I realized a while ago that in my whole career I’ve never worked for a for-profit corporation.
Recently I’ve been wondering if non-profit corporations could succeed in areas typically dominated by for-profit corporations. I’m in the U.S.
There are certainly plenty of non-profits functioning, employing people, and providing services to the public. Schools, Hospitals, public radio & TV, etc. But what areas are there where non-profits could exist and survive where they don’t currently?
What are the unique qualities of Non-Profit Corporations? In the US, not only do they get favorable tax status, but they can also accept donations, which entite the givers to their own potential tax benefits. But, the government has an interest in making sure these non-profits actually do have a charitable intent, and are not just some scam to make something off of other people.
So, perhaps you are asking which other endeavors can benefit from this? Because it is possible that, in some cases the overhead of having to prove you are operating as a charity might get away from the mission of whatever you are trying to do, no matter how paradoxical that sounds.
Case in point: the Raspberry Pi foundation. It started out life as a UK charitable foundation which aimed to make low cost computing accessible to everyone. But after making their boards, they came to the conclusion that making computer hardware was difficult to do as part of a non-profit, so they split into two organizations. I wonder whether various hardware vendors had issues contracting with or signing NDAs with a non-profit company, or whether their tax exempt status was causing problems when contracting with for-profit vendors.
The non-profit still does advocacy and charitable work, but there is now a for-profit company which designs and manufactures the Raspberry Pi boards, and in fact went public in the UK a few years ago. The Raspberry Pi Foundation owns almost half of the for-profit company, but still retains its non-profit status.
Well, that’s it. My focus wasn’t primarily on the tax status or ability to accept donations. I was thinking more about disconnecting from the profit motive and wondering about what sorts of things a non-profit could do that they might not be doing now.
The Raspberry Pi Foundation’s experience trying to manufacturer computer hardware as a non-profit is also what I’m thinking of. It seems obvious that some industries would be difficult or impossible for a non-profit to break into.
I will say that my employer has no problems with contacts or NDAs as far as I’m aware, although our legal department can be challenging to work with. Most for-profit vendors can deal with a tax-exempt customer fairly easily. You just have to make sure they get the correct forms.
Not all non-profits are charities, sometimes they are industry groups, whose charter is to improve cooperation between companies in a common industry who would otherwise by competitors, and not to itself compete with any of them. (Yours might be, if your username is any clue).
In this case, it’s a bit different, because while the organization doesn’t seem to make a profit, it’s members do, and they may provide most of the group’s funding.