Society’s
three main sectors, the public, private, and nonprofit share commonalities and
differences. First, let’s explore some of the nonprofit sector’s commonalities
with the public and private arenas. The
public and nonprofit sector align more naturally at first examination with one
another than either does with the for profit sector. The public and nonprofit sectors
both work actively to create a stable and ideally fairer society. As Berman
notes in Doing
“Good” vs. Doing “Well”: The Role of Nonprofits in Society, the private
sector, while benefiting from a more stable society, does not work to improve
society at all costs. Rather, the bottom line for business is to create
profit.
The public and nonprofit sectors
also work with more budgets constraints than the private sector (although all
three handle money differently). The different treatment of profit is the
“fundamental distinction” between for profit organizations and nonprofit
organizations according to David Renz in the Jossey-Bass
Handbook of Nonprofit Leadership and Management (pg. 43). Money can go
back to shareholders in a business, but profit MUST legally return to support a
nonprofit’s mission rather than returning to board members. The public sector
falls somewhere in between the private and nonprofit sector. In the public
sector, money can go back to shareholders in a manner of speaking if we
consider tax-cuts a return to shareholders.[1]
Additionally, surplus money can also be re-directed to different governmental
initiatives (or in other words, go back to support a mission of government).
While the public and nonprofit
sectors align in a number of ways, they also differ in key areas. The public
sector is more subject to political and policy changes than the nonprofit
sector. As political power shifts, so do priorities in governmental agencies.
Because of these shifts, public sector programs may not have the longevity of
nonprofit programming. If (and of course this is a big if) a nonprofit secures long-term
funding for a program, it can continue indefinitely, regardless of what
political party is in power and what policies are priorities in the government.
Of course, if a topic is a focus of politicians or the public, a nonprofit’s
funding may receive a boost from this attention.
Although the similarities between
the nonprofit and public sector are arguably more apparent than those with the
for profit sector, commonalities do exist between nonprofits and for profits.
Ken Miller writes in Greed is
Good, “everyone is trying to make a profit.” He argues that in the public sector,
organizations should be greedy, fighting for profit just like businesses. He explains
that these public sector profits are results such as cleaner air and safer
neighborhoods. I would argue that many of these “profits” (or results) are the
goals of the nonprofit sector too. In this way, the private, public, and
nonprofit sector align in their drive for results.
Although this drive for results
unites the three sectors, the nonprofit sector does have its own unique
challenges in our society today. Berman, sums up this challenging role when he
writes in Doing
“Good” vs. Doing “Well”: The Role of Nonprofits in Society about a
“social welfare vacuum” created by a lack of alignment between the real needs
of the people and the support of the government. Nonprofits, Berman explains,
have the unique challenge in our society of filling this void with programming
and education. I believe this need will continue to grow as our government
continues to rely heavily on contracting out services and depending on other
organizations and nonprofits to provide needed social services.
[1] I
should note that the idea of the public as shareholders in the government comes
from Ken Miller’s article, Greed is
Good.
