Not-for-profit social enterprises

It’s not always about money.

A lot of the time it’s about money, but sometimes it’s not.
Quote of the day:
“Think of giving not as a duty but as a privilege.”
—John D. Rockefeller, Really big deal (American philanthropist,
business owner, all-around good guy)
Learning Consider the main features of the following types of
Goal not-for-profit social enterprises
- Non-governmental organizations (NGOs)
○ Operational NGOs
○ Advocacy-based NGOs
- Charities

Success - Distinguish between NGOs and Charities

Criteria - Consider/discuss: Why do we have these different
types of enterprises anyway? Who benefits?
 1. What are social objectives?
Recall from 2. What are a couple of examples
of social objectives?
last class 3. Can a for-profit organization
have social objectives?
 Organizations where profit is not the
main goal.

Businesses use surplus revenue*

Non-governmental (money left over after paying for costs)
Organizations as profits/dividends.
(NGOs)
NPOs use surplus revenue to achieve
social goals.

*Surplus = Total Revenue - Total Costs

Examples

- Public schools
- Museums
- Hospitals
- Social services

- Good idea or bad idea?

- Who are the goals of
each service?
Exam tip:
...but don’t non-profit businesses make money?

Non-profit = does not mean

business can’t make profit

But: NGOs use profit for

growth and to stay alive*
*Profits are not distributed the way they
would be in a for-profit business
NGO example case: Bill & Melinda Gates Foundation

Mandate (goal): To
enhance healthcare and
reduce extreme poverty
around the world.

Private Foundation:
Does not solicit money
from public.
Bill & Melinda Gates Foundation: Who’s in control?*

Bill Gates Melinda Gates Warren Buffett

As a charity: The Gates family donated $28 Billion USD between 1997 and 2013.
- Who (potentially) benefits from this?
- Organization owners?
- People receiving support?
- Governments?

*Not the government, that’s for sure! (because the organization is non-governmental.)
Two types of - Non-profit social enterprise
non-governmental - Operates in the private sector
organizations - Not owned or controlled by the
(NGOs) government
- Profit is not the main goal

Two kinds of NGOs (see above):

- Operational
- Advocacy-based
Types of NGOs

Operational NGOs Advocacy NGOs

Started to fulfill a practical Promote or defend causes by
objective/purpose. raising awareness.

Examples: Examples:
- Medical aid - World Wildlife Foundation
- Famine relief - Sierra Club International
- Food aid - WE Charity (Free the Children)
- Disaster assistance - UNICEF
Example: Greenpeace, an advocacy-based NGO
Example: Greenpeace protests at a Shell refinery
 - Not-for-profit social enterprise
- Provides voluntary support for good causes
(from society’s point of view)
- Examples:
- Protection of children
Charities - Animals
- Natural environment

Key function:
- Raise money from individuals/organizations
- Support a cause that helps society
Charities
- May not actually sell What are three notable charities?

anything
- Use refined marketing
strategies get attention of
potential donors
- Celebrity endorsements
are a thing!
Charities - (dis)advantages
1. Social benefits 1. Bureaucracy
2. Tax exemption for NPOs (non- 2. Disincentive effect
profit organizations) 3. Charity fraud
3. Tax incentives for donors 4. Inefficiencies
4. Limited Liability 5. Limited sources of finance
5. Public recognition = “more”
trustworthy
For tonight...

Before you go:

- For CAS: What are three organizations you’d volunteer at?
- Have you ever donated to charity? Why or why not?

Read For submission/homework check:

1. Can we “know” if for-profit
organizations care about society as
much as non-profit social enterprises?
2. Finish handout 1.2: Focus on relevant
questions/definitions from each class
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