Profit 4 Good Criteria

At its heart, the Profit 4 Good movement hinges on one clear choice: using business to make the world better, not to enrich private shareholders.

Our Definition of a Profit 4 Good Business

To be listed as a verified Profit 4 Good Business in our directory, an entity must meet three structural criteria:

1. Distinct Business Entity

It must operate as a standalone registered commercial business or company - rather than a charity, trust, or foundation trading directly under its own banner.

Note on Ownership: A Profit 4 Good commercial business may be 100% owned by a parent charitable trust, foundation, or purpose trust, provided the business itself remains a distinct, tax-paying or tax-reporting corporate entity in its home jurisdiction.

2. 100% Net Profit Directed to Charitable Purposes

Every dollar of net profit must be dedicated to charitable purposes.

To ensure commercial viability while protecting mission integrity, we define this as follows:

  • What is Allowed: Standard operational expenses, fair market-rate staff and executive compensation, and retaining necessary capital/cash reserves for business growth, expansion, and long-term sustainability.
  • What is Prohibited: Paying dividends, equity distributions, or private windfalls to individual shareholders, investors, or founders for personal financial gain.
  • The Core Rule: 100% of net profit remaining after necessary business operating costs and strategic reinvestment must be donated or channeled directly toward charitable purposes.
  • International Business Pathways: There are multiple legal and tax-effective pathways a business can use depending on its operating region (e.g., NZ, Australia, USA, UK, Canada). Click here to explore the primary Profit 4 Good Business Pathways available worldwide.
Definition of "Charitable Purposes"

Profits must clearly support public benefit initiatives. This may include (but is not limited to): clean water projects, global development, micro-finance, developing-nation infrastructure, environmental and wildlife conservation, animal welfare, human welfare, acute healthcare or housing, and programs providing employment or vocational training for individuals with disabilities or high support needs.

3. Ethical Accountability & Governance

We require a clear structural framework separating marketplace operations from the ultimate deployment of profits, evaluated through two distinct lenses:

  • Charity-Owned Trading Arms: For commercial operations built from the ground up to directly serve a parent charity's mission (like Trade Aid or Hamodava Coffee), it is completely normal and expected for the charity's trustees to also sit as directors of the trading business. Because the entity is widely recognized as a unified trading arm of the charity, this overlap ensures the social mission remains the top operational priority.
  • Commercial-First Brands: If a business functions primarily as a competitive commercial brand in the open market, we require a strong separation of powers. An objective majority of the parent charity's trustees must be independent of day-to-day business operations. This ensures the commercial entity remains genuinely accountable to an independent charitable board, preventing the profit loop from being used to serve internal corporate interests rather than the public good.