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Comment by marcus_holmes | Hacker News Reader

I don't understand your reasoning here. You seem to be suggesting that non-profits are owned by the American people?

Is there some part of this that I'm missing where this was true of OpenAI at some point?

I'm using the term 'owners' loosely here, but this is a much more reasonable interpretation than the interpretation that the donors are the owners.

I don't think you understand how non-profits work. Essentially they are exactly the same as for-profits, except they can't issue dividends. Ownership works exactly the same as for-profit companies.

A cynical take is that non-profits are for-salary; they still pay their owners, just using other means.

edit: no, my bad, apparently I misunderstood how non-profits work in the USA. Thanks for the correction :)

This is not correct. jongjong is correct that a nonprofit does not have owners in the sense that a for-profit has owners. Nonprofits are dedicated to their mission, and are run by a board of directors.

You cannot have a % ownership in a nonprofit because its resources must be used exclusively to carry out its mission. You could have a % control in its decision making process.

Well, its resources can be used to pay giant salaries. That's somehow not against its mission.

And businesses with owners can be dedicated to their mission.

And public businesses are run by a board of directors.

The main difference isn't what you're saying, which is somewhat subject to interpretation. It's just that people can't invest money with expectation of a return, other than via employment, speaking fees, etc etc.

They're correct about the equity ownership bit, but not in their argument that there's an implicit public claim of control.

Even more true given the mixture of the regularity of extremely high executive compensation in non-profits paired alongside the distribution of revenue through extremely inefficient contracting.

For an example of the former, the previous head head of Mozilla received a compensation that rose from about 2 million a year to nearly 7 million a year following hundreds of layoffs due to declining revenues. For an example of the latter, following the earthquake in Haiti, the American Red Cross raised nearly half a billion dollars. After all was said and done, they built a total of 6 homes. [1]

Basically, non-profit is a tax-status with conditions. But those conditions are sufficiently unenforceable or side steppable that it's ultimately just a tax status. And the whole game of OpenAI being nonprofit until profits started rolling in is just making this even more clear.

[1] - https://www.propublica.org/article/how-the-red-cross-raised-...

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