The Corporate versus Nonprofit Debate

Disclosure: I have never really worked in the corporate world. My current position–where I consult to and manage nonprofit organizations–is actually the first time in my life I've worked for a for-profit corporation (that wasn't my own company). Basically, I've been in the nonprofit world my whole career.

But I must have missed some of the kool-aid, because I seem to be on the opposite side of the fence when it comes to the perennial conversations about "us versus them." You know this conversation. It's the one about the good and caring nonprofit associations trying to advance America, versus the heartless money grubbing, profit-focused Gordon Gekkos of for-profit corporations.

Okay, I'm overstating it a bit, but not much. And I have just never bought it. I get that corporate cultures are different than nonprofit cultures, but I have always thought nonprofits are businesses, and I have always thought that corporations are run by people who, as humans, care and have passion and want to make a difference. The two communities are different, but not as different as we make them out to be. 

Some of these ideas came out in a thoughtful blog post by Association Executive and fellow blogger Eric Lanke on the Hourglass blog. Eric was responding to Umair Haque's post on HBR about being "disruptively" good in business. In short, Haque argues that business will do better by attending to making the world a better place in addition to having a healthy bottom line. It's not an entirely new argument–Dan Pink makes similar points in A Whole New Mind. Part of Eric's response sounded a bit of an alarm bell for associations about this:

We run the risk of having the business sector co-opt the missions of many associations and non-profits, making us even less relevant and even less capable of affecting the change we seek. What good will associations be if the finanical and resource muscle of the for-profit sector gets solidly behind transformative social movements instead of just selling "unhealthy sugar water"? And who are the talented young people of the future going to want to work for? The ineffective association that pays 50 cents on the dollar compared to the socially conscious and highly effective corporation? How can associations win a talent war with those kind of battle lines?

Later in the post Eric also talks about the opportunity here, rather than just the threat (and I think the opportunity was really the emphasis of Eric's post, rather than the threat). But I want to point out something about this "threat," because I think it reflects some fairly widely held beliefs and it highlights the false dichotomy between business and nonprofit that I was alluding to above. The way I see it, the threat could be framed like this: 

We have a problem because organizations with billions and billions of dollars in resources are now going to focus on our mission, and we can't compete.

Wait. Wouldn't that be a good thing if billions of dollars were now being focused on our mission? For all our talk about mission and doing good, why are we so suddenly focused on our bottom line and organizational existence as soon as corporations enter the picture? Why does it matter if we, the association, exists? What is the "problem" with billions of dollars now going towards the mission but in the process the American Association of Doing Good Professionals is not in the yellow pages any more?

Don't get me wrong–I'm not advocating for the end of associations. I think there are legitimate answers to those rhetorical questions I just asked. But when asking the question, "why does it matter that associations exist," I am desperately hoping that you don't answer with "because we have a nonprofit tax status." Is that the best we can come up with? We're nonprofits, so we're the good guys, so we have to be at the table?

Neither nonprofits nor corporations are entitled to exist. So forget your tax status for a minute, and forget any preconceived notions that you have about the corporate world. If billions of dollars in resources suddenly moved to your mission, why would your organization need to be a part of the picture? Because your community is so strong that you can get things done quickly and wisely at the same time? Because the world trusts what comes out of collaborations under your umbrella since you carefully engaged diverse stakeholders? Because you add tremendous value to the community?

Notice that I didn't say because you have a really good annual meeting, or because your magazine is awesome, or because your listserve is very active, or even because you have the top expertise or knowledge in the field. It's not about the things you do or have, it's about the value you help create. I think, in general, we are not clear enough about the value piece. It's fuzzy by definition I suppose, but we still need to do a better job. And honestly, it shouldn't take the threat of a corporate takeover to get us thinking about it. Regardless of competition or tax status, how can we be more valuable? How can we raise that bar? If we find ways where our tax status gives us a leg up in creating incredible value, then more power to us. But the focus should be on a new standard of value creation, not our existence or our tax status.


  1. 13.05.2010 at 10:10 am

    You’re right, Jamie. I was trying to emphasize the opportunity rather than the risk in my post on Hourglass–something you’ve done eloquently.
    Part of my interest in this “debate” is spurred by my own experiences living on the edge of the forprofit/nonprofit divide for my whole career. I spent 13 years with an association management company, where the synergies and tensions between the nonprofit missions of the clients and the forprofit culture of the AMC were played out on a daily basis, and now I’m the exec of a nonprofit trade association, creating synergies (and sometimes stumbling into tensions) with the forprofit objectives of its member companies.
    I’m wondering if the biggest opportunity for change in the whole debate is growing alignment between the forprofit interests of companies and the nonprofit missions of the associations they belong to. If so, I think that’s a win for everyone and not something to fear.

  2. Barbara Saunders
    13.05.2010 at 11:20 pm

    I think this question is a critical one as the models for all organizations and all work shifts.
    Leave aside huge corporations and very large established nonprofits and it seems to me that much of the small nonprofit and small business worlds are merging.
    As an individual, the internet is just one tool that enables me to make a larger contribution as a private citizen than I can at an inefficient nonprofit organization. And if I play it right, I can gain enough control of my career to arrange my work and business such that I spend more time on causes I care about and less working in the confines of a rigidly scheduled “day job.”

  3. 28.05.2010 at 10:40 pm

    Couldn’t agree with you more. The “divide” between for-profit and non-profit is non existent or irrelevant to all the basic management issues: the management of organizations and relationships; getting, engaging and retaining customers; and remaining competitive and profitable.
    When I used to actually have a real job inside non profit organizations, the distinction between the two was a code; a ritualized behavior, so to speak. You had to talk as if you inhabited a far nobler world than the unenlightened masses and you valued “mission” over profit, but you really valued and were driven by the quest for resources over nobility. Pretending that they have no customers (just members) and not rewarding outcomes is holding non profits back.
    I have also come to suspect (and avoid) the word “mission.” “We will only change or act etc. if it is within our mission.” Where are the clients in all this? Is “mission” a code for putting an association’s benefit and interest over those of its customers? Just wondering why such passionate advocacy of mission vs. being constantly engaged with their members and adapting mission and business model to the needs of members at particular points in time.

  4. 07.06.2010 at 7:08 am

    I agree. If the mission of your non-profit is served better by others then be happy your mission is being accomplished and move on. Now in reality I can’t believe this will actually happen often. Even in the very rare case where this is initially true (in some sense) I can’t imagine just modifying your organizations role a bit would add value along the lines of your mission.
    But if it required a more fundamental rethinking of what your organization did, that isn’t so bad. Figure out where the organization can add value given this new good news and get to it.
    But if you can’t provide any value then fine, be happy the mission is being served so well and move on. But I really can’t believe this would be the case for nearly any organization.

  5. 10.03.2014 at 5:30 pm

    I’ve worked for both. Both are human populated and human organized and human led. that means both are full of the pathologies and top notch performance the characterizes humans. the problem is the dominance of social conventions. Wherever you have a group of people who won’t stand up to narcissists or bullies, everything goes to rubbish. And wherever you have a group of people who have integrity and can turn away from coercion through resources, you can actually get something done. 1 or 2 rotten apples can indeed ruin the barrel. The courage to say what needs saying and the ability to walk away from pathology and infantile emotional extortion is the key to creating a world that is inhospitable to those who enjoy exploiting and hurting others to benefit themselves. Narcissists and bullies can hide out just as effectively in a non-profit as they can in a competitive company. the question is do you, personally, give such people safe harbor and the cover of silence? If so, you ARE the problem. There are fewer bad people than good. but if good people are weak, then that’s all bad people need.