For profit vs not for profit

I was an accreditation surveyor for approximately 30 years.  During that time I saw about 500 organizations around the country.  

Among the general public I often encounter the view that not for profits are good and for profits are bad.   My experience has been that the line is not so clearly drawn.   I have seen amazingly generous for profits and terribly money grubbing not for profits.  In a broad sense there is better oversight of not for profits…but not necessarily so. I have found it best to judge on a case by case basis.

Why? Because not all not for profits have good boards that do their jobs, and some for profit owners see no point in giving away control of the organization they created so that they can argue with the board as to how to best fulfill the organizations mission.

I have encountered a for profit where the owner was making zero income of any kind from the company.  I found a not for profit where the CEO was making over 1 mil plus considerable benefits.

Then I saw a low budget not for profit where the CEO had a very modest salary … but he had a very interesting Whole Life insurance policy that was costing the organization $250,00000 a year. Of course, it was buried in the budget under the very broad heading of “Insurance”.

I agree with all that. I like the recent rise of Benefit Corporations -- though I don't really know enough to claim an informed opinion. It seems somehow less sleazy than money grabs masquerading as not for profits, but I'm sure it's all in the details of implementation.

Hi Christopher,

As I know you are aware, the devil is in the details.  I bumped into a not for profit whose mission was to serve the disabled.  The organization was receiving a significant number of benefits to provide these services. Amazingly, no one on the survey team could find a single person served with a disability … pretty much a mathematical impossibility.  Of course, we spoke with the CEO.  Silly us, they were providing services to the financially disabled…..themselves.   The entity responsible for giving them those  benefits no longer exists.