Not in the traditional sense of that phrase. Impact Makers, Inc. is a non-stock corporation registered in the Commonwealth of Virginia, but is not tax-exempt (i.e., Impact Makers pays taxes on any profits prior to distribution to its community non-profit partners). With that said, Impact Makers is structured like a non-profit; specifically, it has a volunteer Board of Directors that has overall management and fiduciary responsibility for the organization. Impact Makers has no equity ownership; we are “community-owned.” In other words, we are operated by and for the Richmond community.
Is Impact Makers a 501(c)3 organization?
No. A “501(c)3” designation simply means a tax-exempt status, and Impact Makers pays taxes like other law-abiding citizens of the community. The 501(c)3 designation refers to a subsection of the United States Internal Revenue Code that lists the type of non-profit organizations exempt from certain federal taxes. Impact Makers is structured like a “not-for-profit” organization, but it pays federal, state, and local taxes. It is similar to not-for-profit organizations that generate revenue and have restrictions on how profits are used (like certain hospitals or trade unions). The corporate charter for Impact Makers dictates that 100 percent of its profits, beyond salaries and other operating expenses, are given to designated charities.
What’s the difference between “not-for-profit” and “non-profit” organizations?
Many people prefer to use one term over the other, but there are no universally accepted definitions for either. Generally, “non-profit” is used to refer to a charity or service organization dedicated to a single human condition or primary mission. Both refer to non-stock corporations (corporations set up without equity ownership) and are run by a Board of Directors.
If Impact Makers is structured like a not-for-profit firm, how does it pay staff competitive wages?
Impact Makers operates as any for-profit firm in that it seeks to maximize revenue and minimize expenditures. As such, it can attract top talent by compensating its staff and consultants at market rates. However, unlike a traditional for-profit firm, Impact Makers gives 100 percent of its profits to charity after paying salaries, operating expenses, and taxes.
Can Impact Makers manipulate profits for personal gain?
An independent, volunteer Board of Directors holds executive leadership accountable for the management of the firm, and they decide how much revenue is held for growth (if any) and how much will be given to our community partners. They also approve all salaries and bonuses and make all decisions regarding the non-profit organizations with whom we choose to partner.
Additionally, to ensure that funds are managed appropriately, our books are open to the public. Lastly, because there is no equity in the firm, it will not be possible to later sell the firm for personal gain. This is critical because the intention of the founders is to have Impact Makers maintain its current model in perpetuity. Impact Makers is revolutionizing the way business is done in Richmond and in the nation’s consulting industry – we have effectively created a foundation in the for-profit marketplace.
Who owns Impact Makers?
Although the founders of the company maintain leadership positions, they do not own the firm. Impact Makers does not have any owners and is a non-stock corporation registered in the Commonwealth of Virginia.
Isn’t Impact Makers “socialist” in nature?
The opposite is in fact true. Impact Makers is applying capitalist principles to the non-profit world — we are like a foundation in that we distribute needed resources to Richmond community programs; however, instead of being based on charitable donations, we are a non-stock organization that is competing in the free market and generating economic value. Impact Makers is unique in that the company actually transforms the economic value it creates into social value.
What is a certified B Corp?
Certified B Corporations are a new type of corporation which uses the power of business to solve social and environmental problems. B Corps are unlike traditional businesses because they meet comprehensive and transparent social and environmental performance standards; meet higher legal accountability standards; and build business constituency for good business. For more information, visit bcorporation.net.
Will Impact Makers always meet its pledge to its charitable partners?
Yes. Regardless of our level of profitability, we will still make our minimum pledge to our charitable partners.