Non-profit or For-profit
We have this big distinction in the USA – and many other countries – about structuring as a non-profit entity versus for-profit. We have to recognize, though, that we’re intermingling two quite different concepts. It’s important to not get confused.
The first concept is that a non-profit is somehow heart-centered and oriented toward unselfish benefits, while a for-profit is somehow … not? So it must be profit-centered and oriented toward selfish purposes. But we’ve grown comfortable with that distinction, even though it’s inaccurate and often wrong.
The other concept we mix with this is the tax structure and, generally, the relationship with the government. Non-profits take on extra restrictions and reporting requirements in trade for being exempt from certain kinds of taxes.
So where does this overlap lead us astray?
When we assume that non-profits are always the “good guys” while for-profits are the “bad guys.” When we absolve for-profits from any kind of beneficial impact other than making shareholders rich. When we assume that non-profits can somehow not worry about solid decisions, because it might somehow not be “heart centered.”
I’ve found it helpful to focus on making an organization sustainable, to build a better balance. Not environmental sustainability, which is a great thing but a different topic.
A for-profit is more sustainable when it makes sensible financial decisions AND benefits its community. Without financials, you won’t be able to stay afloat, and you won’t have continued employees and customers.
Similarly, a non-profit is more sustainable when it makes sensible financial decisions AND benefits its community. Without financials, you won’t be able to stay afloat, and you won’t have continued employees, volunteers, and beneficiaries.
The language changes a bit, but the logic is the same. And the level of “sustainable profit” is set by external forces like government regulation or competitiveness.
If you resist calling yourself a “business,” fine, but you’re still using the same business basics to achieve your particular goals.
It’s those goals which should drive you to action and a sustainable organization!
I’d love to schedule a one-on-one call with you, to see what you and your team are up to. The call is no cost, no sales pitch – honest. How are you doing on creating your new normal?