“East is East, and West is West, and never the twain shall meet”, wrote Rudyard Kipling in the poem “The Ballad of East and West”.
Non-profit is non-profit, and for profit is for profit, and never the twain shall meet – or should they? Maybe they already do!
There is an on-going discussion in the Business as Mission movement about “real business”, “fake business”, “propped up business”, “sustainable business”. This conversation is important. But sometimes it becomes heavy with ideological purists who see no connection between non-profit and for profit. Mission is mission and business is business. Some even state that there mustn’t be any connection: “Business is business and businesses carry their own costs”. But do they? Is that really what the business world in general looks like?
Let’s first acknowledge that there are differences between NGOs, mission organizations, churches and other non-profits on the one hand, and businesses on the other.
They operate with different paradigms, they are different legal entities, they have different modus operandi, and they demand some different skill-sets.
But from a Biblical perspective church and business are also very close. The purpose of the church is to glorify God, serve people, and meet various needs. The church is a non-profit entity. Business from a Biblical perspective should also glorify God, serve people, and meet various needs. But businesses exist to make a profit – but not exclusively.
Are they mutually exclusive? Should a real business never receive free money, free advice, or pro-bono workers? This begs the question as to what “real” business is. The assumption that real businesses are self-sustaining does not give a full picture of the eco-system in which businesses operate. The Economist, which also uses the term eco-system, has a very enlightening article dealing with this in the Oct 8 issue: “A helping hand for start-ups”.
They write about one major initiative – originating from the corporate world – which gives FREE support services to business people, worth USD 730 million. Is that wrong? Is that skewing businesses? No, these kinds of pro-bono work and subsidies happen all the time in “real” businesses, in the market place.
Why should we in the BAM world be afraid of setting up systems of people volunteering their time which can help BAM companies to start and grow?
We have, in the Western world, “real businesses” which receive tax breaks, bail-outs, investment incentives, SME economy building subsidies, etc… How many family businesses, in both the rich and the poor world, do not have family members pitching in for free?
Is it wrong to help BAM businesses for free – to a certain degree – in various ways in the Arab world and Asia?
No business is self-sustaining. Nothing is – not even the church. The only self sustaining entity is God. The creation and every human being derives from God, is created by him. What we have and what we are comes as a gift – it is free.
People in business use free gifts – donations – to start and grow businesses. Gifts like an entrepreneurial eye and a business acumen. Businesses use other gifts from God like iron ore and water. All God-given subsidies as it were.
This does not mean that we should confuse non-profit and for profit, or that we should be sloppy business people hoping for bail-outs. No, the business of business is business, and that includes making a profit, and having a good social, environmental and spiritual impact.
But we shouldn’t be judgmental if somebody mentors a company for free. Why should we criticize a business owner who doesn’t draw a full salary from the company because he or she has other income streams?
In the business eco-system there are subsidies, tax-breaks and pro-bono work. These incentives from government, from the corporate world and from NGOs, can help build healthy growing business. It would be wrong to discard a business – including BAM businesses – just because it draws on free advice or uses tax breaks.
Non-profit is non-profit, and for profit is for profit, and never the twain shall meet? Wrong, they do meet and these meetings can be profitable – in the wider sense – for people, businesses, communities and nations.
While I agree that all businesses need start-up capital to launch their businesses in the market place and that this money might be seen as a donation, the goal of a for-profit business is to become self-sustainable. In order to grow a business, profit is needed and a healthy company will therefore always be a company in the black. However, most often the venture capital is not a gift but rather a loan that either has to be paid back to the investor or an exchange giving the investor shares and/or influence within the business. But, indeed, businesses do receive “gifts” in the broader sense in the form of benefits and sometimes free counselling and the like. Nonetheless, even though most MNEs today are focused on the “social bottom line”, hence also ethical issues, and sometimes even the “green” bottom line, the raison d’être is still that it makes profit. Profit is key for survival in an “open” economy (i.e. where the state is not subsidizing the business to keep it alive). Nevertheless, with the drop and heavy competition for donor money and the push among consumers for ethical business behaviour, the business and the social sector are becoming more and more interlinked. I expect both more collaboration between the sectors, such as sharing/subletting marketing platforms and bying/sharing sector expertise and legal assistance as well as an increasingly merged “third” sector of business/social and social/business activities and even organisations. What disturbed me in the Economist article was the fact that start-ups do not seem to be keen on growing to larger enterprises. This is exactly the problem with microfinance where the entrepreneur often is a sole trader whose only goal is to provide for her family, which is understandable indeed. On the contrary, a BAM business seeks to employ people and thus have a multiple social effect (because when you employ one, the person may then be able to provide for a whole family). The BAM businesses may thus seem to have a higher “multiplication effect” and jobs have become a precious gift even in Europe. In my opinion, this is the very raison d’être for BAMs: the world, especially Europe, is desperate for jobs these days!