Blame it on Sir Isaac Newton

I’ve worked in a lot of different industries and companies throughout my career. Many of these were for-profit companies, but the majority of my professional experience comes from the not-for-profit sector. And in seeing the view from both sides of the fence, I’ve found more similarities between these two sectors than I think most people realize.

Life leads us to believe that every positive needs to be balanced by a negative (well if not life, then Sir Isaac Newton). But when we apply that logic to the concept of not-for-profit balancing for-profit, we are not only oversimplifying, but also really selling BOTH sectors short.

To believe that “for-profit” companies should be solely focused on profit is as gross of an injustice as believing that “not-for-profit” companies shouldn’t care about being profitable (i.e. sustainable).

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It boggles my mind that we are OK with some pretty terrible companies literally printing money, while we hamstring some of the most important organizations in our country, working to solve some of our society’s most pressing problems, with the expectation or worse yet, a mandate, to not make money.

You’ve probably seen the not-for-profit CEO salaries meme that floats around the internet bashing large not-for-profit organizations for wasting money on high-paid CEO's. Aside from the incredible factual errors to that meme, the message it’s trying to send is dangerous. If you are sitting while reading this post, your smart phone has probably told you it’s time to stand, so I’ll skip ahead a bit and recommend you watch this (Dan Pallotta – The way we think about charity is dead wrong) to better understand where my head is at.

I think the problems with how we approach charitable organizations stems from the sectors' names “not-for-profit” and “for-profit.” While there is certainly accuracy from a shareholder’s perspective, it sets an unrealistic and dangerous expectation on charitable organizations to shy away from money.

The mandated difference between the sectors is whether their board of directors or shareholders get paid. That’s it. Not the size of their bank accounts, endowments, or the cost of the service they provide. Not employee salaries, benefits, or dress code.

The way I see it, the ONLY difference is their goal. Is it profit for the shareholders, or is it impact in the community?

What if we instead called them “for-profit” and “for-mission.” This more positively describes  the goals of these organizations, rather than their obstacles. (And I think even Sir Newton would agree that’s a good idea.)

So, what about those problematic “for-profit” companies who prioritize community impact over profit? Honestly, that’s not a problem at all, in fact, that’s exactly what I’ve grown to love about our team here at Thread.

We recently rolled out new corporate values that put PURPOSE above profit. If you can’t get behind organizations that believe helping others is more important than helping ourselves, then we might never see eye to eye.

If organizations are working to solve childhood hunger, like Wendi Huntley at Connecting Kids to Meals, working to find homes for our nation’s heroes, like Ken Leslie and his 1Matters organization, or any number of noble causes (homelessness, drug addiction, mental illness, education, etc.) we should WANT them to make money. We should want and perhaps expect to see MILLIONS of dollars in their bank accounts. This will give them the ability to think big, act big and solve even bigger.

I also want to give a kudos to some of the incredible for-profit companies that understand there’s more to life than money. Danberry Realty (@danberry.realtors) has one of the coolest fundraisers with their annual Treasure Chest Charity Auction Dinner and to date, have raised over $1 million and supported more than 1,000 families. Living in Dallas, TX for a few years, I heard countless stories of Southwest Airlines (@SouthwestAir) putting people first – their employees, their customers, and their community, all ahead of their shareholders. They’ve even published purpose and values statements in addition to their traditional vision and mission.

You won’t hear me bash profitable companies, or raise up on an unnecessary pedestal every not-for-profit (excuse me, for-mission) organization in the country. I do, however, want to challenge the way we think about the organizations with which we regularly interact, and challenge us to expect more from ourselves and everybody around us when it comes to making our world better.

So, where do we go from here? First, if you work for or with a “for-mission” organization that needs help improving their fundraising, marketing, communications or brand, give me a call. Secondly, the next time you hear somebody criticize a “for-mission” company for making a profit, challenge them to see that profit may not be a bad thing, after all – or just point me in their direction…

Topics: nonprofits, Business Development, Thought Leadership, not-for-profit, for-profit, for-mission

Kevin Mullan

Written by Kevin Mullan