Dirty profits

Dirty profits

Dirty profits is the headline screaming from an article produced by Pro Bono Australia today about the not-for-profit sector.  The article picks up on a discussion at a conference in Melbourne on ‘Creating Shared Value’.  The headline is a reference to a quote from Tim Costello “There’s suspicion as if somehow making profit is dirty…”

I have spoken and blogged about major issues facing the not-for-profit sector many times.  It is one that I am constantly preparing my clients to face head on.  The benefit of my career in the media, corporate sector, business sector and not-for-profit sector is I have developed a unique insight.  I can see both the main problems and how to solve them.

There are three basic problems which stem from the argument outlined in this article on ‘dirty’ profits:

1. Culturally in the sector as well as in the general public, people believe the term ‘not-for-profit‘ means you can not make money.
2.  Organisations do not understand the competitive advantage they have over business and how reinvesting money into their organisation adds value to clients. It is not always about offering the cheapest or free service to everyone.
3. Business can get a lot from supporting not-for-profits but they should not try to do the ‘social’ work themselves. We all need to recognise the tremendous working being done by organisations with a view to their expansion rather than going off on your own.

There is a way all this can work, but the changes must come from within the NFP sector first. The risk is otherwise they will be over run by businesses who for all their ‘social good’ and ‘moral drive to add value to the community’ will always be beholden to their shareholders. The trick is in showing both parties how it can work for them.  No dirty profits involved.

The answer is simple when you take it step by step and work on solid foundation, understand how everyone needs to benefit then provide the outlets for success. I have spent some time developing a framework which will be published in my book next year.

I am happy to meet and discuss with any organisation, how to grow and secure a sustainable future working with the support of business.  The simplistic and dated view that there could ever be dirty profits in the sector is dangerous to the long term survival of any not-for-profit.