For Profit vs. Nonprofit

“What’s Good for the Goose ‘Should’ be Good for the Gander”

This is a common phrase that denotes, “What is good for a man is equally good for a woman; or, what a man can have or do, so can a woman have or do.”  We hope this should be the case.  AND should be no different for the concepts of For-Profit verses that of Nonprofit sectors.   The same rules should apply!

In an earlier blog, I hope you are following Influence the Cause, I admitted to being part of Generation X (1965-1980).  I am going to refer back to an incredibly special charity event to lead into our blog topic for today, stemming from my generation.   In 1985, a massive epitomic of starvation was devastating parts of Africa, especially that of drought-stricken Ethiopia.   The greatest of Rock N’ Roll royalty gathered together to create a benefit concert ‘Live Aid.’  Most famously, they collaborated the top chartering song We Are The World.  With Artist Lionel Richie leading the lyrics out with: 

“There comes a time When we heed a certain call
When the world must come together as one
There are people dying
Oh, and it’s time to lend a hand to life
The greatest gift of all.”

Social Entrepreneurship and Innovation

What is the point?  Let’s look at Social Entrepreneurship and Innovation.    Does nonprofit have anything to do with changing the world or is it all driven by big business.  Both!  Nonprofit and Philanthropy is a market of love, for those that have no other.  Hence, the reference to We Are The World. The two need each other, but the frustrations of Nonprofit are the rules are not the same.

One example of this is in views of marketing, advertising, and fundraising.   In For-Profit it is entirely acceptable for them to spend on advertising that will build more donations for the Cause of their choice.   It makes that ‘Big Business X’ look like a star.   “Look, look, look” how much money we raised for Cancer or Childhood Hunger.  This does not apply to Nonprofit, who get crucified for having donation dollars going towards ANY overhead.   News flash, overhead is not negative.  By having this train of thought, it forces charities to forego what they need to do to grow.   What if some of those donation dollars did go towards advertising, in return would give MORE money to the Cause.    Just like For-Profit does, this should also be acceptable for Nonprofit.  

Big Business vs For Profit and Nonprofit

Why do we need both Big Business For-Profit and Nonprofit, how do they work together?  True, Big Business carry about 90% of the charity donation base, but what about the OTHER 10%?  This is where Nonprofit picks up the pieces and aids, the Philanthropist make sure no one is left behind.   But this Social Business needs a market.  As Dan Pallotta stated in one of his speaking seminars titled The Way We Think About Charity is Dead Wrong, saying “when you prohibit failure, you kill innovation.”

Change Perception

It is time to change the perception that Overhead is not negative in the Nonprofit sector if that overhead moves the Cause forward and benefits more people.

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