Agree that specifics are important here. Some specifically interesting examples to me where non-profit and for-profit models overlap:
A university is set up as a non-profit org, receiving charitable donations from alums and other institutions or individuals. The university’s main non-profit activities are education and research. The university also wholly owns a for-profit org (basically, a hedge fund) which is used to manage the university’s endowment. edit: actually, an endowment fund also counts as regulatory non-profit if its sole purpose is to fund a non-profit’s activity
Mozilla Foundation and Mozilla Corporation. Mozilla Foundation is a non-profit org that also wholly owns the for-profit org Mozilla Corp. Mozilla Foundation’s main non-profit activities seem to be internet advocacy and funding other related projects. My impression is that Mozilla Corp. derives most of its income from search engine placement in Firefox, and then Mozilla Foundation is subsequently funded by Mozilla Corp.’s profits. I haven’t looked in detail though, so I may be off.
Note that in the above two examples, I’ve been using the terms “for-profit” and “non-profit” in a primarily regulatory sense, i.e. for-profit = corporation, LP, etc. vs. non-profit = 501(c)(3). In those examples, the terms also seem to map onto their “intentional” sense, but it’s unclear what form a general rule might take to disentangle “for-profit” vs “non-profit” in their regulatory vs “intentional” senses.
Technically nonprofit doesn’t mean you can’t make a profit. It just means you can’t distribute that profit, the way a for-profit pays dividends. You have to use any profit for operations.
I was mostly analyzing nonprofits that don’t charge for services. In the case of a nonprofit that charges, and does not rely on external donations, then the “product loop” is much more intact. In that case it’s only the investor loop, the “return loop” that is still problematic.
That’s really important, and I suspect a big source of confusion about your thesis. If you said “if you can find a price signal, incorporate it into your strategy”, even for non-profits, I suspect you’d get a lot less disagreement.
Agree that specifics are important here. Some specifically interesting examples to me where non-profit and for-profit models overlap:
A university is set up as a non-profit org, receiving charitable donations from alums and other institutions or individuals. The university’s main non-profit activities are education and research.
The university also wholly owns a for-profit org (basically, a hedge fund) which is used to manage the university’s endowment.edit: actually, an endowment fund also counts as regulatory non-profit if its sole purpose is to fund a non-profit’s activityMozilla Foundation and Mozilla Corporation. Mozilla Foundation is a non-profit org that also wholly owns the for-profit org Mozilla Corp. Mozilla Foundation’s main non-profit activities seem to be internet advocacy and funding other related projects. My impression is that Mozilla Corp. derives most of its income from search engine placement in Firefox, and then Mozilla Foundation is subsequently funded by Mozilla Corp.’s profits. I haven’t looked in detail though, so I may be off.
Note that in the above two examples, I’ve been using the terms “for-profit” and “non-profit” in a primarily regulatory sense, i.e. for-profit = corporation, LP, etc. vs. non-profit = 501(c)(3). In those examples, the terms also seem to map onto their “intentional” sense, but it’s unclear what form a general rule might take to disentangle “for-profit” vs “non-profit” in their regulatory vs “intentional” senses.
Technically nonprofit doesn’t mean you can’t make a profit. It just means you can’t distribute that profit, the way a for-profit pays dividends. You have to use any profit for operations.
I was mostly analyzing nonprofits that don’t charge for services. In the case of a nonprofit that charges, and does not rely on external donations, then the “product loop” is much more intact. In that case it’s only the investor loop, the “return loop” that is still problematic.
That’s really important, and I suspect a big source of confusion about your thesis. If you said “if you can find a price signal, incorporate it into your strategy”, even for non-profits, I suspect you’d get a lot less disagreement.
Thanks, that’s a clarifying distinction.