For vs not-for-profits. What is the difference?

The line between for-profits and not-for-profits is becoming increasingly blurred. Two quick examples of this are:

• For-profit companies launching public health campaigns in India around soap. The campaigns not only increase soap sales, but also help improve human health
• Google just registered its $90 million philanthropic arm, google.org, as a for-profit

The economist Susan Raymond recently argued in the journal On Philanthropy in September that, “We are beginning to understand that old categories” — commerce, capitalism and philanthropy — “do not serve the new generation of either social problems or market opportunities.”

An organization should not be judged by its tax status, but rather by the value and results that it creates (similarly traditional for-profit companies should not be judged solely by how much money they make). People should ask questions like:

• How many jobs has your organization created?
• What is your organization’s impact on the environment?
• Has your organized delivered on its mission?
• How many resources have you invested in raising the capital that you need to run your enterprise (whether it is for or non-for-profit)?

Caveat Emptor

Not all companies use the same standards for fair trade. For example, one business Grassroots Creations, labels their products as fair trade and as helping African workers. While the designs from their products do come from designers in Zimbabwe, their products are acutally manufactured in China.

Labels from certification organizations like TransFair and the Fair Trade Federation can be good guides to help you determine whether products are actually Fair Trade or not.