Quote:
Originally Posted by Platapus
The confusion is the intermixing of two definitions. The first being the economic definition of a profit and the other a legal definition of profit in the context of distribution of profit. This is a common confusion.
NPOs have to make an economic profit (income > expenses). However, NPOs can't distribute profit to shareholders and the like. NPOs must reinvest their economic profit back into the organization. Where a for profit corporation does not have to. The "non profit" in Non Profit Organizations deals with the legal definitions of profit in the context of distribution.
I work for a NPO and I knock down six figures and I am one of the minions. I do make a little less than a counter part in a For Profit Corporation, but not by much. NPO does not mean volunteer nor starvation wages.  My NPO has to make an economic profit in order for us to grow. Growth is an important factor in NPOs.
In operation, there is actually little difference between an NPO and a for profit corporation other than restrictions on how economic profits can be distributed. NPOs must distribute economic profits within the organization and For Profit organizations can distribute profits outside the corporation.
Short summary: NPOs have legal restrictions on how they can use Profit.
The use of the term "Profit" in Non-Profit Organizations is confusing and can mislead the public into thinking that they don't make a profit like the other money-grubbing for profit corporations. NPOs are just as money grubbing as the rest. 
They have to be in order to stay in business.
So if we were to make all hospitals Non-profit organizations, they would still be able to pay doctors the same salary they get in For Profit hospitals. |
Someone has a brain...
NPO's pay almost exactly the same as for profits to employees, have benefits, ect. What it stops is the rape of executives to pay themselves millions in salary and millions more in bonuses and profit, yet the controlling members are always paid very well.
Take Pharma..
"Many companies have even put their marketers in charge of their laboratories. At Pfizer, there was a program called CRAM, which stood for Central Research Assists Marketing. The name made it clear that the marketers were in charge.
The whole focus of the industry has changed. The drug companies center their efforts on medicines for chronic conditions that affect large portions of the American public — and therefore have vast potential markets — things like heartburn, depression, allergies, blood pressure.
Even inside the labs, the scientists are told to focus only on drugs that could become billion-dollar sellers. That’s why we have six drugs to lower cholesterol that all work in the same way. And yet millions of very sick patients have no treatments."
They're several studies showing now big Pharm ignores studying medicines that actually heal and put their effort in meds to treat symptoms of chronic illness, the goal to keep someone sick as long as possible on as many pills as possible....very profitable.
Why we see a commercial every second scaring us that we need this pill for gas, depression, ect...Always some happy beautiful person taking the pill.
In the last several years since marketers run the labs, death due to over or incorrect prescription use have gone up 400% in 10 years. Many Doctors have little clue what the meds they give out do now. Studies show over 70% of americans take too many or wrong presciptions. Why, because health is tied to profit. Also Pharm has stopped making many meds that work well, because no profit in them.
Should our government not protect us from this?
Tort reform...would correct itself if health wasn't for mass profit.
Insurance corps work basically the same way. This is why were in such a mess.