Think ‘for impact,’ not nonprofit
As a person who has spent much of his career working in the nonprofit sector, I’m consistently asked one question: “How can I help?” It’s an understandable question and one I appreciate; it means that people want to help respond to the issues they care most about and make a positive impact on the community we call home.
But there’s a problem. And it starts within the industry itself and our history of identifying ourselves as “nonprofits.”
The word suggests that such organizations don’t add value and are not required to be profitable. This couldn’t be further from the truth. It is true that our business model wasn’t designed to produce a surplus that would be annually distributed to shareholders. However, the organizations that are playing a role in supporting the communities they serve are not only generating a bottom line that’s capable of meeting financial obligations and weathering economic instability, but also developing innovative sources of funding that generate the resources to achieve the greatest possible impact.
Doug Stewart, the CEO at the Max M. and Marjorie S. Fisher Foundation, has long argued that we do ourselves a disservice by identifying as nonprofit organizations. He proposes instead that it’s time to position institutions making significant contributions for what they truly are — “for impact” corporations (FIC). I couldn’t agree more.
In Detroit, there are numerous FICs with focuses ranging from ending homelessness and hunger, to supporting entrepreneurs and education. Sometimes their work really should be supported by public funds, as when, for example, they are performing a function at the request of government or a function that has historically been publicly supported. However, many FICs, like Goodwill Industries of Greater Detroit, are no longer relying solely on government funding or donations (although we appreciate and welcome them) to achieve their goals.
Here at Goodwill, for example, we are not just training our program participants for future jobs. We are also running margin-generating companies where those participants receive specialized training, and through these and other means, are ultimately creating opportunities for economic development that benefit the entire region. Moreover, those margins are poured right back into our good work, sustaining the organization’s programs and creating an even greater impact.
So, the next time you ask how you can help, or hear someone else ask what they can do, remember that through our local for impact corporations, the help being offered will frequently produce both social impact and economic development. Let’s find more ways to do some good.
Dan Varner is CEO of Goodwill Industries of Greater Detroit.