Surplus sounds like anything beyond hosting costs to run the service, but the hosting costs is likely no where near 5 million dollars so a majority of it is surplus.
Does that mean no one gets a salary or is a salary part of the costs to run the business instead of being a "member"? If salaries are included who dictates what the income tax exempt salary is?
I'm not trolling either. What you're describing sounds like a way to run a business where you can avoid paying income tax while still getting a salary because realistically I doubt the creator of Ghost is living in a homeless shelter and working off public library computers.
The $5m over 6 years is $833k in revenue per year. Not a lot, and salaries/benefits probably take up the biggest part of that, leaving very little profit. Which is the way it should be everywhere in my opinion.
I applied to work at Ghost a while back and still would love to work for them. Not only do they get salaries, they have amazing benefits (by US standards). Being a non-profit means two things: a) profits are reinvested in the business rather than distributed to owners, and b) Ghost isn’t, and can never be, an acquisition target by other companies or investors. That kind of stability is a huge appeal for me, both as a user and a worker.
Part of the goal of this community is for its participants to learn things they don’t know; the tone implied by the intro to your comment makes it seem offensive that somebody wouldn’t realize US non-profit status still allows for salaries and benefits for their staff.
https://www.erieri.com/blog/post/top-10-highest-paid-ceos-at...
These are all medical, so that is the right comparison, but charities can also have high salaries:
https://www.charitywatch.org/top-charity-salaries
And, I am not taking a position here, but if you feel strongly that this should not be the case, there is this video for the counter-argument:
https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...
My guess is that Ghost pays competitive salaries to its rank and file, a generous salary to its CEO, and uses the rest of the money to either fund exploratory work, educate its target industry, and/or lobby politicians. That's how most nonprofits appear to work.
This is in contrast to for-profit companies where that money can go to the owner (private company), or to shareholders (public company).
The Wikipedia link posted above probably has a better explanation, this is just my understanding due to my SO working at one.
I wonder where the line is drawn on that.
For example, can the CEO buy a house to live in and then claim it's investing in the business because that's where he works remotely once in a while?
Also on the salary itself, do you pay regular income tax on that (separate from the company, but as an individual receiving a salary)?
Also, public non-profits must release regular reports on their finances. So, contributors can decide for themselves whether the funds are being used appropriately. That's the basis for sites like https://www.charitynavigator.org [1] and https://www.guidestar.org
One particularly important metric is how much the organization spends on overhead vs how much is spent directly furthering their cause.
[0] Religious organizations seem to play by a different set of rules, but thats neither here nor there.
[1] A non-profit is not necessarily a charity, but this gives you an idea of how both can be evaluated.
Everything else operates the same. People have jobs and get salaries. The company sells things and makes revenue. It can make profits if it makes more than it spends. Nonprofits can have millions sitting in their account but that money doesn't belong to any person because there's no ownership, and usually the bylaws and govt regulations mandate they reinvest it into the business aggressively.
I'm not exactly sure what happens if the founders decide their salaries will be $1m/year. I'm not aware of anything explicitly stopping that - some charities pay their CEOs hundreds of thousands.
