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Non-Profit Engineering Firm 3

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HamburgerHelper

HamburgerHelper

Electrical
Aug 20, 2014
1,127
Has anyone heard of a non-profit engineering firm? In a very brief look, I saw that their are provisions for scientific organizations. I imagine that you could pay employees more if you had this designation by avoiding taxes.

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They exist, but I doubt that the pay is going to be that great; in some senses, the pressure on wages would seem to be even higher than in a for-profit company, since donations and funding will always needed to be stretched to the maximum.


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EnergyProfessional said:
This is a non-profit organization. It was not planned this way - it just happened.
Click to expand...

Happens to a lot of engineering firms!

 
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EnergyProfessional said:
This is a non-profit organization. It was not planned this way - it just happened.
Click to expand...

Happens to a lot of corporate divisions too!

Division makes a profit, and executives increase bonuses until division is non-profit.
 
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Very difficult to distinguish due to the similar terminology:

"Non-profit organizations" define themselves with goals that do not emphasize profit but rather service to specific groups.
"Not-profit organizations" avoid setting goals, emphasize efficiency rather than activities such as sales or production.


 
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Arup is employee owned and basically non-profit. They have >10,000 staff, and have been that way since the 70's. At one point in relatively recent history they were one of the best firms in the world too (when I worked there!)

Gensler is an architecture practice with a similar business structure and size, but always with a more commercial project mix (the irony!). They are relatively profitable too, and distribute all their profits annually to staff.
 
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neither of those are "non profit", they are just "employee owned" and the profit gets distributed to the owners just like any other "for profit" business
 
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There is also RedR, which is Registered Engineers for Disaster Relief, a little bit like Medicine Sans Frontier, and has a formal "charity" structure, relying on philanthropists for donations etc.

I can tell you from working at Arup in the olden days at least that there was a palpable sense of it having a "mission", and not just being about money. Consulting engineers in general have that going on - we are like the monks of the construction world, seekers of truth and shunners of the corrupting influence of money.
 
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I was working in what can only be politely referred to as an "economically depressed" area yesterday, and it got me thinking along these lines. In particular, I saw a cantilevered wood balcony off the back of a house that is clearly not maintained. At all. Nothing scary or reportable right now, but give it 10 years and it may just be on the news. The building departments in my area are understaffed and stretched beyond reasonable limits just with standard construction inspections. If a tenant who can barely keep from getting evicted or keep food on the table has a problem that the landlord ignores, who do they call? Those with federal assistance often have some sort of social worker or similar that they could contact, but what about those hovering just above that level? Seems like a good place for either large firms to set aside pro-bono hours to help or benefactors to fund at-cost hours from smaller outfits.

Mind you, this is actual non-profit work, not the tax avoidance scheme the OP seems to be searching for.
 
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I wonder how that works within the boundaries of engineering codes of ethics. Generally an engineer should ensure fair (market value?) remuneration for the professional service offered.

As an example, here is an excerpt from the APEGBC code of ethics:

(5) uphold the principle of appropriate and adequate compensation for the performance of engineering and geoscience work;

 
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drawoh,

I just want to grow a business to service an industry and make a reasonable amount of money doing it. For example, what would stop me from starting a business that services the renewables industry and operates as a non-profit? I expect or want to pay good employees well and really have no problems with me taking home a little less if I can build a strong foundation of strong employees. I generally most problems at firms relate back to poor compensation causing staffing issues. An engineer who makes 30% more for example likely has 10-15 years more in experience. I just see a non-profit as a way to possibly avoid taxes and make it easier to meet those goals. I don't quite why it is harder to compensate employees better under as a non-profit. I am just distributing profits or always investing in something to grow the business.

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If you can't explain it to a six year old, you don't understand it yourself.
 
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Right...that's not a non-profit business for tax purposes. That's a for profit business that intentionally doesn't turn a profit but increasing overhead (employee compensation) either consistently (through salaries) or as a sporadically (as bonuses).

Talk to a CPA first - they'll keep you from running afoul of the IRS.
 
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I think the OP was asking about employee owned firms, not "non-profit". Yes truly giving your firm over for the betterment of humanity is amazing, but simply treating your employees well is ok too.

I would also look into ESOP's (employee stock ownership plans).
 
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There are plenty of "non profit" engineering firms at the moment...

I think though you mean "not for profit", i.e. the aim is not to make a profit for shareholders, though this is usually achieved by charging less rather than paying employees more.

Given the very low profitability of a lot of companies, there isn't much leeway either way and all it really means is that the company often needs support from individuals, governments or charitable institutions in order to survive as their capital base is low and they don't have any retained profits to smooth out the dips and troughs, not to mention doing work at low or no cost for certain clients.

This is a none profit organisation doing great work and typical of a not for profit organisation
Remember - More details = better answers
Also: If you get a response it's polite to respond to it.
 
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