[DDN] I make no profit, therefore I suck

[Joe Beckmann]

Poverty is quite real, but it is not poverty that drives compassion or
philanthropy as much as the philanthropist. Too many pretend it is the state
of poverty - which is lots more universal than philanthropy. So also,
services are never really free - somebody does something for a reason,
whether it be financial or other, and that reason is the engine behind
everything, regardless of whether it is profit or non-profit. Raising funds
subsidizes the service, but does not render it free, even if "fully funded."
It means merely that somebody else is paying in cash, others are paying in
other forms.

Finally, pricing has to do with the market, not with the profit. Profit
drives SOME kinds of pricing; cash profit drives a subset of THOSE kinds of
pricing; yet profit is a byproduct of the transaction, not the transaction
itself. It is a real pretense that nonprofit ignores pricing, since - as
that range of nonprofits implies - tuition can range from "in-kind" to
$60,000/year; medical services from barter to almost infinitely expensive
per incident. That variation is not dependent at all on whether the vendor
is profit or non-profit, but, rather, on how the price reflects the mission
of the organization and where the resources are or were or might come to
cover none, some, or all of the expenses incurred.

There is a lot of sloppy thinking regarding profit vs. nonprofit. In fact,
in the West, the difference is only a matter of taxes and, to a lesser
extent, the way the organization is regulated by public agencies, and,
finally, in whether an investor gets a cash return, a capital return, or a
philanthropic good feeling from a "successful" transaction. Many nonprofits
pay quite handsomely; many for-profits go broke.

Joe

On 7/10/07, Taran Rampersad <cnd at knowprose.com> wrote:
>
> Joe Beckmann wrote:
> > In a world where NFP's range from Mass General and Harvard to Mabel's
> > home-based day care there is an amazing amount of generalization in this
> > discussion.
> The list is a pretty diverse group. Is there a specific context you're
> interested in?
> >  The pretense of poverty and "free" services is patently absurd
> > for by far the largest part of the non-profit sector, since profit has
> > nothing whatsoever to do with pricing.
> >
> Maybe I'm tired, but I don't understand the last sentence. 'Pretense of
> poverty' is patently absurd? "Free services" is patently absurd? Profit
> has nothing to do with pricing? Could you help me understand what you
> mean better?
>
> --
> Taran Rampersad
> Presently in: San Fernando, Trinidad and Tobago
> cnd at knowprose.com
> http://www.knowprose.com
>
>
> Pictures: http://www.flickr.com/photos/knowprose/
>
> "Criticize by creating." — Michelangelo
> "The present is theirs; the future, for which I really worked, is mine." -
> Nikola Tesla
>
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-- 
Joe Beckmann
22 Stone Avenue
Somerville, MA 02143
617-625-9369