Sister Florence has a problem with her nephew. She has sworn a vow of poverty, and her nephew is a banker who makes north of a million dollars a year. He helps some companies buy and sell other companies while his company takes a slice of the proceeds in return. Sister Florence sees little if any social good coming from her nephew’s efforts and all those wasted profits..
What Sister Florence misunderstands, is that her nephew doesn’t make profit for his employer, he makes revenue. There is a huge difference. Revenue is the fuel that allows a company to run. It is the fuel that is put into the tank, powers the organization, and pays the employees, rent, and taxes. It is what pays for the airline tickets as well as the staples.
Profit on the other hand, is what is left after all those costs and bills have been paid. Many companies do not make any profit some years. Those that do find that number is often very small – typically less than 10% of revenue. So for every revenue dollar that comes in, maybe one nickel or dime ends up being what the company makes – the profit.
Corporate profits are used to help a company grow – through acquisition or paid in bonuses and perks to the employees who help increase the revenue. Most companies also donate a proceed of their profits to civic causes that make better places to live and work.
Sister Florence may have mixed emotions about what the company does with its profit, but she should understand that its revenue is almost completely directed at the public good. That revenue allows the Company to employ people. And not just high paid bankers like her nephew, but also the executive assistants, the financial analysts fresh out of college, and the fellow in the mailroom.
These people pay taxes, support their local schools, and tithe their churches. The Company pays rent to the building owners who support her community. All of these people buy things from the local stores which employ local people. Every penny the Company spends – even that which some may considered wasted – benefits a person somewhere who has the capacity to use it for good.
Meanwhile, the Company pays taxes which allow for the existence of the social programs that Sister Florence supports.
Still, Sister Florence may question why the bank needs to pay her nephew so much. But certainly she would prefer that he receive it rather than have his employee keep it. It was already noted that she is ambivalent with what the company does with its profit, but she certainly cares what her nephew does with his earnings.
Rather than being critical of her nephew for making so much money, she should be gracious of a system that allows him to do so well. Rather than passive-aggressively shunning him, her energies would be better spent cheerfully pressing him to increase his annual giving.