Our Two Cents on Should Nonprofits Seek Profits?
March 6th, 2005
The only discussion title more sensational then Should Nonprofits Seek Profits? would be Should Nonprofits Have Sex? The dogged fascination many folks have with the ‘P’-word is motivated by the same fascination we have with other taboo topics. It’s that ever-vigilant-though-we-deny-it Protestant Ethic creeping is as a guilt-driven constraint to shape how we think about and behave in the social sector.
Our obsession with profit/non-profit concerns reinforces a shared belief that private sector business is a Red Light District of sin and depravity, and that we must keep our ‘kinder, gentler selves’ from straying too close to the flame. Unless we’re establishing a mission to reform the fallen among us, what purpose does a saint have hanging around on the wrong side of town?
It is no accident that Jim Fruchterman has such a strong and experienced voice in this discussion. More than most, Jim’s work through Benetech weaves an ecosystem-like network of activity bringing private, public/social, governmental, and emerging hybrid organizations together to tackle significant social problems. Jim is fortunate and skilled enough to be doing his good works in a big way.
But what about the rest of us? Creating and sustaining a Benetech is not in the realm of possibility for most of us. Most of us, in other words, inhabit the Small Is Good World where our lives as individuals determine our contribution to society. Michael Herman raised this issue in his heartfelt post when he asked (our emphasis added):
“what does social enterprise look like at the level of the ‘little individual’? i am a for-profit person endeavoring to do work that could be 501c3′d into an organizational form, but that would take lots of attention and energy away from the work i actually want to do… how can for-profit people do non-profit service-type work as individuals and still generate enough funds to live on? does everything have to be an organization to succeed?”
Jim Fruchterman’s social business ecosystem is organization-centric. At Sohodojo, we’d say Jim works largely (though not exclusively) in the Big Is Good World. Being organization-centric is not inherently a good or a bad thing. It is just a feature of the scale at which Jim works.
But what about Michael’s ‘little individual’? What do social business ecosystems look like when the nodes of the network are individuals rather than organizations? How do collaborative networks of solo social entrepreneurs form, manage, and most critically, fund themselves? In other words, how will things work in the Small Is Good World?
We are only beginning to understand and ask these important questions. The answers to these questions are a work in process that is most visible in places like the Omidyar Network and Skoll’s Social Edge on-line communities for social entrepreneurs.
A major challenge for the social investment community is to learn to add a new perspective and skill set to its approach to philanthropy. Metaphorically speaking, the current philanthropic community is primarily skilled and comfortable in the art of “investing in the film industry.” However, the social investment community is relatively unaware of and unskilled at playing the executive producer role of funding the social sector’s activity of “making movies.”
Just as the Hollywood film industry went through “network-ization” in the mid-20th century, the social sector is going through it at the dawn of the 21st century.
Modern information and communication technologies empower individuals to aspire to be effective solo social entrepreneurs. The dynamic projects we want to create and participate in are the “movies” of the social sector. We don’t want to have to be an employee of a film industry organization in order to make movies. As we move into the realm of the individual in the Small Is Good World, the profit/nonprofit issue becomes more of an accounting decision rather than a value-laden litmus test of social good or evil.
When we figure out how to nurture social business ecosystems as a vital part of the Small Is Good World, we will have come a long way toward addressing Michael Herman’s desire to be an effective ‘little individual’ helping to lengthen the flight of Spaceship Earth.
For more on the Small Is Good World, social business ecosystems, and the challenges facing the social investment community, we encourage you to visit the archive of our Social Edge posts at Sohodojo.
–Sohodojo Timlynn and Jim–
Entry Filed under: Various Other
Our Two Cents on Should Nonprofits Seek Profits?
March 6th, 2005
The only discussion title more sensational then Should Nonprofits Seek Profits? would be Should Nonprofits Have Sex? The dogged fascination many folks have with the ‘P’-word is motivated by the same fascination we have with other taboo topics. It’s that ever-vigilant-though-we-deny-it Protestant Ethic creeping is as a guilt-driven constraint to shape how we think about and behave in the social sector.
Our obsession with profit/non-profit concerns reinforces a shared belief that private sector business is a Red Light District of sin and depravity, and that we must keep our ‘kinder, gentler selves’ from straying too close to the flame. Unless we’re establishing a mission to reform the fallen among us, what purpose does a saint have hanging around on the wrong side of town?
It is no accident that Jim Fruchterman has such a strong and experienced voice in this discussion. More than most, Jim’s work through Benetech weaves an ecosystem-like network of activity bringing private, public/social, governmental, and emerging hybrid organizations together to tackle significant social problems. Jim is fortunate and skilled enough to be doing his good works in a big way.
But what about the rest of us? Creating and sustaining a Benetech is not in the realm of possibility for most of us. Most of us, in other words, inhabit the Small Is Good World where our lives as individuals determine our contribution to society. Michael Herman raised this issue in his heartfelt post when he asked (our emphasis added):
“what does social enterprise look like at the level of the ‘little individual’? i am a for-profit person endeavoring to do work that could be 501c3′d into an organizational form, but that would take lots of attention and energy away from the work i actually want to do… how can for-profit people do non-profit service-type work as individuals and still generate enough funds to live on? does everything have to be an organization to succeed?”
Jim Fruchterman’s social business ecosystem is organization-centric. At Sohodojo, we’d say Jim works largely (though not exclusively) in the Big Is Good World. Being organization-centric is not inherently a good or a bad thing. It is just a feature of the scale at which Jim works.
But what about Michael’s ‘little individual’? What do social business ecosystems look like when the nodes of the network are individuals rather than organizations? How do collaborative networks of solo social entrepreneurs form, manage, and most critically, fund themselves? In other words, how will things work in the Small Is Good World?
We are only beginning to understand and ask these important questions. The answers to these questions are a work in process that is most visible in places like the Omidyar Network and Skoll’s Social Edge on-line communities for social entrepreneurs.
A major challenge for the social investment community is to learn to add a new perspective and skill set to its approach to philanthropy. Metaphorically speaking, the current philanthropic community is primarily skilled and comfortable in the art of “investing in the film industry.” However, the social investment community is relatively unaware of and unskilled at playing the executive producer role of funding the social sector’s activity of “making movies.”
Just as the Hollywood film industry went through “network-ization” in the mid-20th century, the social sector is going through it at the dawn of the 21st century.
Modern information and communication technologies empower individuals to aspire to be effective solo social entrepreneurs. The dynamic projects we want to create and participate in are the “movies” of the social sector. We don’t want to have to be an employee of a film industry organization in order to make movies. As we move into the realm of the individual in the Small Is Good World, the profit/nonprofit issue becomes more of an accounting decision rather than a value-laden litmus test of social good or evil.
When we figure out how to nurture social business ecosystems as a vital part of the Small Is Good World, we will have come a long way toward addressing Michael Herman’s desire to be an effective ‘little individual’ helping to lengthen the flight of Spaceship Earth.
For more on the Small Is Good World, social business ecosystems, and the challenges facing the social investment community, we encourage you to visit the archive of our Social Edge posts at Sohodojo.
–Sohodojo Timlynn and Jim–
Entry Filed under: Various Other
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