| Not to take a side, because you're right that there are a lot of ways people exploit this, but there are reasons why a charity may legitimately want to invest. > Investing, on the other hand, seems like the opposite of "non-profit" There's two ways to look at this. You can consider investing in the capitalist sense where you're trying to make money and profit, and maybe the managers exploit the system, but you can consider it in a different perspective: wealth preservation and time-deferral of resources to reduce economic dependency of donations. For example, universities often have large endowments. Universities take in small streams of money which may fluctuate with the economy and occasional massive donations, and then once a decade build a very expensive building. They probably want to protect the monies in that constant stream from inflation and economic cycles until they need to build a new building. Beyond time-deferral of resources, sometimes universities (or alum) establish a fund that should pay out continuously for eg. scholarships. By donating $1M, you can provide a 50k payout (5%) to a student, forever, and see modest growth of the fund above that (eg. ~2%) to cover inflation. This ensures that a one-time act of charity can last more than a few years. > I've recently been introduced to a few folks who seem to be doing extraordinarily well financially. It turns out that they all run "non-profits. Yea, maybe we need to consider the exploitation of non-profit exemptions and how it can be "self serving". But consider an alternative story: rich parents give their kids a lot of money, so they don't need to work to pay bills. This frees them to work low-pay charitable jobs because they have a separate trust fund to cover cost of living. |