Non-Profits & The Business of Social Good

C Now - DePaulRecently, I found myself involved in a discussion on a Facebook group focusing on comments made in a recent TED talk and in another person's blog post. It leads me to the topic of today's blog, which is Who drives social good more effectively - non-profits or private business?

It's a question that has a major impact in Chicago - after all, we have a thriving non-profit community, as well as a growing interest in social
entrepreneurship and social ventures
(and admittedly, I have an interest in both sides). It may not sound like much of a conflict, but allow me to try to outline the arguments on both sides:

  • Non-Profits enjoy kind of a unique status - because of their business
    structure, they can focus primarily on education and advocacy but lose some key benefits (such as the ability to lobby directly). Non-profits also have unique financial reporting requirements, and can focus less on meeting shareholder and profit requirements and more on promoting a mission. (It does not mean that non-profits can't make money - only that any 'profit' goes back into its programming). Non-profits often find themselves working with minimal resources, focusing on fundraising and donor cultivation, and often believing that because they are uniquely mission-focused, they do not have to
    necessarily focus on the "business" side of their agency.
  • Social Ventures and Social Enterprises, which are businesses that have a socially beneficial mission, are the up-and-comer. There are a variety of unique business structures (such as the L3C and the B Corporation) that allow them greater flexibility, and unlike non-profits, they can focus more on stakeholder and profit requirements. Unlike non-profits, however, a social venture's "mission" might be more tenuous, seen as primarily a way to gain credibility rather than out of a sense of community. Businesses are regarded with a certain level of skepticism....and therefore, even socially-minded businesses and enterprises are seen with a higher level of disdain.

These issues have been at the forefront of my mind - not just as a person with professional interests, but also as a job seeker, inspired in part by this article on "cheating" in social media. From my perspective, well....I have a slightly unique perspective, offered in the spirit of driving further consideration and conversation.

Businesses can do several things that non-profits can't do, and non-profits can do things businesses can't do. Both businesses and non-profits tend to believe themselves to be "terminally unique", somehow so special that they feel slightly detached from normal rules of engagement. When it comes to driving social good and social benefit, neither entity has a monopoly on driving beneficial causes - that every organization, regardless of business type or IRS status, has a particular role to play, and that perhaps the issue isn't "What makes businesses more beneficial than non-profits?" or "What makes non-profits more beneficial than businesses?", but "How can non-profits and businesses collaborate and cross-pollinate each other's best practices in driving the greatest social benefit for everyone?".

It's not an easy question, to be sure, nor is it one that has an easy answer (although Dan Palotta seems to be thinking along similar lines to my own)....but it's worth further discussion. Who would have thought that Facebook might lead to deep conversation and consideration?

Any thoughts? Please feel free to leave them below, and if you wish to contact me personally, please feel free to do so either via Linked In (please 
mention Chicago Now in your note) or my web page contact form. And as always - thanks for reading!

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