In early February, author, vlogger, and science communicator Hank Green shared the news that he and his brother, author and vlogger John Green, “Just Sold Our Company for $0.” The company in question was Complexly, most notable for producing the free series of educational videos called “Crash Course.” The announcement attracted initial concerns that the brothers were giving up Complexly to form another private, for-profit company. Instead, the opposite occurred: John and Hank Green gave up their stake in Complexly so that they could convert it into a nonprofit.

Comparisons to OpenAI arose immediately after this announcement, with one Bluesky user dubbing the restructuring as the “reverse openai [sic].” These comparisons come on the heels of OpenAI’s own restructuring; over the past 7 years, the artificial intelligence company has converted from a nonprofit, to a nonprofit with a low-profit subsidiary, to a combined for-profit public benefit corporation and nonprofit foundation.

What would lead one company to restructure as for-profit while another as a nonprofit?

The external environment plays a major role in hiring and retention, mission ethos, fundraising, and leadership branding — each of which impacts restructuring decisions.

OpenAI: A mismatch between mission and context

What often sets a nonprofit apart from a for-profit business is a commitment to mission. Including a mission statement is a necessity when legally incorporating a 501(c)(3) nonprofit, and nonprofits are expected to adhere to their mission or risk losing their tax-exempt statuses. When OpenAI first incorporated, their mission was as follows:
OpenAI’s goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return. We think that artificial intelligence technology will help shape the 21st century, and we want to help the world build safe AI technology and ensure that AI’s benefits are as widely and evenly distributed as possible. We’re trying to build AI as part of a larger community, and we want to openly share our plans and capabilities along the way.

Another key difference between nonprofit and for-profit businesses relates to employee compensation. While companies like Google and Meta could pay their employees in stock options, OpenAI was prohibited from doing so, as it would be considered private inurement and contrary to OpenAI’s nonprofit status. Often, potential employees in the nonprofit sector are willing to take a pay cut in order to align themselves with their company’s mission. However, when the nonprofit is an outlier in a field full of high-paying for-profits, recruiting and retaining the most qualified employees can become a challenge.

Such was the case at OpenAI. In 2018, the New York Times reported that, even though the company’s top researchers make upwards $1 million or more, they may be undervalued compared to their for-profit software competitors. This compensation discrepancy could be a driving factor in retention in the AI and software engineering fields; the Times reported that, over the span of a year, OpenAI lost four top researchers to for-profit enterprises. Less than a year after the New York Times article, OpenAI split their nonprofit into two parts: a limited-profit subsidiary was created under the original nonprofit. This meant that employees could be given stocks as compensation but were limited to a return of 100 times what they put in — any returns over this rate would be funneled back to the nonprofit. OpenAI addressed the issue of hiring and retention by seeking to emulate their peers’ profit-driven, rather than mission-driven, compensation procedures.

Recruiting and retention was not the only challenge that OpenAI faced as a nonprofit. Open AI CEO Sam Altman stated that taking OpenAI public, he believes, would be the only way to generate enough money to continue building expanded AI systems. Altman was not the only voice calling for the for-profit restructuring of his company. Externally, companies invested in OpenAI with a stipulation: they would cut their contributions if the company failed to restructure to a for-profit within a year. OpenAI struggled to change venture capitalist culture of the tech industry; unable to beat their profit-minded peers, the company decided to join them.

When OpenAI announced that they would further restructure into a public benefit corporation (essentially, a mission-driven for-profit), mission credibility was the first to be criticized. While for-profits are not precluded from adhering to a mission, nonprofits are held to a higher moral standard than their for-profit counterparts. This means that when a for-profit claims to be mission-driven, the public may have less trust in the fulfillment of said mission than for nonprofits. In OpenAI’s case, the concern was that a for-profit company would be unable to balance the commodification of their product with their mission to benefit humanity with AI. Even as OpenAI was forced by state regulators to have their nonprofit board oversee their for-profit arm, critics shared fears that nonprofit control would be illusory, fail to hold the company accountable, or otherwise allow for the misuse of their charitable assets.

These fears were only exacerbated by the fact that OpenAI has changed its mission statement six times in nine years. Updating a mission statement that no longer matches the direction of a nonprofit is strategic, but repeatedly doing so communicates an inability to commit to the mission. When the mission ultimately decided on is neither context-aware nor timely, mission credibility is eroded further. In other words, OpenAI’s mission was already struggling to maintain credibility, and the for-profit restructuring became a final nail in the coffin.

