What's your take on these newer "economic development" 501c3's? Example: https://archgrants.org/
I've talked with the founder of Arch Grants, and I don't doubt their intentions are pure (there's others I'm more skeptical of), but either way it's difficult for me to wrap my head around the concept of a non profit that is by most metrics operating as a startup accelerator giving seed funding to for-profit businesses.
Even if they did take equity, I'm not sure that would be a problem. Charities and non-profits can make investments. For example, foundations have huge market investments.
The distinction is that the owners can never cash out and put the money in their pocket.
At most, they can take a salary with justification.
If you can't cash out of equity it makes a deeply insecure situation for everyone involved. It basically becomes a weird way to perform stock buy backs and would almost certainly be immediately exploited
I dont think I understand what you are saying. Companies can already do stock buybacks with pretax money, and non-profits can already invest and hold equity.
I don't understand why a company would want to use a non-profit to buy back stock.
The point of a buyback is to destroy the stock, driving up the price. If a non-profit holds the stock, then it doesnt work.
I've talked with the founder of Arch Grants, and I don't doubt their intentions are pure (there's others I'm more skeptical of), but either way it's difficult for me to wrap my head around the concept of a non profit that is by most metrics operating as a startup accelerator giving seed funding to for-profit businesses.
*Edit:grammur