If You Give a Bot a Brownie....or a Social Enterprise Explainer

I'll admit a bias up front: I'm prejudiced toward brownies. This is not just for obvious reasons but also because a humble tray of them helped crack one of the biggest myths in the nonprofit sector—that nonprofits shouldn't make money.

In Yonkers, NY, just a mile or so down the road from me, Greyston Bakery became famous for Open Hiring®: no resumes, interviews, or background checks for entry-level jobs. The bakery sells to major brands and, yes, makes brownies; the nonprofit side supports community programs. The brownies are not a side hustle - they're the intervention. Every batch delivers wages, dignity, and a shot at stability. Revenue doesn't corrupt the mission; it's one way it shows up in the world.

Now consider a very different product: a conversational AI that hundreds of millions use. OpenAI's structure is not identical to Greyston's, but the logic rhymes. A nonprofit parent controls a commercial operating arm that's being converted into a Public Benefit Corporation (PBC). The point of a PBC is not to abandon purpose but to write it into the company's charter and to raise the massive capital needed for compute, chips, and talent while legally balancing public benefit and shareholder interests. The nonprofit keeps mission guardrails and, as the business grows, accrues resources to pursue charitable work. Brownies and bots are worlds apart, but each uses enterprise to fuel its purpose.

And in a third lane entirely, Rollins College in Winter Park, Florida, owns The Alfond Inn, a boutique hotel with a simple proposition: all net operating income supports the Alfond Scholars program—full-ride merit scholarships that expand access and attract talent. Guests get a great hotel; students get opportunities otherwise out of reach. In this case, the business isn't the program itself (like Greyston); it's the engine that funds the program.

If profit for nonprofits unsettles you, you're not alone. We've long conflated "nonprofit" with "not money." In reality, a nonprofit is a tax status, not a business model. What the law forbids is private inurement (I love the opportunity to use that term) - insiders siphoning off the surplus - not the generation of revenue itself. In fact, earned income can make charities more resilient, less subject to the whiplash of grants, and better able to invest in quality and safety.

Three missions, three engines

1. Greyston: Mission - expand opportunity through Open Hiring® and wraparound support. Engine - a commercial bakery. Flowback - jobs as intervention; profits/brand fuel community programs.
2. OpenAI: Mission - ensure AGI benefits all of humanity. Engine -products run inside a PBC; nonprofit parent retains control. Flowback - ownership/oversight to channel resources toward safety and public-benefit work.
3. Rollins / The Alfond Inn: Mission—expand access via Alfond Scholars. Engine - a college-owned boutique hotel. Flowback -hotel net income funds scholarships.

Of course, design matters. There are clean ways and messy ways to mix mission and markets.

First, keep the mission locked. Boards should be crystal clear about why a revenue line advances the charitable purpose. When it's not closely related, house it in a separate, taxable company and run the relationship at arm's length. Dividends from a taxable subsidiary back to the charity are generally not subject to unrelated business income tax (UBIT), which is one reason to ring-fence a commercial line of business in a subsidiary. Public Benefit Corporations add another tool: access to conventional equity with a legally stated public-benefit purpose.

Second, be honest about the money. Sponsorship is not advertising. Acknowledging a supporter's name and logo is different from pitching their product. The former can often avoid UBIT; the latter usually doesn't. Donors should see clear fair-market-value disclosures for tickets and memberships—no one likes fuzzy math.

Third, manage conflicts like you're setting an example for the next generation of public servants. When people or intellectual property travel between the charity and its business affiliate, document how costs are allocated and how prices are set. Related-party deals should get a conflict-of-interest review and rely on independent benchmarks. If that sounds boring, good—that's how you know governance is working.

Critics warn of mission drift, and they're right to. A strong brand can be diluted by a clumsy product tie-in. Safety shortcuts in a rushed product cycle can boomerang on a nonprofit parent. The answer isn't to abandon enterprise altogether but to choose the right engine for the job and to drive it with the proper controls. In Greyston's case, the work itself is the program. In Rollins's case, the hotel reliably funds the scholarships that are the program. In OpenAI's case, the for-profit engine under nonprofit control is meant to fund research, safety, and public-benefit initiatives at a scale philanthropy alone can't sustain. You don't have to love brownies, boutique hotels, or bots to see the through-line: structure should serve purpose, not the other way around.

Here's a pocket guide for boards that want to keep the soul while earning the fuel:

1. Start with a mission-fit memo. For each revenue idea, write one page explaining how it advances the exempt purpose—or why it belongs in a subsidiary.
2. Pick the correct entity. If the activity is only tangential to the mission and could grow, use a taxable subsidiary (or PBC affiliate) to ring-fence risk and keep books clean.
3. Know your UBIT. Ask three questions: Is it a trade or business? Is it regularly carried on? Is it substantially related to the mission? If "yes-yes-no," expect UBIT or use a sub.
4. Draw a bright line on sponsorships. A name and logo acknowledgment is acceptable; calls-to-action, prices, and comparative claims tip you into advertising.
5. Audit conflicts annually. Re-benchmark shared-services rates, IP licenses, and any insider transactions. Put it all in the minutes.
6. Tell the story plainly. Your stakeholders can handle nuance. Explain how the revenue works, the guardrails, and why the structure protects the mission.

Will enterprise magically solve every nonprofit's problems? No. But reflexively rejecting earned income is like refusing donations because they arrive on Tuesdays. The question isn't whether money touches your mission - it already does. The question is whether you've designed the flow in a transparent, ethical, and resilient way.

Personally, I'm still biased toward brownies. But I'm even more biased toward nonprofits that keep their promises. If a tray of brownies can provide a second chance, a hotel can fund full-ride scholarships, and a chatbot can underwrite safer, more equitable technology - provided the governance is real - the nonprofit sector should welcome all three. Not because enterprise is a moral good in itself, but because, done right, it gives mission work the stability it deserves. Just remember, always stay true to your mission—whether you're serving brownies, hosting guests, or building bots.