Non-profit vs For-Profit

Bringing us back to an earlier time in the course (can't believe we were ever there), a conversation with a friend recently brought up the question of how to choose between being a non-profit or a for profit. My friends recent venture, which I have posted about before, is still in the beginning stages and someone suggested potentially declaring it a non-profit organization citing better funding opportunities, grants, and the like. My friend considering that route asked for my input leading me on a search to answer the question for profit or non-profit.

Many of our social ventures could be structured as a non-profit or a for profit, similar to my friend's company. However, how do you know what the best option is? Apparently this debate is not uncommon in the social enterprise world. Search results on Google led me to another blog from a social entrepreneurship major who posted about this same thing. He gave two examples of social ventures which chose different routes: TOMS shoes (for profit) and Delancey Street Foundation (non-profit). Both have been extremely successful ventures that have had a positive impact on people while operating in different ways. The interesting part of Delancey Street Foundation is it actually opens social enterprises that not only benefits the community but also raise capital. However, the foundation itself is a non-profit so it can also receive donations and grants. The blog ends with no firm conclusion on which is the best way to go; however, the writer has hope that a new sort of model with arise bridging the gap between the two arenas.

Another article I found in my search, titled Why NonProfits Should Fear Social Enterprise, presents a less optimistic view about the non-profit field calling them "cumbersome, awkward, slow, and unwelcoming to new and different ideas." While I don't completely agree with this comment, the article did provide some interesting comments about the future of non-profits and the ability of social enterprises to replace non-profits while delivering beneficial services in a more effective, efficient, and timely manner. The writer hints that non-profits should adopt some of the strategies and qualities of social ventures so they don't fall by the wayside. He ends with the perfect saying "Open the doors of opportunity within your organization or more than likely a social enterprise will open it without you."

While neither of these articles, nor the others I read, helped me come to a firm conclusion on what route is better for my friend, as well as in general. I guess the best way to decide is by analyzing the situation and funding possibilities. Regardless, as long as you stick to your mission (and with some luck) either route will enable you to help people through your work.

Link to second article: http://leadershipforgood.com/why-nonprofits-should-fear-social-enterprise/