For Profit of Not for Profit?

by katiedelp on

by Bob Lupton How noble is the dedicated servant who is willing to sacrifice substantial income for the sake of a humanitarian (or spiritual) cause!

How tempting it is for such a noble dedicated servant to carefully cloak pride within a façade of humility!

I know.  I have been doing it for years.  In subtle ways I have allowed supporting friends to discover how modest our staff salaries are, that as founder and president I have never been the highest paid employee.  No matter that I am a best-selling author, have a PhD in psychology and could be generating a handsome income.  There is a clear advantage in taking the self-effacing road.  People admire sacrifice and modesty.  No need to call me Dr. Lupton.  Just Bob is fine.  It goes well with the humble image.

Non-profits offer this advantage.  Unless, of course, the CEO is making a generous salary package comparable to the for-profit world.  Then the self-sacrificing advantage is lost.  Investigating journalists then have their heyday and donations take a hit.  Non-profits that wander too close to the for-profit boundaries run the risk of losing their public favor.  Without the perception of sacrifice, non-profits lose much of the power of their appeal.

For-profits trade in none of that sacrificial appeal.  Their staple is carefully calculated risk-reward ratios.  Entrepreneurs gamble their time and money on ideas that they believe will produce profits.  It is what they do.  If their plan is intriguing and their sales pitch convincing, they may be able to talk others into investing with them as well.  And if it works, everyone shares in the proceeds.  If it doesn’t, well, maybe next time.  The entrepreneur’s sacrifice is not viewed as noble.  His persistence may be respected and his nerve may be admired, especially if his venture does well.  But sacrifice in this world has but one justification – making a profit.  The product produced or the service provided may have significant social benefit but without a wealth-generating bottom line, the business ceases to exist.

In a strange sort of way, for-profits are cleaner than non-profits.  For-profits must produce.  Their product must sell, their service must meet a real need, or they will burn through their start-up capital and be out of business.  They cannot long exist on unfulfilled promises or failed expectations.  But non-profits are different.  Their bottom line is evaluated by good accomplished, not money earned.  And good accomplished is much harder to measure than monetary gains.  Non-profit activities may be measurable – number of meals served, number of clients seen, number of garments distributed – but activities are hardly the same as outcomes.   As a matter of fact, many non-profit activities actually do more harm than good.  It is very difficult to gauge when a soup kitchen meal is a survival safety net or dependency deepening subsidy.  Thus, non-profits’ stock and trade are meaningless numbers, questionable outcomes and heart-warming stories.   You see why I say for-profits are cleaner than non-profits?

So why do we give such lopsided deference to the sacrificial social service sector when in fact it is the business sector that creates the economy upon which all social well-being depends?   Why do we celebrate our short-term missionaries but seldom recognize the business people who underwrite their trips?  As a matter of fact, it’s the business folk who create the wealth that underwrites almost everything worthwhile in our society.  Why then do we so seldom celebrate them?

For-profits and not-for-profits represent two fundamental divisions of our economy: wealth creation and wealth transfer.  Business is the wealth creator; all others exist on the transfer of that wealth.  The wealth generated by business creates employment, spawns peripheral economies, funds government and the public sector, underwrites the religious, cultural, health, educational, philanthropic and entertainment sectors.  Without a flourishing, wealth-creating business environment, strip malls turn vacant, potholes go unrepaired, property values decline, symphonies cut their performances, churches reduce their staffs, mission trips are scaled back.  How strange that business creators, so essential to our well-being, are so often viewed as somehow less spiritual, less compassionate than those who live off the wealth they produce!  Strange, too, how we esteem sacrificial non-profit “servants” but malign as greedy capitalists the for-profit producers who underwrite their charities.

Perhaps it is time to revisit our wealth-averse theologies and re-introduce a righteous respect for the God-ordained capacity for wealth creation.  So fearful we have become of the dangers of mammon that we have forgotten that a flourishing economy is a reflection of God’s common grace.  Perhaps it is time to re-tool our seminary curricula, to retrain our priests and pastors to include in their lists of saintly attributes the spiritual gift of wealth-creation.  Even better, introduce into their non-profit academic world some wealth-producing faculty members who understand the ordained, essential role of business creation.

At the very least, let’s admit to ourselves that non-profits alone will never move a community out of poverty.  If done well, they can improve the quality of life – healthcare, education, religious life, etc. – but they do not ultimately enable a people to thrive.  Only for-profit businesses produce the wealth that does that.  If the poverty needle is to move in a positive direction, that mission ultimately lies with the wealth-creators.

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