American business has divided itself into distinctly separate for-profit and nonprofit spheres, both in terms of legal organization and the fundamental values by which each sector operates. Somehow, the mantra of for-profit business has become "profit at any cost" with little regard for the social, economic, or even legal ramifications. The nonprofit world has strived to set themselves apart from for-profits by establishing a culture of openness, positive shared values, and respect. The newest breed of business owners, known as Social Entrepreneurs, are taking the lead in incorporating the values of the nonprofit sector into the for-profit world.
By law, a registered nonprofit organization is owned by, and responsible to, the public at large. Over the past few decades, for-profit businesses have adopted the attitude of responsibility only to the private owners themselves. This extreme focus has served to develop a culture of mistrust, waste, and exclusion between business and consumers. In addition, the questionable practices followed by big business are under more scrutiny than ever, leading a charge toward more responsible business standards akin to those followed in the nonprofit sector.
As up and coming entrepreneurs set out to develop the culture and values of their new venture, becoming familiar with the values and standards of successful nonprofits can be invaluable. The principles upon which a new business is formed will both inform and guide the actions of every aspect of the organization. All policies and procedures of the business will reflect the fundamental values you develop, and will be evident to all through the image your business portrays.
The fundamental values adhered to by the nonprofit sector, and desperately needed in the for-profit sector, include:
Commitment to the public good is critical in business. While nonprofits have a fiduciary duty to the public, for-profits have an inherent (though not legally defined) duty as well. A commitment to honesty and integrity, maintaining the public trust, and valuing social justice will build a strong relationship between the business and consumers, enhancing both reputation and profitability.
All businesses involve a number of stakeholders who are affected by the actions of the company.Accountability in business means taking responsible actions that you can and will explain if need be. Employees, vendors, and customers are all entitled to deal with a company willing to be accountable for their actions.
Honesty and reliability in business has been out of vogue for some time, but is still greatly valued by consumers, employees, and vendors alike (when they can find it). Play fair, tell the truth … these are lessons we all learned in kindergarten and remain relevant in all types of businesses.
Successful nonprofits make an effort to project responsibility beyond that required by law, and for-profit businesses can benefit from that attitude as well. The law does establish minimum standards for the treatment of employees, consumer protections, environmental requirements, and accounting standards, but those are just minimums. The best option for business is to treat all stakeholders and resources better than required. The voluntary implementation of responsible business practices will be evident to everyone in contact with the organization – a positive reputation that is likely to serve the business well.
The presumption that business owners must push ethical boundaries to be successful is old news. And, the established differences in values and operations between for-profit and nonprofit organizations are past their prime. It's time for all businesses to be run with a strong ethical foundation and with an eye for doing right while earning profits. The best route to get there from here is to educate all business leaders, starting with the entrepreneurial community, of the strength of nonprofit organization values.