From the perspective of a non-profit organization, for-profit corporations are often viewed as very dog eat dog: they’re seen as extremely competitive, with a drive entirely derived from the continuous pursuit of financial gain, often at any cost. While this may be true in a lot of for-profit models, when this less-than-subtle shaming viewpoint comes from a non-profit perspective, it’s actually rather hypocritically flawed. A Bigger Piece of the (Bigger) Pie The idea of cutthroat capitalism takes us back to the very origins of the system itself: the underlying principle is based on scarcity. So the idea is that there’s only so much money/goods/people out there, so individuals and companies are financially driven to secure as big a piece of that pie as possible. On a very basic level, this appeals to and exemplifies the selfish side of our human nature.
Enter the cooperation model. The idea: by working together, we can increase the size of that pie, so, even if I get a smaller piece, I still get more. In other words, I still win, but now there’s more opportunity for others to also get more. It’s an economic model that breeds development and creation, while still complying with capitalism, because it’s still based on market demand – proving especially practical in today’s global economy.
For-Profit Cooperation at Work A recent example of applied cooperative capitalism came out of the healthcare industry, in endovascular medicine. This beneficial field allows doctors to much more effectively view and correct life-threatening conditions caused by blocked veins and arteries, resulting in numerous long-term benefits for patients. Just a few years ago, this emerging field had a worldwide market value of around $2 billion. Interestingly, instead of fighting over their share of the $2 billion, several multi-billion-dollar companies converged on the topic to increase the size of the pie. By pooling together to educate and train doctors, while promoting patient and public awareness, in a few years the size of the market increased to over $10 billion.
Non-Profits: Scarcity Players Under the current system, austerity results in reduced government funding for social service programs required to improve the lives of society’s less fortunate. The onus shifts toward the public: non-profits need private funding sources to maintain these programs.
So non-profits approach a finite list of foundations for a finite amount of money – welcome to the shark pool.
As it stands, dedicated non-profit professionals are out there working very hard for the greater good of a disadvantaged community - and the only way they can continue their work is to hire better and more aggressive funding developers. The result? The creation of organizations whose sole purpose is to raise money – it’s all they do.
Consider the $2 billion pool previously mentioned. Under this current model, non-profits in a particular sector will fight it out for the $2 billion, instead of working together to increase the amount of money available. The arts is a particularly competitive arena, seeing as arts programs are seen as extraneous, so they’re often the first to see government cuts. Arts funding groups are so competitive that they’re often willing to completely change their objectives just to get the money they need, in the hopes of returning to their original mission after bolstering their financial base. Unfortunate circumstances, no doubt.
The big problem: if non-profit funding is only based on charity, it’s extremely difficult to increase the amount of money available. Plus, with more hands in the pot, that funding pool will continue to shrink.
Bridging the Gap: Social Enterprise Side-by-side, the for-profit and the non-profit sectors don’t have to look that different. A for-profit company with reasonable profit margins, strong bylaws that adhere to shareholder and stakeholder values, community interest and return, noticeable transparency, and low environmental impact – that’s social enterprise.
Social enterprise can and will create new markets and increase total market size, with a focus broader than their own market share. This will increase opportunities for any non-profit in the same field. In turn, if these non-profits band together to lend a collective voice to education and awareness, it will ultimately encourage people to contribute money, increasing the size of the pool, while lessening the effort required to compete in (what will hopefully formerly function as) the shark pool.