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Not For Profit: Difference between revisions

Not For Profit: Difference between revisions

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'''A not for profit (NFP) organisation is one thats primary aim is to not to make profit but to do something else such as protect the earth or promote ping pong. In recent years, as corporate culture has spread the line of profit has become increasingly blurry.'''
'''A not for profit (NFP), is a type of corporation that lacks the primary drive to maximise profit for shareholders ([[Fiduciary Duty|fiduciary duty]]). An NFP still needs to make money to pay for labour and operational costs however its main objective is something other than profit to shareholders, like promoting football around the world or curingh HIV. In recent years, as corporate culture has spread the line of profit has become increasingly blurry.'''


To operate NFPs need people, people require wages, this is not deemed as profit as people are a ''necessity'' to the operation of the business. The best NFPs can be at least ten times better than a typical NFP operating within the same area, hundreds of times better than poor-performing NFPs, and the worst NFPs can do harm<ref>Based on Animal Charity Evaluators comprehensive review of The Humane League, Criterion 3: Cost Effectiveness, accessed on 2021-11-11. This report estimates 450m to 9b chicken's lives improved on a spend of $5.8m. This translates to a range of ~80k to ~1.6m lives per $1,000 USD. ↩︎</ref>. This is to do with legacy efficiency, since the ''digital revolution'' many NFPs have large human resources bills for workers who do unproductive jobs<ref>Boccalatte, K. (2021), "The growth of unproductive labour and the new crisis of management: the case of Australia", ''Journal of Management History'', Vol. ahead-of-print No. ahead-of-print. <nowiki>https://doi.org/10.1108/JMH-07-2021-0039</nowiki></ref>.  Furthermore, with inequality is rising, CEO compensation has grown 940% since 1978, this includes those working in NFPs.<ref>Economic Policy Institute: [https://www.epi.org/publication/ceo-compensation-2018/ CEO compensation has grown 940% since 1978]. Published: August 14, 2019, Accessed 16th April 2022.</ref> NFPs should have a moral commitment<ref>Centre for Global Development: The Moral Imperative toward Cost-Effectiveness in Global Health. Published March 2013<nowiki/>https://www.files.ethz.ch/isn/162329/1427016_file_moral_imperative_cost_effectiveness.pdf</ref> to efficiency to ensure spiralling ineffcicient work forces do not swallow money where it is needed most.
To operate NFPs need people, people require wages, this is not deemed as profit as people are a ''necessity'' to the operation of the business. The best NFPs can be at least ten times better than a typical NFP operating within the same area, hundreds of times better than poor-performing NFPs, and the worst NFPs can do harm<ref>Based on Animal Charity Evaluators comprehensive review of The Humane League, Criterion 3: Cost Effectiveness, accessed on 2021-11-11. This report estimates 450m to 9b chicken's lives improved on a spend of $5.8m. This translates to a range of ~80k to ~1.6m lives per $1,000 USD. ↩︎</ref>. This is to do with legacy efficiency, since the ''digital revolution'' many NFPs have large human resources bills for workers who do unproductive jobs<ref>Boccalatte, K. (2021), "The growth of unproductive labour and the new crisis of management: the case of Australia", ''Journal of Management History'', Vol. ahead-of-print No. ahead-of-print. <nowiki>https://doi.org/10.1108/JMH-07-2021-0039</nowiki></ref>.  Furthermore, with inequality is rising, CEO compensation has grown 940% since 1978, this includes those working in NFPs.<ref>Economic Policy Institute: [https://www.epi.org/publication/ceo-compensation-2018/ CEO compensation has grown 940% since 1978]. Published: August 14, 2019, Accessed 16th April 2022.</ref> NFPs should have a moral commitment<ref>Centre for Global Development: The Moral Imperative toward Cost-Effectiveness in Global Health. Published March 2013<nowiki/>https://www.files.ethz.ch/isn/162329/1427016_file_moral_imperative_cost_effectiveness.pdf</ref> to efficiency to ensure spiralling ineffcicient work forces do not swallow money where it is needed most.
== Not For Revenue ==
The idea behind not for revenue (NFR) is to establish an entity type which does not aim to maximise profit or revenue but a social cause. Arguably this could be catergorised as a social enterprise however it is a distinct entity as it removes the any association to profit by committing to full [[transparency]].


=== Reference ===
=== Reference ===

Latest revision as of 01:46, 21 November 2022

A not for profit (NFP), is a type of corporation that lacks the primary drive to maximise profit for shareholders (fiduciary duty). An NFP still needs to make money to pay for labour and operational costs however its main objective is something other than profit to shareholders, like promoting football around the world or curingh HIV. In recent years, as corporate culture has spread the line of profit has become increasingly blurry.

To operate NFPs need people, people require wages, this is not deemed as profit as people are a necessity to the operation of the business. The best NFPs can be at least ten times better than a typical NFP operating within the same area, hundreds of times better than poor-performing NFPs, and the worst NFPs can do harm[1]. This is to do with legacy efficiency, since the digital revolution many NFPs have large human resources bills for workers who do unproductive jobs[2]. Furthermore, with inequality is rising, CEO compensation has grown 940% since 1978, this includes those working in NFPs.[3] NFPs should have a moral commitment[4] to efficiency to ensure spiralling ineffcicient work forces do not swallow money where it is needed most.

Reference

  1. ↑ Based on Animal Charity Evaluators comprehensive review of The Humane League, Criterion 3: Cost Effectiveness, accessed on 2021-11-11. This report estimates 450m to 9b chicken's lives improved on a spend of $5.8m. This translates to a range of ~80k to ~1.6m lives per $1,000 USD. ↩︎
  2. ↑ Boccalatte, K. (2021), "The growth of unproductive labour and the new crisis of management: the case of Australia", Journal of Management History, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JMH-07-2021-0039
  3. ↑ Economic Policy Institute: CEO compensation has grown 940% since 1978. Published: August 14, 2019, Accessed 16th April 2022.
  4. ↑ Centre for Global Development: The Moral Imperative toward Cost-Effectiveness in Global Health. Published March 2013https://www.files.ethz.ch/isn/162329/1427016_file_moral_imperative_cost_effectiveness.pdf
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