THE PROFIT IN THE NONPROFIT

Every organization functions with a purpose and a plan. The goal is to earn a profit. However, that profit might look different to different organizations. A for-profit company generates sufficient revenue so that the business remains profitable and that profit pays out to the shareholders and owners.

A nonprofit organization essentially does the same thing. In the nonprofit’s case however, the organization generates sufficient revenue so that after all the operating expenses, bills, overhead, and salaries are paid, enough money is left over to fund the nonprofit’s mission. It is in the accomplishment of that mission that the shareholders, owners, and others reap the rewards.

We could say that “profit” looks different to the for-profit organization versus the nonprofit organization. Anyone involved in a nonprofit organization would definitely take issue with the statement that nonprofit means no profit. A nonprofit organization does generate a “profit” but it is just defined somewhat differently.

The nonprofit world is comprised of consumer-advocacy groups, charitable organizations, social causes, religious institutions, educational groups, medical clinics, and many others. These organizations earn an intangible profit, but it is profit nonetheless. Without these organizations, our world would be a very different place than it is, and it would not be for the better. When society is improved, lives are changed, and sadness is replaced by gladness, we see that “profit.” That is the kind of profit that we cannot afford to lose.