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Originally Posted by GT40FIED
They do profit since, much like The Red Cross, they often take in much more money than they give back. That's known as profit. A lot of that money goes into the arch diocese and god only knows what they do with it.
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Profit - (prft) - The return received on a business undertaking after all operating expenses have been met.
1. The return received on an investment after all charges have been paid. Often used in the plural.
2. The rate of increase in the net worth of a business enterprise in a given accounting period.
3. Income received from investments or property.
4. The amount received for a commodity or service in excess of the original cost.
now by those definitions you can take in money and use it to pay your staff, pay your bills, pay for your building, hold "activities" for your parish, and then give the remainder to charity or whatever other organization that needs the money and still be a non-profit.
they are not "turning" a profit just because they have to pay employees and the bills, now if they ran it like a business, minimized costs, held onto and invested the money for the purpous of increasing the stockholders share, then they are a for-profit org. since churches have no business value, do not build net worth, and dont pay their CEO/CFO/chairman/president/etc equvilient in % earnings then by definition they are a NPO... correct?
by building huge churches worht millions of dollars you at least see where a chunck of the money is going. and some people want to have a nice church instead of a hole in the wall, so they donate money to their church to help them pay the bills... just cause they are tax-exempt dosnt mean that they get everything for free. they still operate with that good old dollar.
as for who is and isnt a church... the gov decides. if your an established religion, opposed to a cult, which is basically a religion that dosnt get the gov benefits, then you apply to the government for your tax-exempt status. its really simple, and with alittle research into the business of NPOs you'd understand alot better how it all works. we touched this in a few of my accounting classes, how NPOs work and all, but im a little rusty so im not going to try and explane any more than i did.
NPOs being mismanaged is not very supprising. they are not for profit, so there is no modivation from a business standpoint to be economical in their decisions. they use what they have for what they need at that moment. corperations work so well because they think long term about the pros and cons of spending money to increase company value, a NPO such as the red cross may send and pay 100 people to go somewhere that is in need of help, then dump money on the supplies they can use not thinking of well are we spending too much so our stock dosnt drop or are we doing this or that.... no they think demand says we need 45 widgets today for all 45 people who want one, so we will buy them today. a corperation will think how many are we going to see the biggest return on, and if we buy less we can charge more than X amount. how can we minimize our labor costs.. ect. qa whole slurry of new issues that a NPO dosnt even consider
its all different ways of doing business. you wana make money then your efficient. you want to help people your gonna spend as you see fit at that moment. thats my theory on how tons is wasted through NPOs... but no one else would do it