The criticism OpenAI received surrounding their mission credibility was further compounded by their for-profit’s board leadership. When the company restructured into a public benefit corporation, POLITICO reported that all board members but one served for both the for-profit and nonprofit OpenAI boards. Critics stated that, faced with potential personal benefit, these dual directors may be more likely to prioritize their for-profit roles than uphold their nonprofit oversight responsibilities. In response, OpenAI has alleged that critics of their restructuring has ties to a previous, disaffected leader of the company: Elon Musk. The same Elon Musk is currently suing Altman for the decision to morph the business into a for-profit entity, with hearings beginning in late April. What started as a challenge of matching the sector-wide norms established by for-profit tech companies morphed into greater issues surrounding mission credibility, board oversight, and leadership disrepute.

Complexly: Changing to better reflect the mission

Even though Complexly started as a for-profit company, they never received the same mission skepticism as OpenAI. There may be a few reasons for this, including that the Green brothers maintained full ownership over the company until the restructuring. Complexly has always been mission-driven and communicated its mission through its educational video product. CEO Julie Walsh Smith explained that the organization, rather than having commercial appeal, tries to foster “free, independent, and trustworthy online education” — as a result, restructuring to a nonprofit and fully refusing for-profit investment bolsters the company’s mission. As the Complexly website announces, the nonprofit provides “New structure. Same mission. Bigger impact.”

As Complexly looked to expand its aforementioned impact, Hank Green revealed that the brothers considered selling the company so that it could receive a larger influx of capital and resources. Ultimately, however, they and CEO Smith settled on the nonprofit restructuring for the same purpose. As a 501(c)(3), the organization would benefit from all donations being tax deductible and the added trust that no donations will benefit the pockets of individual owners.

Complexly had previously received vast philanthropic contributions from the public, organizations like PBS and the Alfred P. Sloan Foundation, and partners such as Arizona State University and the Howard Hughes Medical Institute. However, while individuals would normally not hesitate to make smaller gifts, large donors expressed reservations about giving to a for-profit organization. In his announcement of the restructuring, Hank Green recognized and appreciated individuals’ past trust that the for-profit Complexly would not use donated funds for personal benefit. When Green ended his announcement video with a call for donations (“I've heard that one of my responsibilities as chairman of the board is to help drum up some larger donations,” he added), he shared the tax-deductible status as an implicit mark of credibility. Although tax deductions tend not to be a driving force in compelling donations, this announcement was different – it served as shorthand for mission fulfillment, organizational change, and the hope of expanded, future impact.

Complexly’s product was already aligned with a nonprofit mission to provide free and trustworthy education to all people. As a result, no criticism surfaced about mission credibility in transitioning from a for-profit to a nonprofit; instead, leadership primarily impacted how the public received the restructuring news. At Complexly, John and Hank Green’s leadership is directly tied to the organization’s brand: the two have appeared in Complexly’s videos, and fans followed along on their shared YouTube channel as the two founded and built their company over the course of a decade. Despite neither formally running the company — Julie Walsh Smith has been Complexly’s CEO since 2023 — fans continue to conflate the Green brothers’ role as founders with them being current leaders. In fact, the only negative response to the restructuring that I could find was related to the brothers’ involvement: “it's sad to see the green brothers give up more and more control of the project,” one ambivalent Bluesky user shared.

John and Hank Green, anticipating this potential reaction, attempted to mitigate leadership concerns when announcing the restructuring. The Complexly homepage states that the brothers “will continue to be involved as they have been for the last couple years.” Furthermore, John is receiving the title of “Founder Emeritus” while Hank is taking a position on the organization’s board, evidence to continued leadership within the organization. John and Hank Green’s knowledge of how the public views their organization’s leadership helped mitigate scrutiny in times of change.

The big takeaway: know your internal and external contexts.

What OpenAI and Complexly highlight is that what benefits an organization in one context serves as an obstacle in another. Although OpenAI struggled with retention in a nonprofit context, few other industries compensate employees with stock options. While the public bought into Complexly’s mission as a for-profit, OpenAI’s actions did not inspire similar confidence in their own mission. As Complexly brings in a majority of its revenue from individual donations, OpenAI was compelled to accommodate its venture capital-heavy, for-profit context. Determining the best structure for an organization, then, may ultimately entail a detailed knowledge of internal and external contexts: what factors within the organization, its sector and communities served may serve as opportunities or threats for a potential for- or nonprofit? Thoroughly investigating an organization’s operating context may uncover that no aspect of a proposed structure is a given — just because many regional theatre companies are nonprofit, for example, does not mean that that choice should be a default.

Understanding internal and external environments is not a one-time activity. It is likely that an organization’s operating context changes over time, and emerging opportunities and threats within a field may drive a company’s restructuring. Similar to how leadership affected Complexly’s and OpenAI’s brands during restructuring, investigating operating contexts can highlight areas that need greater attention in times of change. No organization exists in a vacuum, so learning about a company’s internal and external environments strengthens strategic decision-making over the course of its lifetime.

Written by Bria Weisz, a graduate student in the M.F.A. in Theatre - Arts Leadership program at Virginia Tech.