The Profit Box

The stated goal of Change Your World is to attract the best people to create the best solutions for a world in need of benevolent talent. Benevolent talent is the talent pool of individuals that can attract youth towards their projects. Benevolent talent create the projects that change the world. They create the umbrellas that other individuals can gather under and change their world!

To attract the best talent, which attracts the most participants, requires creating a compensation package that excites individuals. Beyond basic remuneration such as salaries or payments, Change Your World needs to foster ownership. Matthew 6:21 “where your treasure is, there your heart will be also.” How can CYW invest in the best talent and have that talent invest in them in return? Through ownership.

Unfortunately, as a hybrid charitable / for-profit organization, there are very real pitfalls that could be created by fostering an open ownership model. If talent is given an unencumbered share of CYW operations, it is very possible that conflicts of interest will occur. For example, if a member of the talent pool co-owns a chair within CYW, there is a direct conflict of interest. CYW uses that chair for a very specific purpose (such as hold meetings about anti-trafficking). However, if talent also owns the chair, that chair is their pay or remuneration. These goals are conflicting: one goal is the stable promotion of CYW, the other is the financial aims of the talent.

It should be obvious from the above, that assets of CYW should only serve one purpose: they either promote CYW and it's goals, or they are the personal wealth of staff and talent. At this point we introduce “the profit box”. The profit box is a share of CYW revenue that is only ever used for the purposes of employee or talent benefit. By setting aside a separate portion of CYW revenue for talent wealth, CYW avoids the potential for conflicts of interest. The profit box is transparent: it is a wealth generation entity of the company with the purpose of rewarding top talent.

It is recommended that 10% of CYW revenue, be set into the profit box. Initially this profit box is shared by yourself and myself. The growth of the profit box increases profit box shareholder's wealth. Since only you and I currently hold profit box shares, the only time we would release or share profit box shares is when a new talent pool member joins CYW or a sub-division with the promise of increasing overall revenue. With an increase in overall revenue, our lower percentage ownership would outperform our previous higher profit box percentage due to the new talent's ability to increase overall CYW revenue.

This profit box accomplishes three goals (beyond the obvious goal of encouraging staff to grow CYW). The first accomplishment of this system is its transparency. A 10% revenue stake is transparent to backers, funders, customers and the public. It is justifiable as a small portion of revenue necessary to promote talent acquisition and retention. The second accomplishment of the profit box is that it does not create capital conflicts of interest: the profit box serves one purpose, while the remainder of revenue is solely for the furtherance of CYW goals. Finally the profit box focuses talent members on the health of the overall organization. Talent pool members will most likely be working in sub-divisions (such as Be My Protector) or on short-term projects. Ownership of the CYW profit pool allows them to focus on the overall health of the organization – not just their project – as they have a stake in the organization.

Can you think of any disadvantages of the Profit Box? (00)

In this way it is hoped that a profit box can become an organizational feature that restricts unlimited profit motives, promotes transparency and allows for the acquisition of motivated, engaged partners and talent at CYW. If CYW uses this strategy, it can essentially provide 80-90% of its revenue directly to charitable projects (as salaries are a fixed cost, that decrease relative to growing revenue) if it commits to keeping OPEX as low as possible.

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