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0 pointssangnoir2y ago0 comments

> They lead with the fact that it was shocking and irresponsible.

I can see where the misalignment (ha!) may be: someone deep in the VC world would reflexively think that "value destruction" of any kind is irresponsible. However, a non-profit board has a primary responsibility to its charter and mission - which doesn't compute for those with fiduciary-duty-instincts. Without getting into the specifics of this case: a non-profit's board is expected to make decisions that lose money (or not generate as much of it) if the decisions lead to results more consistent with the mission.

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s1artibartfast2y ago

>However, a non-profit board has a primary responsibility to its charter and mission - which doesn't compute for those with fiduciary-duty-instincts

Exactly. The tricky part is that board started a second for profit company with VC investors who are co-owners. This has potential for messy conflicts of interest if there is disagreement about how to run the co-venture, and each party has contractual obligations to each other.

cthalupa2y ago

> Exactly. The tricky part is that board started a second for profit company with VC investors who are co-owners. This has potential for messy conflicts of interest if there is disagreement about how to run the co-venture, and each party has contractual obligations to each other.

Anyone investing in or working for the for-profit LLC has to sign an operating agreement that states the LLC is not obligated to make a profit, all investments should be treated as donations, and that the charter and mission of the non-profit is the primary responsibility of the for-profit LLC as well.

s1artibartfast2y ago

See my other response. If you have people sign a contract that says the mission comes first, but also give them profit sharing stocks, and cap those profits at 1.1 Trillion, it is bound to cause some conflicts of interest in reality, even if it is clear who calls the shots when deciding how to balance the mission and profit

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anonymouskimmer2y ago

Just a nitpick. "Fiduciary" doesn't mean "money", it means an entity which is legally bound to the best interests of the other party. Non-profit boards and board members have fiduciary duties.

sangnoirOP2y ago

Thanks for that - indeed, I was using "fiduciary duty" in the context it's most frequently used - maximizing value accrued to stakeholders.

However, to nitpick your nitpick: for non-profits there might be no other party - just the mission. Imagine a non-profit whose mission is to preserve the history and practice of making 17th-century ivory cuff links. It's just the organisation and the mission; sometimes the mission is for the benefit of another party (or all of humanity).

anonymouskimmer2y ago

The non-profit, in my use, was the party. I guess at some point these organizations may not involve people, in which case "party" would be the wrong term to use.

ffgjgf12y ago

Of course they can only achieve their mission with funding from for profit corporations and their actions have possibly jeopardized that

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0 pointssangnoir2y ago0 comments

> They lead with the fact that it was shocking and irresponsible.

0 comments

s1artibartfast2y ago

>However, a non-profit board has a primary responsibility to its charter and mission - which doesn't compute for those with fiduciary-duty-instincts

cthalupa2y ago

s1artibartfast2y ago

1 more reply

anonymouskimmer2y ago

Just a nitpick. "Fiduciary" doesn't mean "money", it means an entity which is legally bound to the best interests of the other party. Non-profit boards and board members have fiduciary duties.

sangnoirOP2y ago

Thanks for that - indeed, I was using "fiduciary duty" in the context it's most frequently used - maximizing value accrued to stakeholders.

anonymouskimmer2y ago

The non-profit, in my use, was the party. I guess at some point these organizations may not involve people, in which case "party" would be the wrong term to use.

ffgjgf12y ago

Of course they can only achieve their mission with funding from for profit corporations and their actions have possibly jeopardized that

j / k navigate · click thread line to collapse