also, let’s face it: we hit the ground with the News Challenge in mind. For better or worse, it’s basically always been the sun we revolved around because we wanted that funding.

Again, that’s not necessarily bad because we came really close and it would be awesome, but it’s a lesson I think we’ve learned.

I’m of the opinion that the tax structure of an organization, let it be non-profit or for-profit, doesn’t dictate the culture of the organization. The people in it do. There are non-profits that are ineffective, money-wasting bureaucracies, and there are for-profits that affect a lot of change. That’s my opinion on the subject.

Being a non-profit, with all the requisite openness, sets the bar that holds the org to a standard no matter who may be in charge in the future.

Also, getting back to a VERY early discussion about non vs. for, what if the start-up capital comes in the form of an MTV-like scenario. The person/org/group giving money may also want influence on the board or something.

Non-profits have a bit of a walk-on-water ability when dealing with for-profits and other non-profits. They’re seen as non-threatening, and capable of having a partner’s interests in mind. For-profits can get that rep, but … well … it’s either hard or uncommon b/c I can’t really think of any profitable for-profits that fit that mold.

One of my frustrations, however, is this supposed difference in culture between a for-profit and a non-profit. In the social enterprise/ development sector, this is a branding battle they’re having to fight too. There’s no reason we should have to be a non-profit to have a larger mission of improving the tech capacities of newsrooms. Being a non-profit comes with a lot of paperwork and bureaucracy where the only true payoff is that we don’t have to pay taxes on company earnings. You still have to pay taxes on income, and for-profit companies can have social goals too.

The two potentially large advantages of being a for-profit corporation is that we can seek a small amount of investment and the people who are going to be working 20+ hours a week will be able to take partial ownership of the company. It really shouldn’t affect our mission and I don’t believe we should pretend that it would.

As things stand now, I think our mission, culture, vision, etc. are best served as a non-profit. Nevertheless, I think it’s time for a rate increase and a more realistic transfer/setup fee. We should also discuss whether that should be a, low hourly rate that covers the hosting lead for long hours.

I’ve come to realize that I’ve been approaching the question of for vs. non-profit very differently.

This is not a question of compensation. That, as outlined above, can be had with both options. The real question is 2 fold:

1) which method will allow us to secure funding?
2) what type of culture do we want to set?

I suspect that it will be easier to get funding as a for-profit. But I very much prefer the non-profit culture (for CoPress).

Going non-profit would probably mean that, at the end of the first year, we do a split on our profits. Eventually, salary would be covered in expenses and then the profit at the end of the year could either be split up amongst the employees or all or partially rolled into the operating expenses for the next year. With non-profit, however, you don’t split up equity in the company so the money you have the potential to make is based on excess profit and not necessarily the overall value of the company. For-profit means that equity holders have stock in the company (a percentage ownership in the company’s overall value).

In regards to hosting, at this point we’re planning on changing the terms of our service whether we go for-profit or non-profit. I think what we’ll probably do is form a partnership with a hosting company like Web Faction and take on new clients, but instead of hosting them on our own dedicated server, we’ll set them up with their own individual shared accounts and then charge a low monthly fee for guaranteed support.

How does the non-profit vs. for-profit debate impact the taking-on-more-hosting-clients vs. not-taking-on-more-hosting-clients debate, now that we know people can still get salaries/reimbursement?

In addition to talking to people with experience with startups and non-profits, we should probably also take a realistic look at what the numbers might be re: actual revenue for the various parts of our operation.

Before we make a final decision, I think we should speak directly with others who have start-up and non-profit experience. Once we do, we can caucus and report back to the board.