Moving Past Nonprofit vs. For-profit
Life is nuanced, subtle, and highly contextualized. Very little in this world is black and white. However, many aspects of society today are viewed through stark polarities. Good vs. bad, right vs. wrong, democrat vs. republican, socialism vs. capitalism… There is a huge amount of nuance in between each of these examples, but since it is harder to build the world in shades of grey, we simplify things into opposite buckets that are easier to comprehend and act upon. The tragedy is that the nuance and the subtlety is also the beauty. It is where we find our commonality, our shared values, and our humanity.
A prevalent and pernicious bifurcation is the split between nonprofit and for-profit. Generally speaking, the motive on the for-profit side is to maximize shareholder value, to make as much money as possible for the owners of a business or corporation. On the the non-profit side it is to do good, to make the world a better place, and to support communities and the environment in ways that are not provided for through market forces.
When we begin to inhabit the space between nonprofit and for-profit, we start to see that all organizations in the world, every single one, should focus on one thing: maximizing societal value. Providing the most amount of benefit for the largest number of people. Whether that means creating good jobs, helping people to eat healthy food, providing education, enabling access to capital, the choices are infinite. The question for an organization to ask is how are we providing value to society, what are we doing that is extracting value, and how can we maximize the former and minimize the latter. It doesn’t mean sacrificing profit. It doesn’t mean being overly idealistic, impractical, or never making tough decisions. It means understanding what impact an organization has on the world, good and bad, and consciously working to increase the positive and decrease the negative.
The lines have certainly started to blur in recent years. The focus of several movements — social enterprise, impact investing, social justice, benefit corporations, and environmental sustainability, to name a few — have in many ways worked on alleviating the schism between nonprofit and for-profit. Instead, they start to describe how to build our businesses, economic systems, and philanthropic organizations in the shade of grey between making money or doing good. Often this work is expressed as building “the new economy” or “the good economy.” However, from my perspective, they are promoting economic systems the ways they should have been in the first place, without the black and white separation of non-profit vs. for-profits.