This article is from NPQ’s fall 2015 edition, “Making Things Work: Considerations in Nonprofit Strategy.” Subscribe Today
As social entrepreneurs around the world create new organizations to solve emerging public problems, they do so drawing on a broad range of organizational forms, ranging from the traditional nonprofit form to the classic business corporate form—and, most recently, a whole host of hybrid forms located between these poles. Sometimes, the initial institutional auspice works well for the entrepreneur, and constitutes a firm foundation on which to build the organization. Often, however, the question of which form to adopt generates substantial stress inside the organization, because the reasons one form would be preferred over another are not well understood. The complexity of this decision is exacerbated by the continually blurring distinctions between for-profit and nonprofit organizations around the world. For example, more and more nonprofit organizations are integrating earned income models—with sales, revenues, and profits—into their nonprofit activities. At the same time, the socially oriented business attempts to integrate selflessness and social impact into its for-profit activities.
As more nonprofits behave like businesses and more businesses uphold social values, it becomes less obvio