Oh, You Want to be a Profiteer *and* a Savior?

Facilitated by Arthur Coddington, Craigslist Foundation

Session Description

When for-profit enterprises see social sector uses for their products, what needs to happen for them to embrace the good while still making payroll and keeping their investors smiling? Arthur will facilitate a discussion that centers on striking this essential balance.

Session Notes

- how can businesses do more social stuff, and how can non-profits work like a sustainable business?

- many non-profits put their mission before the money, and go out of business

- many businesses put money before their culture and principles

- 501(c)(3)'s can earn money, so long has it has to do with their mission, and not pay taxes on it

- non-profits can get unrelated business income, but then you have to pay taxes on it

- non-profits can own for profit companies, which may simplify tax reporting

- "non-profit is a tax status, and not a complete constraint on how you manage things"

- there is also cultural implications of what a non-profit is, which may be outdated

- not all non-profits are charities, doing exclusively direct service

- some people think that being a savior or a profiteer is a black and white decision

- there are many orgs like Mozilla and Wordpress that are foundations that own business

- some orgs lend out money, and then reinvest in different people when it is paid back

- some companies want to treat their employees

- there are many organizations that get too big and stop responding and take risks

- some foundations like the Cystic Fibrosis Foundation directly invest in startups and recoup profits when drugs are sold

- it varies person to person about whether they want to work for a nonprofit or doing charity/activism in their spare time

- Different countries call them different things such as NGO, or general benefit organization, social sector

- "B Corporation" is a new non-government certification process

- Publicly traded companies have a mandate on short-term performance, unless it is clearly written into bylaws

- Business writeoffs are the cost of goods, which is virtually nothing for software

- many non-profits often only subsist on grants and donations, and ignore other options to provide services or do investments

- think more strategically about your options for sustainability

- foundation funding is unreliable, and private donations are effected by economic weather

- think about how you can provide value to the foundations that are funding you

- think about how you can make your projects revenue neutral

- if doing a grant, get the final report form up front so you know what the actual expectations are

- use general language when doing grants so you aren't tied into technologies you might not end up using

Summary

- some people think savior or profiteer is a black and white distinction, but it is really a gray area

- some organizations are a charity, but many causes shouldn't be run like that

- different types of organizations, both for and non-profit

- "your tax status doesn't automatically make you a savior"

- many non-profits often only use grants and donations, and ignore other options to be sustainable provide services or do investments

- Mike got in a bar fight last night about whether nonprofits could act like businesses, which he has now won be default since his opponent didn't show up here to defend herself