Business versus not for profit. This article will review the concepts of business and Not-For-Profit organisations, particularly in relation to poverty.
‘Not for profit’ is the opposite of ‘for profit’. A business by its’ very nature is ‘for profit’ as it needs to be sustainable in the long term to provide jobs for others and to continue to provide the products and/or services to their clients. To most this is obvious, however have you thought about the implications.
Income minus expenses can equal:
- positive (profit = money to pay bills, give away, spend, and invest for the future),
- negative (loss over time which may lead to bankruptcy, even prison) or
- break even (no money available for investment for the future, to pay for unexpected contingencies, or to spend on anything, and none available to help others)
So Not-For-Profit (NFP) organisations seem to have the structure of not having any money left over to use as described above. I would suggest that for any person, organisation, city, region or country to have anything other than a goal of having excess in the budget is perpetuating the cycle of poverty, enabling a welfare mentality and is irresponsible. NFP’s mostly rely on external funding, often resorting to begging to keep the doors open, even for extremely worthwhile causes. Please note this article is not criticising the work of NFP’s which is mostly very noble, but highlighting a problem with the system (and offering a solution in the next article).
The purpose of grant moneys available to assist NFP groups is often to help them become sustainable in the long term. By its very nature, a NFP organisation needs to acquit the grant funds within the time frame of the grant or it loses the remaining money, which has to be returned to the funding institution, and most likely will affect the NFP organisations’ ability to gain that same amount of funds or more in the future as it was not shown to be a good steward with those funds within that timeframe in the past.
So, is ‘for profit’ business the answer? At times, many in the business sector have been deserving of the bad reputation it maintains in some circles, due to greed in both good times and bad. Particularly in Australia, I would suggest the opposite, a poverty mentality has led to many more business men and women having failed at business as they went into the venture with unrealistic expectations or that their inner belief did not match their outer actions. One such belief or lie is that money is the root of all evil. In fact, it is written ‘the love of money is the root of all kinds of evil’. If someone is running a business, and their conscious and/or unconscious belief that to make money is dirty or not noble, that discrepancy may lead to self-sabotage, usually unconsciously. Other times a budding entrepreneur may have started a business as he/she wanted to be his/her own boss or independent, not realising that in business, the varied skillset that makes up communication is vital to succeed. If your customers, staff and shareholders are unhappy, trouble ensues. No-one is an island. Those who succeed in business have learned the secret of interdependence.
The truth is that money itself is just a tool. In the hands of a generous person it is a blessing for many. In the hands of a stingy person it becomes a prison as they fear spending or losing the money. The lack of money, poverty, also creates a prison. Anyone who has gone through extended times of severe financial hardship will relate.
Poverty seems to some idealists to be perceived as a noble cause to aspire to. However, those same people are often the ones that are forced to go begging to those with money to pay bills which may be to keep a car on the road, a roof over head or pay for medical treatment. Poverty implies you are not able to look after yourself, your loved ones or reach out to help others. This is not noble. Poverty involves having extremely few or no choices, limited ability to love in action even by providing the basics to loved ones, barely any hope for the future as there always seems to be more bills to pay to get out of debt. Poverty is not peaceful, the strain leads to severe physical, mental and emotional stress, breakdown in families and society.
Both poverty and greed are part of the problem.
Stay tuned for Part 2 where I reveal a new strategy for cities and their people to thrive.