Why nonprofits matter - Part 3

We are mission-focused rather than profit-focused.

Nonprofits are legally required to focus on a charitable mission and barred from existing to enrich the individuals who are involved in them. They are formed by people who share a mission that makes the world a better place. The mission is the north star guiding their work and their decision-making.

Stories of greed and capitalism run amok are quite prominent in the news right now. I am heart-broken to hear about the exploits of private equity funds, also known as vulture capitalists. These funds have a laser focus on delivering quick profits for their investors and are willing to destroy people’s lives and entire industries to ensure that they are maximizing their return. They will purchase a nursing home, reduce staff wages and benefits, sell off assets, then leave behind a broken, indebted organization that cannot continue to serve its residents. Many of the challenges associated with healthcare these days stem from private equity’s interventions.

Nonprofits are a counterpoint to this focus on profit at any cost. Nonprofits are businesses and need to collect revenue to cover all their expenses. However, they do not have investors or distribute profits. Any surplus is reinvested in the mission. Nonprofits are not perfect and can suffer from poor leadership, but the corporate form is less subject to abuse and exploitation.