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June 09, 2007

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Holden

"Nonprofits can be businesslike in pursuing their ends; the end in view is not profit."

That is exactly what the people on the "some nonprofits just suck" side are saying. Anyone who thinks that a nonprofit must turn a profit to be "sustainable" or "businesslike" is fundamentally misunderstanding a heck of a lot. I don't think anyone involved in any of these discussions actually thinks that.

Nonprofits are analogous to businesses in some ways, and opposite in others. I don't think anyone is extreme enough to dispute that. "Some nonprofits just suck" means some nonprofits are bad at what they do, i.e., bad at helping people.

Phil

Thanks, Holden, I admit to swinging at a strawman.

Jeremy Gregg

All things are business, regardless of their individual profit-and-loss statements. What is of chief concern is genuine contribution, which cannot be evaluated purely on an economic basis.

Some companies have great economic performance but create an overall negative contribution to the world: is this success?

Similarly, many companies make significant and positive contributions to the world, but run in deficits: is this failure?

"Non-profit" is a tax status, not a style of business.

The fact that some strong charitable institutions have a difficult time securing funding for their operations is not a commentary on their capacity for excellence, per se, as much as it is a commentary on the flaws within our economic system.

Phil

Generosity and self-seeking don't map exactly to nonprofit and forprofit, any more than do public goods and private goods. But at the core of it is the distinction between what we do for love and what we do for money.

Michael Maranda

Let's differentiate the manner in which some NPOs suck, and how this is perceived.

Some NPOs are very effective at what they do, and some of them aren't very noble in their endeavor. Understanding the ecology of interests at play is key here. Think astro-turf.

But let's get a little more subtle. There are some entities that are merely well positioned, well known and well-funded. We sometimes refer to them as the "usual suspects" ... other entities in the same ecosystem don't get the oxygen they need to grow.

There is an interesting phenomenon... in many cases NPOs are encouraged to scan the field (for other efforts, before undertaking a new effort) ... there is an idea that we should not reinvent the wheel whenever possible... so as not to dilute scarce resources... so as to maximize effectiveness, etc.

How do we balance the call for non-duplication of services/efforts with the blunt observation that existing NPOs are unlikely to be meeting the need in their sector, and perhaps the idea that competition among these entities would lead to improved performance or outcomes?

Phil

Competition between nonprofits in a given sector, or better alignment, coordination, partnership? More concerted action in the light of a shared map of the issue?

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