Sector Agnosticism

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I’ve been hearing it mostly from younger people entering the nonprofit field: You can do good for society in any sector—nonprofit, business, or government.

The lines between the sectors have blurred, I’m reminded, and it’s the IRS that forces incorporated entities into nonprofit and for-profit boxes. The social entrepreneur who starts a profit-making venture to support her charitable work shows us how to free our not-for-profit minds. Blended entities such as B-corporations promise double and even triple bottom lines. If you’re hip to the jive, you avoid using words like nonprofit altogether.

Am I imagining this or do I sometimes detect a bit of a sneer in all this sector agnosticism?

Belittlements aside, the view that nonprofit designation is largely a matter of IRS convention—or worse, a failure of entrepreneurial imagination—appears to be gaining currency.

I understand the frustration some people feel with the normal course of business at many not-for-profits. But our sector agnosticism overlooks an uncomfortable truth: there are important social goods nobody wants to pay for. If it really were possible for a business-minded individual to turn a hefty profit by providing health care to the penniless, for example, it would have happened long ago.

R U a philanthrocapitalist? If you are, I’ll eat my shoe if you can convince a hundred investors to buy stock in a company that promises to make a killing by helping returning prisoners reintegrate into their communities.

The nonprofit status of organizations that provide services to the indigent reflects not a failure of imagination or of will, but rather a sober assessment of what people value enough to pay for freely. If you’re selling a product like the iPhone, you’re in luck. If not, you might need to resort to begging like the rest of us not-for-profit shlumps.

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Image source: Sketchpot

Comments

[Pete Manzo]

Great post, Albert. Now I have a good name to describe this, which has made me uneasy. The notion that nonprofits are only distinguished by their tax status is really wrongheaded. Market forces should be used for good, where they can, but the fact is, with many issues, they can't, otherwise they already would have been.

I'm also waiting for skepticism of markets to increase just a little bit in our sector. It's as if markets had nothing to do with the current economic crisis and the boom-bust cycle we've had for going on 25 years. The stock market didn't reflect real value (nor did direct bargains between "sophisticated" investors, a la AIG and its counterparties, for one example). Unless we have much more resources, and much more openness (regulated and enforced), to put into it, why would we expect a nonprofit "exchange" to do better? Not too politic to mention these days, yet, though.

Great to see you writing again.

[Albert]

Thanks, Pete. There's a lot to be skeptical of. If the ability to persist without subsidy was one of the marks of true entrepreneur, then I imagine few captains of American industry would qualify for the distinction.

[Mitch]

"...I’ll eat my shoe if you can convince a hundred investors to buy stock in a company that promises to make a killing by helping returning prisoners reintegrate into their communities."

Well, if the company had a government contract with the Bush Administration [PDF]...

Salt and pepper on that shoe?

[Barbara Saunders]

Hmmm...what about Delancey Street? No stock, but the nonprofit supports itself through the very same businesses at the heart of the program itself - providing training and jobs to the clients who need reintegration into their communities. No begging.