Is Rolex really a non-profit organisation?
I don’t know about you, but when I hear “Rolex” I definitely don’t associate it with charity. A brand that is worth billions and provides luxurious watches for some of the wealthiest people. Naturally you would think that a brand of this nature would be all about maximizing profits for the benefit of the owners (or maybe I’m just cynical), however you would surprisingly be incorrect. Rolex is actually a non-profit organization and donates a lot of money back to the community. In this week’s blog we will be discussing what this means for the brand, how it got to this point, and where a lot of their profits actually go.
What is a non-profit organization?
The definition of a non-profit organization is:
“not intended to make a profit, but to make money for a social or political purpose or to provide a service that people need”
So basically, the company will still make profits however they are not for the financial gain of owners or shareholders, but instead to be reinvested into much bigger causes to benefit those in need.
How did Rolex become a non-profit organization?
You may be wondering how this all came about, well Rolex was founded by Hans Wilsdorf in England however he soon moved to Geneva, Switzerland and registered the company as Rolex S.A. in 1920. Hans had 100% ownership of the company.
Sadly, Hans’ wife died in 1944 so shortly after, in 1945, Hans established the Wilsdorf Foundation to commemorate his wife. In 1960 Hans moved 100% of his ownership to the foundation to ensure the longevity of Rolex and to help those in need, as he grew up an orphan.
By doing this guaranteed the safety of Rolex, as it meant that the company could not be sold, split into separate companies, or distribute dividends to shareholders. As well as this, it meant that outside investors or shareholders couldn’t have a say in how the company was run, allowing Rolex to stay true to its original values and way of business, or as Rolex said in their own words:
“Today, Hans Wilsdorf’s legacy goes on and on – perpetually – just like his self-winding watches, as he made sure that the proceeds from Rolex would be used as a continuing investment in future generations.”
Where do most of the profits go?
Because of the laws and regulations surrounding non-profit organisations in Switzerland, Rolex does not have to disclose their financial information with the public so its unsure for certain how much of their profits they donate.
Rolex is registered under Swiss law meaning they do not have to pay corporate taxes on their profits; all of their profits go straight into the foundation tax free. It is said that Rolex makes around 1 billion Francs per year so you could assume a lot of money gets donated to charity, but because they don’t have to disclose their finances this is something open to speculation.
Despite not knowing how much money is donated to charities from the foundation, we do know where the money mainly goes. There are 3 main areas where the Wilsdorf Foundation donates money: Culture, Social action, and Training/education. The foundation particularly aims to support the arts.
An example of Rolex’s generosity include when they prevented the Servette FC, Geneva’s football club from going bankrupt in 2015. In 2017 they also donated 100 million towards an art school in Geneva to build a new campus. Alongside this, they also grant scholarships to students who are less fortunate.
These are just a few examples of the charitable work that Rolex does, and its said that most of their work is done under the radar and that the company are supposedly quite secretive about it all.
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Has learning this changed your perspective on the company? I suppose it's nice to know that such a big company isn't just fuelled by greed and financial gain, but actually plays its part in helping others. Hope you've enjoyed reading, have a great day :)