Reimagining the Non-Profit Sector

The non-profit sector does so much good in the world, why the heck do they define themselves in the negative?  Of course this sector is suffering from an identity crisis!  Even though the sector accounts for 7% of Canada’s GDP - a bigger share than our extractive resource industry -  it doesn’t get the attention or influence it deserves.

To be clear, the purpose of Canada's Not-for-profit Corporations Act is to “allow the incorporation or continuance of bodies corporate as corporations without share capital”.  Basically, they are corporations (I don’t think I’ll ever be fully comfortable with the idea of corporations as ‘bodies’, as if they are human) who aren’t allowed to issue any share capital.  This means no venture capital, no private equity, and certainly no initial public offering.  They are not allowed to raise money by selling any equity shares.  It’s silly.  Instead, they borrow at a higher cost of capital and spend hefty amounts on fundraising.  

But here’s what they are allowed to do: have a positive impact on the world.  They help people, and serve communities that would otherwise go unserved.  They do all the dirty work that corporations find ‘economically unattractive’.  They are frontline workers in the restoration of our society and planet.  They add to our human capital through education and health.  They add to our social capital by creating beautiful art and helping people who may have had a tough break in life.  They are protecting our natural capital by being proxies for trees, rivers, and ecosystems that otherwise don’t have a voice in our system.  They have a tremendous impact on our economy, far outweighing their 7% share of GDP.

Here’s my audacious idea: let’s rebrand it the For-Impact sector!  We’ll include charities, non-profits, co-ops, and for-profit social enterprises like B Corporations.  Instead of designing strategies with the end result of zero-profit, we’ll have organizations with a mission to maximize positive impact.  They’ll strive hard to increase revenues so that they can make strategic investments to maximize their social return on investment and decrease their environmental footprint, all while maintaining consistent cash flows that lets them pay employees a strong living wage.  They’ll provide meaningful employment to millions, and our society and ecosystems will be all the better for their growth.  

Now that’s a sector that would have a strong identity!

Do you like this post?
Don't let your money do things you wouldn't