Wednesday, February 1, 2017

Non-Profit, Government, and For-Profit Agencies: The Long and the Short of how They're Different

Like all systems worth studying, the factors involved exist on a continuum. The relationship between non-profit, government, and for-profit agencies are no exception, seeming to slide along an interchangeable scale of scope depending on the topic at hand. This comparative summary assigns each agency to three categories to broadly characterize the approach and highlight similarities and differences: micro, mezzo, and macro.

Mission, Commodities, and Clientele
Similarities. All entities focus on developing some type of transferrable commodity to their clientele. However, their mission, commodity, and relationship with clients differs drastically (Berman, 2002: 5-6).

Differences. For-profit agencies have a micro-focused mission, commodity, and clientele. Their mission is to generate income and offset expenses to broaden profits (Berman, 2002: 5). All other activities, philanthropic or other, are secondary to and negotiate with their primary mission to generate-profits. This interacts with their clientele (Berman, 2002: 6-7). While it seems obvious that a for-profit entity most serves their consumers, history shows that the most prioritized client is the shareholder with an overwhelming emphasis on profits. This puts a strain on the balance between fostering a relationship with consumers and fostering a relationship with shareholders. Conversely, for-profit entities singularly develop consumer products, whether that be a consumable or a service.

Non-profit agencies have a mezzo-focused mission, commodity, and clientele (Berman, 2002: 8). Their mission is to provide an equitable public-good service inaccessible to clients through governmental and/or for-profit means. The efficiency and scope of this could take a number of different turns depending on the commodity provided, which is the most prioritized determinant of success. The commodity could be a product, but most often it is a direct service, which frames whom the target clientele is. As for clientele, the breadth and expansion of a non-profit is not determined by the client (those receiving services) satisfaction, but donor satisfaction which includes fiscal donors and volunteers (Cramer et al., 2010). Because of this, the relationship between the non-profit entity and donors is prioritized over the relationship to clients, which has the potential to cause ethical and moral ambiguity as to how effective the non-profit is in achieving their mission of providing services to disparate clients.

Government agencies have a macro-focused mission, commodity, and clientele (Renz, 2016: 96-98). Their mission is broadly to provide equitable and just access to government services without explicit promotion of products . The universe of government and politics is tenuous and rife with conflicts that implicate mission, commodity, and clientele. Government agencies are designed to serve the interest of the general public, but this often finds conflict between donors (lobbyists) and voters (a disparate group within target zones like districts, counties, states, etc). As a commodity to provide equitable and just access to government services, government agencies develop programs and policies that fit the priorities of the general public.

Structure of Board and Accountability
Similarities. Non-profit, government, and for-profit agencies all share very similar structures of accountability, but, as previously discussed, the prioritization of relationships amongst invested parties (clients vs. donors, shareholders vs consumers, voters vs. lobbyists, to name a few) (Berman: 2002: 7). Largely, the structure is vertical and hierarchical in prioritization with a board of directors overseeing the operations and being held accountable for the effectiveness of the organization.