So the debate is beginning to rage. Are non-profits or social entrepreneurs better able to address the world's problems?
It's an interesting question.
Let's look at some facts shall we?
FACT #1: NON-PROFITS ARE BUSINESSES
Let's begin to look at it on a macro scale, relative to my home state, Colorado and dabble just a bit on a national level.
As you probably already know, there are a LOT of non-profits in our community here in Denver. Over 13,000 in Colorado (Accounts for 1.5% of the total 501c3's in the United States) and well over 3,000 in the Greater Denver Metro area alone. With that said, nonprofits in the United States contributed 5.5% to the GDP in 2012, and over $3 Trillion in assets, according the the National Center for Charitable Statistics. Contrary to what most people think, 71% of revenue for a nonprofit comes from programs and services they render to the community, not from fundraising and grants. Fundraising only contributes to about 6% of the funding.
FACT #2: NON-PROFITS ARE FOR THE MOST PART SMALL BUSINESSES
Out of the over 3,000 charities in the greater Denver Metro area, over 2,000 of them would be considered very small with under $500,000 annual budget.
If we begin to look at them as we would look at the startup community, we will begin to see similarities and differences. Similarity #1, there are a lot of them. Similarity #2, they are started by people with passion. Similarity #3, funding is the number one challenge. Similarity #4, developing an effective team can help move mountains.
How let's look at some of the differences. Difference #1, there are TONS of resources to help startups thrive. Difference #2, collaboration and collaborative efforts and forums abound in the startup community. Difference #3, government and business work very hard to provide resources for the startup community because it is good business.
Nonprofits have the same challenges that startups and indeed any small business has, with the exception of access to resources.
To answer the question on who is more well equipped to address the social issues of the world, I think there needs to be much more knowledge about the nonprofit sector brought ot light, more collaborative efforts between business and nonprofits on a much broader level than just one specific cause, and more infusion of ideas on how the two sectors can tackle these issues head on!
Corporate Compassion, LLC, Denver Gives, Inc, and GoMAD4charity.org were all created to help address these issues and challenges. They also work hand-in-hand to bring the small nonprofit community and the small business community together to create mutually beneficial results!
If interested in learning more about any of what you have read or about the above companies and products, feel free to contact me at [email protected] or follow me on twitter @MADvolunteer.
Thank you for reading!