For-Profit vs. Non-Profit ? Plywood People

Getting to be a part of the process of helping someone start his or her idea is very rewarding to us. The process is complex, and there are a lot of questions as companies and organizations are getting started.

One of the questions that gets asked frequently, is if an organization should be a for-profit company with a philanthropic aspect built in, or if the idea should be set up as a non-profit. We?re very familiar with this question. We too walked down the same road. We thought maybe some of the questions we worked ?through might also be helpful to some of you as you as you start pursuing your idea.

-What is your mission???When you look at the big idea of what you are pursuing, what is it that you want to accomplish?

-What are you going to be doing? What are the nuts and bolts of your idea, and what is it that you?re actually going to be doing?

-Is the MAIN purpose charitable [i.e. educational, philanthropic, programs oriented, benefitting society] OR is the main purpose aimed towards reaching business goals and increasing revenue regardless of whether that revenue is for you personally or going to some good cause? Is the actual work you will be doing directly accomplishing a charitable purpose?

-Are you willing to abide by the strict guidelines of being a charitable organization?

This was really helpful for us in thinking through what our purpose actually was. If you have a desire to do good with your business, but your goals are actually towards the selling of goods and services, you?re probably not a charity. You?re an amazing business doing good with some of your resources ? often called social enterprise or social entrepreneurship.

If your goals are to fulfill a certain purpose, you function mostly off of donations and grants, and you?re willing to comply with rules your board sets up for your organization, [and you're willing to file lots of paperwork] then you might be better off being a non-profit.

There are a lot of OTHER important questions to consider, but this at least gets your mind working in the right direction.

It?s EASIER in some ways to be a for-profit company, but in some cases the benefits of being a non-profit outweigh the ease of being a business. You just have to know what the main purpose behind what you?re doing is, and hopefully you?ll find your answer.

[Thank you to Robyn Miller and?Pro Bono Partnership of Atlanta?for its wonderful expertise.]

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This little slideshow is helpful in the process?

Other Advice for Entrepreneurs:
The Problem With Innovators: Part 1
The Problem With Innovators: Part 2
zero-sum game
Giving Up

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