Making visible the public benefit economy - New Report
March 16th, 2009 by Lynn Eakin
Gradually, I have come to believe that we require our own language and a new way of approaching the nonprofit and charitable sector if we are to meet its challenges. The new language that I believe we need would have profound implications for how we think not just about organizations serving the public good but also about our interactions in the world.
In my paper, I suggest that the nonprofit sector is part of what I am calling a public benefit economy that operates in our communities on principles that are fundamentally different from those of commerce. I also make the case that we need to pay much more attention to this economy because it is central to our ability to tackle the challenges facing our planet.
It took me some time before I dared to suggest that something that does not operate on private enterprise principles can be a legitimate economy in its own right. The private commercial business model has been so dominant in our culture that I tended to think of the word “economy” only in those terms.
I now understand better some of the organizational conflict we currently see between for-profit enterprise and nonprofit organizations. There are certain fields – hospitals, prisons, schools, daycares, nursing homes, and other human services – in which we have had longstanding debates over who does the better job. The debate festers unresolved because we as a society have muddy thinking. We have not clearly recognized the fundamental differences between “commerce for profit” and “public benefit for the public good.” Too often we act as if they were interchangeable. Increasingly, I do not believe that this is so.
I now believe that we need to formulate a more congruent coexistence and better relationships between the two economies. But to accomplish this, we need a much better understanding of their operations, particularly those of the public benefit economy, which has received so much less study and attention.
If the sector continues to let itself be evaluated and judged as a private business venture, it is at risk of losing what makes it most precious. We desperately need the passion, commitment, collaboration, generosity, and determined perseverance of the public benefit economy to face the challenges ahead. We need to take a fresh look at how we can best support, value, and grow the contribution that the public benefit economy makes to global well being.
Lynn - a very well presented arguement and one that rings true given my own experience. I was especially struck by the way you dealt with organizations continuing to provide services in spite of declining resources - a situation in which any for profit organization would have suspended the operation.
I believe there is an additional complexity - when the money (service contract) requires you to carry out your services in a manner that is contrary to the agency’s values. Do you continue to serve your clientele despite having to follow rules set not by your board but by the govenrment? My personal experience was with services for at-risk young girls - did we continue to provide our services when the ministry insisted on having the girls transferred to our halfway house in handcuffs or requiring our staff to report as AWOL girls who snuck out to the 7/11 for smokes. The private sector economic model said yes since it was a lucrative contract - the public benefit model said maybe since it did in part respond to a public good. However as an agency we ultimately said no thanks - doing a job in the manner that did respect our principles was not worth the money. Was it the ‘right’ decision? I’m still not sure but I do know that the community did not have to do the government’s ‘dirty’ work and the agency was able to return to a ethical position and advocated for better conditions and services for these young girls.
Thanks for the article - I’ve shared it with many colleagues.
Hi Lynn,
Thanks for stimulating my thinking (as you always do) by shifting the frame.
I think this is just the type of topic that generative boards of directors need to be debating in the board room.
Your point about creating our own language is both a political and strategic move. Otherwise we do look like substandard for-profit organizations. All the signs are pointing to a greater blurring of the boundaries between the nonprofit, for-profit and public sectors.
I’m wondering whether we need to put our heads together on what we define/measure as success - that is meaningful to the public benefit economy (no mean feat). You did touch on some possibilities in your article (e.g. mission results, inclusion, mass collaboration, civic engagement). Will this resonate with many?
This ecomomic crisis is too important to waste. Let’s see what influence some refreshed thinking can provide.
Count me in if you’re going to be discussing these ideas with others.
Well done! Ruth
[...] feedback I received to my initial article has helped me move my thinking along. Following up on my article that developed the concept of a public benefit economy I am now calling for a rebalancing of the [...]