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
