Speaker 1: Chelsea's with us in Fayetteville, Arkansas. Hi, Chelsea. How are you?

Speaker 2: Great.

Speaker 1: How are you doing? Better than I deserve. What's up?

Speaker 2: Well, I am thinking about starting a non-profit, and I'm wondering at what point, if any, is it okay to budget a salary for myself in the time that I would spend doing it?

Speaker 3: Well, of course. I mean, at some point, if you're going to run that full-time, you would have to figure that out. But let's back up a step. So at what stage are you in, in thinking about starting this? You've already got a business plan, an idea, a specific audience you're trying to serve. Where are you in this process?

Speaker 2: Mostly in the brainstorming. I'm looking at a subscription box for parents to disciple their children, like a family ministry.

Speaker 1: Why does it have to be non-profit?

Speaker 2: I don't know. Profit scares me.

Speaker 1: Why does profit scare you?

Speaker 2: Because it's a ministry thing.

Speaker 3: Yeah, but you know ministries have to make more money than they spend to stay open. So non-profit's a tax distinction.

Speaker 1: Non-profits still take in more than they spend or they close. Churches, any kind of ministry, has to bring in more income than it has expenses or it closes. Non-profit is not an actual difference in the income versus the expenses. It's a tax issue. It's just how you categorize the profit is all. The profit is still there. If the motive is ministry, I run a ministry. Right. Which I'm very appreciative of. I appreciate that. I'm just saying, the point is non-profit does not make something holy or right or righteous or better than the greedy old capitalist or something like that. It doesn't. So that's all I'm challenging you on because a non-profit, honestly, I have one. I have a foundation and I have another non-profit that I basically have wound down because they're more trouble than they're worth unless it's the entire model of what you're going to do. Because you've got a board. You don't have control. If you run it the way the IRS wants you to run it. So that's the only reason I'm pushing back on it. There's nothing wrong with it. So let's say that we go back to your original question, when is it okay for you to receive that? When, if you just switch shoes with your donor, where are you going to raise money? People going to give you money to cause this to happen, right? Yes. Okay. So switch shoes with your donor. Stand over in the donor's shoes. Go back at your non-profit and go, okay, they brought in $100,000 and she took a $95,000 salary. That feels icky, right?

Speaker 2: Right. Yes.

Speaker 1: Okay. They brought in $100,000 and she took $30,000 for her part-time work. That doesn't feel icky to me. Does it to you? No. So that's how you judge it. It's just switch moccasins for a minute and walk a mile on the other guy's moccasins and then you can kind of see what's going on. Because we, the Ramsey Family Foundation, we donate lots of money to ministries that we select each year in the budget, and one of the things we're looking for is the icky factor.

Speaker 3: Right. Right. And Dave, if I'm not mistaken, correct me if I'm wrong, you know more about this than I do, I would assume, but isn't there a suggested percentage of what an executive director of a non-profit should make in proportion to the amount of money that the non-profit brings

Speaker 1: in? I think there probably is, but it would probably change by the size. Yes. So like if you had something huge like the Red Cross, that would be a different percentage, it'd be a much smaller percentage.

Speaker 3: It's proportion.

Speaker 1: But if you had a small non-profit, it would usually be a larger percentage would go to staff, and so forth. So I would just say there's two things to look at. One is just don't, you know, from a standpoint of donors coming in, don't violate the icky factor and if someone challenges you on that, then they're just not one of your donors. That's okay, because you felt good about the amount that you had as a percentage of the overall for this coming budget year, you know, whatever that is. Then the second thing is, is Ken and I are both telling you, pan back a little bit and rethink why a non-profit, because if you're doing this ministry to kids, and you know, you had a percentage of, let's say you wanted to do this for kids that are underprivileged financially and kids that are privileged financially, then you might take some percentage of the ones you sell and use it to donate. Like Bombas Socks, every time you buy a pair of socks from Bombas, they give a pair of socks to the homeless. You see what I'm doing? But they're for profit. They're for profit and they've given away two million pairs of socks to homeless. Pretty strong ministry. And I've got Bombas Socks on at this moment. They used to be an advertiser for us here. That's how I got to meet the guys. And for you, you met them in New York, right?

Speaker 4: Absolutely. And I have got a pair on as well. So that's pretty high rung. And you know who did that? That's Damon John's thing. Damon John invested in them from Shark Tank, one of our speakers.

Speaker 3: Here's the thing, Chelsea, Dave's exactly right. It's about the mission for you. It's not about the classification. I would do a for profit. I keep it clean and simple. You just have less work that you have to do just to even launch a non-profit, Dave, as you know, before you've even really kind of proven the model. There's a lot of paperwork, a lot of work you got to do. I still think it's necessary in this case. Do business for good.

Speaker 1: It's okay. It's okay to do it either way. Sure. Oh, absolutely. There's nothing wrong with either way. I want the people out there that are thinking about things like this to do two things. One is understand non-profit is not in the Bible. It's not. It's nowhere in the Bible. It's an IRS tax code. So if the IRS has to anoint you holy, you're screwed. So you decide whether you're going to be holy or not based on the way you behave, the way you serve, whether you're greedy, whether you're generous, how you act and how you behave, not whether or not you make a profit. And so this thing from the communist and socialist college professors that have taught everyone that capitalism is evil has got to stop because it's inaccurate biblically. It's inaccurate in truth. There are wonderful companies that are for profit that do a great job. Again, not saying that there's anything wrong with doing a not-for-profit. I've got a good friend, Craig Groeschel, Bobby Grunwald over at Life Church. They obviously, Life Church is a not-profit and they have the largest Bible app, one of the largest apps of all of Apple. Everyone's got it on their phone and it's a complete non-profit. They give it away for free. They put money into it. It loses money every year. It's called YouVersion Bible app. They've got 500 million, half a billion people around the world using this Bible app completely free and completely donated. That thing, were it to be commercial, would be worth billions and billions of dollars as a company and that asset is owned by that church and it is an asset even though they give it away for free and it doesn't make any money because 500 million people looking at anything is an asset in this world today. That's a non-profit that's done extremely well and run with excellence. They're friends of ours. We participate providing content, Ramsey content, to the YouVersion Bible app. They're wonderful people. They're professional in how they operate the thing. It's not half-butt run like some non-profits are or some ministries are. So there's an example of when it's done right, Chelsea, like you want to do it. That's cool. But if you're going to do the kits to the kids and it's going to be for profit, you're going to collect money from the customer, it does present you with another challenge. You have to provide value. That's exactly right. And it gives you a wake-up call on that too. So it's a great discussion. I discussed a long time with Ramsey when we were starting this whether it was going to be not-for-profit. And that's how I kind of had to germinate on all these philosophies and really think through as a Christian, is it okay to make a profit? I had to go through those things. And as my friend Rabbi Lappin says, that when you serve people well, they give you certificates of appreciation with president's faces on them. They're green. And the way that we say thank you is with a tip. Thank you for serving me. Thank you. And I don't think anything about it, I'm honored to give a great server a great tip. I don't think they're a greedy capitalist. No. I'm glad they got it.