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Comment by dmayle | Hacker News Reader

It's not about paying a salary. I've worked in non-profits before, all of the employees themselves are taking pay cuts to work for the greater good. He's asking people to give up their money in order to provide this service. A salary half that size provides an extravagant lifestyle, what he's taking is exorbitant.

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What CEO's and many other people in for-profit industries are getting, is also quit exorbitant. But that's generally accepted.

Why do some people go nuts if they see non-profits demanding high pay? Khan Academy has done something unique, helpful and truly excellent, but how dare Salman Khan wanting a cut similar to for-profits. (If it is similar, properly still less).

I think the key here is that most people equate "non-profit" with "charity". The idea is that as much money as possible is used to fund the services provided by the entity. However, there are many businesses run as non-profit entities that are not in it to provide a charity. It's just that the entity of the company is designed to take no profit. Often these entities invest heavily into growth as opposed to taking profit (and often this is even the stated goal of the organization).

If you take donations, it sounds like you should be a charity, but there are lots of examples of organizations that rely on donations, but are not charities. Basically anybody living off Patreon, for example.

Having said that, I don't think it is wrong for a donator to decide that they don't want to donate because one person is taking the lion's share of the wealth. In fact, there are for profit organisations that I will avoid simply because they don't seem to provide a service other than to line some fat cat executives' pockets. People are free to choose how they want to spend their money.

Some economists show in the paper linked below that being not for profit can be seen as a commitment for quality since you have removed from the company the incentives to exploit your consumers.

Abstract :

Entrepreneurs who start new firms may choose not-for-profit status as a means of committing to soft incentives. Such incentives protect donors, volunteers, consumers and employees from ex post expropriation of profits by the entrepreneur.

https://scholar.harvard.edu/shleifer/publications/not-profit...

I disagree with that. Most US universities are non-profits and use undergrad revenues for real estate development.

While absolutely true, a good counter example are various co-ops that are run as non-profits. Often they can not only be the best place to get high quality good, but also the only place, since they are driven by what their members want rather than trying to make the highest possible profit. However, wherever there is a lot of money, you will find people who are trying desperately to shove that money into their pockets.

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