To state the obvious, non-profit organizations often struggle to find the funding they require to fulfill their goals. As mentioned in an earlier post, this is probably one of the reasons that non-profits are slow to pick up on new technologies which might help them expand their impact. It’s also a reason why plenty of non-profits fail. But why does doing good have to be non-profit?

An article in the NYtimes talks about how one educational non-profit (www.epals.com) decided it was time to drink the kool-aid…the capitalism kool-aid. It’s not the first, and no doubt won’t be the last, organization to decide that going for-profit can actually allow them to help more people. From Google.org to microfinance, many so-called social entrepreneurs are beginning to develop social businesses to improve their work–and they’re succeeding. This is the sister idea of Corporate Social Responsibility (or as I’m fond of saying: Capitalism 2.0) and sustainable development, except that instead of starting from a for-profit vantage and aiming to decrease negative impact, these businesses are starting from a non-profit vantage and trying to create and improve a bottom line (Capitalism 2.1?). And doing so gives them a flexibility and freedom that many non-profits lack. For-profits can take more risks, can respond to the needs of the ‘market’ rather than that of their biggest donors, and can attract top talent with bigger salaries (even a do-gooder’s gotta pay rent).

Muhammad Yunus, Nobel prize winner for his ground breaking work in microfinance, thinks this is the wave of the future. He argues “capitalism is interpreted too narrowly”. This makes a lot of sense, when you think about it. Private ownership and free markets are not necessarily in conflict with the basic human instinct to do good. In fact, to assume so is to assume that people are extremely one dimensional. Human beings (at least not all of us, one hopes) are not just profit-hungry islands. It’s not like we’re all extreme altruists here, let’s be honest, but we have families and friends, we live in communities we care about, and we feel good after we do someone a favor even if it takes some money out of our pocket. Social Business might very well be the best way to harness the power of that complex being we call humanity. Ayn Rand may not agree (or might she?) but who says you can’t look out for others while looking out for yourself?