Thursday, January 29, 2015

The Necessity of Interdependence

When considering the nonprofit sector compared to the public sector and the private, for profit sector one may initially assume vast differences between the three.  On the surface, it may appear that each is working with its own set of values towards its own goals without consideration of the other sectors.  However, there is a unique interplay between nonprofits, government, and for-profit businesses that enable one another to be successful. 

The Jossey-Bass Handbook recognizes that non-profits vary greatly in structure and purpose.  Some nonprofits are small organizations with no employees and others are organizations such as “foundations, universities, religious bodies, and health care complexes” that boast thousands of employees and are working with billions of dollars.  Furthermore, while nonprofits are typically thought of as providing charitable goods and services, this is not a necessity in being a nonprofit and many various types of goods and services are provided through this sector.

The nonprofit, for-profit, and public sectors do each have differing structures and purposes.  As seen in The Jossey-Bass Handbook, the for-profit sector is distinguished in that its main objective is to earn money for its owners.  In contrast, the earnings of nonprofits are not allowed to be distributed to those who control it.  The public sector (government) is an entity which works to act in the public’s best interest and protect the public’s rights. 

Today, there is a unique interdependence between these three sectors.  First, although non-profits and businesses differ in their goals, the relationship that these two sectors have with one another contributes greatly to each one’s success.  As illustrated by Berman, nonprofits receive resources from businesses and business employees that are necessary for them to function.  Some businesses believe that their sole purpose is to generate a profit and leave it to their employees to support nonprofits with their incomes if they so choose.  Other businesses take a different approach, and believe that in order to have a successful business; it must be operating in a stable society.  Therefore, they choose to support nonprofits through financial or other means in order for them to function effectively and assist in helping to create the stable society that businesses need to thrive.  While nonprofits need the resources provided by businesses, the success of the for-profit sector is dependent on how well the nonprofits are able to deliver goods and services to society. 

Furthermore, there is a unique interdependence between the nonprofit and public sectors.  The government is in place to act on behalf of its citizens and its roles have changed over time.  Berman shows how the role of government drastically shifted during the Great Depression Era.  During this time, the government began focusing its efforts on social welfare, becoming a “safety net” for its citizens, and being an agent of economic recovery.  Like the nonprofit sector, the goal of the public sector is not to make money but to help create a better society.  While the structures of the government and nonprofit organizations are quite different, both of these sectors are currently working address the social welfare needs of the public.  Moreover, each sector is in need of the other in order to address these needs in the most effective ways possible. 

The overall structures and goals of the nonprofit, for-profit, and public sectors are quite different.  However, this does not mean that one sector is the “better” or “correct” sector.  In order for society to function as well as possible, each is needed.  Furthermore, interdependence and collaboration between these sectors is vital to the success of each sector.   

Berman, Howard J (2002).  "Doing Good vs. Doing Well: The Role of Nonprofits in Society."  The McNerny Forum, 39: 5-11

Renz, David O. and Associates (2010).  The Jossey-Bass Handbook of Nonprofit Leadership and Management.  San Francisco: Jossey Bass