I own a $12,000

Rolex Submariner Watch.

If you think it's real, which it's not, but it's a very convincing fake.

I had to get the band adjusted, and the jeweler told me that even as a

Folex still worth three or four hundred dollars, but let's pretend for a moment

that it's a real Rolex, and I do pretend that once or twice a year when I go to a fancy party.

Don't tell anybody.

I've sat at a table where another guy had the same watch, but probably real.

$12,000 that guy spent on the watch. And the Submariner is on the low end of Rolex's.

The Rolex Oyster Perpetual will run you $120,000.

If you find yourself a Rolex men's Daytona chronograph automatic 18-carat gold watch,

that's $500,000, half a million dollars for a watch.

Would it surprise you then to learn that Rolex is a non-profit? Or, let's be

precise here, rather it is owned by a nonprofit. The founder of Rolex, Hans Wildorf, gave all of the stock in his company to a charitable

foundation. So Rolex is itself a for-profit entity. It's a corporation which sells luxury watches

and pays sales and corporate tax therein, but the profits all go to a nonprofit, which distributes the

money to a variety of charitable causes.

So far so good. The watch company isn't avoiding taxes. It pays corporate taxes just like other

watch companies. The foundation has favorable tax treatment as a non-profit under Swiss law,

but then it is just distributing those earlier profits which have already been

taxed.

It's actually a very good hybrid model for capitalism and philanthropy.

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