Transcript Differences Between Non Profit & Profit Organization

Differences Between Non Profit &
Profit Organization
• Difference between For Profit and Non Profit
organizations can be divided into two categories:
• 1. Core Dimensions
• 2. Amplifying Dimensions
Core Dimensions
• 1. Social Dimensions
• “The Primary objective of a social enterprise is
to maintain or improve social conditions in a
way that goes beyond financial benefits created
for the organization's funders”.
Social Objectives (Continued)
• Major Objectives of NGO are as follows:
• 1. Reduce conditions with socially undesirable side
effects (Crime, Disease and Pollution Etc.)
• 2. Provide goods and service with socially desirable side
effects (education and Health Etc.)
• 3. Create a safety net for the less fortunate and those in
temporary distress .
• 4. Promote a more just distribution of benefits & Burden.
• 5. Advance Human rights
2. Social Method
• Non-pecuniary: Based on Non-monetary
Motivations of workers and donors.
• Affiliative: Not a deal based relationship,
continuous evolution of relationships.
• Altruistic: Giving other preference over yourself.
• Communal: Working for the whole Community
and not individual benefits.
Amplifying Dimensions
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Sacrifice of financial return to funders
Social Motivation of work force
Below-Cost pricing to consumers
Governance as mission-guided stewardship
Sacrifice of financial return to funders
• In NGOs the Donors do not expect financial
returns.
• The financial altruism is an evidence of
organizational priorities.
• Non profit cannot, by law, distribute economic
return to the principals.
• Principals contribute for social objectives.
Social Motivation of work force
• Workers are motivated by the social mission of
the organization.
• Volunteers is the clearest example of nonpecuniary rewards.
Below-Cost pricing to consumers
• Targeted consumers are unable to pay.
• Targeted consumers are unwilling to pay.
• Producers are unable to collect payments in any
practical way.
• Charging full (or even partial ) cost is considered
inappropriate.
• Full-cost pricing would result in a sociallyunacceptable distribution.
Governance as mission-guided
stewardship