Business Created To Give Away All Its Profits : Charities: There hasn’t been much left over to contribute, but the owner of Pax Publishing, which serves only nonprofit agencies, says worthy causes will get the excess.
Pax Publishing, a tiny newsletter production company, is a rare animal indeed--a business that gives its profits away.
Some might say it’s not really a business at all. The 2-year-old organization is chartered as a nonprofit public benefit corporation, though it does not have tax-exempt status.
And the company works only for other nonprofit organizations, charging them bargain-basement rates for producing newsletters, brochures and direct-mail pieces. So far, the company’s founders say, there hasn’t been much in the way of profit to give away.
But the two-person firm, founded by 29-year-old disarmament activist Richard Hamel, provides some of the same services as a commercial graphics arts company. Pax will convert a nonprofit group’s raw text into a smart-looking newsletter and handle all the printing and mailing for as little as half the regular market price for such services.
For nonprofit organizations ranging from the Natural History Foundation of Orange County to Medical Aid for El Salvador, that has proven to be an attractive offer. These groups often rely on newsletters as their key fund-raising vehicle--and in some cases the only mechanism for communicating with supporters--but they rarely have in-house graphic artists or typesetting equipment to produce their own.
“They’re too busy and don’t have the skills for certain tasks,” Hamel said. “We saw that the nonprofits needed a resource.”
With contracts for more than 30 newsletters and a smattering of direct mail letters, brochures and annual reports, Pax seems to have found a niche. The group charges just $375 for the design and layout of a four-page newsletter, Hamel said, contrasted with the going commercial rate of $650 to $700.
Pax also has a special arrangement with GS&W; Printing & Mailing in Walnut--chosen in part because it has a union work force--to print the newsletters at discount rates.
“I don’t know how he does what he does for as little as he does,” said John Eckeard, director of printing at GS&W.; “At first, I didn’t think he could stay in business with his giveaway prices. But he’s a very dedicated individual.”
He said Pax gets a discount of 10% to 15% off GS&W;’s usual rate. The printing firm supports Pax for several reasons, Eckeard said, including liberal political philosophy.
And he also said Hamel is very professional. “He gives us very clean artwork, and the jobs always come in as they are quoted. That makes our job a lot easier. It’s enjoyable to work with him.”
Several other suppliers, including Graphic Design Services, a Brea typesetting shop, also give Pax preferential rates.
Pax customers are lavish in their praise. “They’re very aware of how nonprofits operate, so they can work with us and help us in developing and package our material,” said Laurie Battin, who is in charge of developing literature at Medical Aid for El Salvador in Los Angeles.
“We save 40% to 50% on our costs, and we get a lot of personal attention from Pax. We like that a lot,” she added.
Gary Bess, executive director of the Los Angeles Free Clinic, said Pax’s flexibility and “understanding of the nonprofit culture” were extremely valuable.
For Hamel, who had grown weary of uncompensated 18-hour days working for the disarmament movement, Pax provides a means of remaining committed to liberal causes while having something approaching a normal job.
But it’s not quite like moving to the private sector. Hamel said he pays himself just $1,500 a month, and Pax operates out of a spartan office in downtown Santa Ana that it shares with the peace group Alliance for Survival.
“We want to keep the money in the nonprofit community,” Hamel said. If Pax does eventually earn a profit, “we’ll give it to anything from AIDS research to helping the homeless to peace organizations,” he added.
And Hamel has ambitious plans to begin providing other services for nonprofits, such as event planning and public relations. Hamel said there are 3,000 nonprofit groups in Orange County, 5,000 in Los Angeles and 30,000 statewide. So the nonprofit for nonprofits would seem to have plenty of room to grow.
