Defending Their Turf: Nonprofits Pushing Back Against Social Entrepreneurship

You know an organization, or a sector, is starting to have problems confusing the instinct for self-preservation with advancing their mission when you come across stories like this: “Defining Social Good: Nonprofits Worry About Calif. Bill” in the Chronicle of Philanthropy. Two bills that would give social entrepreneurs more corporate structure options are apparently gaining steam in the California legislature, and the California Association of Nonprofits is worried that more socially-minded business ventures might harm nonprofits.

Sean Stannard-Stockton of Tactical Philanthropy made this point really clearly:

“Some nonprofits worry that a California push to recognize for-profit social businesses will undermine the nonprofit sector. That’s the wrong question. The question should be about maximizing social impact, not protecting specific corporate forms.”

While there may be more to the story (there usually is), I think Sean is dead-on, and I think this conflation of self-perpetuation and mission runs deeper than just a nonprofit association’s reactionary response to legislation that might enable other types of social change organizations to do more social change work. In some ways, this is the same “not knowing when to wrap it up” problem that many nonprofits have. Either they lack a clear endpoint, so self-perpetuation actually becomes hard-wired in the DNA, or when they arrive at the clear endpoint they just come up with a new mission. The result, in either scenario, can be organizational behavior more oriented toward organizational preservation and protection at the expense of the mission or the cause itself.

But this also has hints of the dying-industry problem faced by institutions like the publishing, newspaper, and music industries. Their business models are basically dead, and while they can all milk their legacy networks for a while they are on an inevitable downward slide (if not tailspin). The energetic effort to suppress alternative business models (e.g., newspaper paywalls and the absurdity that is the Denver Post and other newspapers suing bloggers who link to them, record labels suing fans for sharing music) might buy them some time but won’t change the outcome. The smart ones – I think of O’Reilly Media, the Huffington Post, and Pandora as examples – are figuring out very different models, and are poised to thrive in so doing.

I don’t think the nonprofit sector is in any danger of dying, but attacking efforts to widen the range of social change organizational structures sure smells like prioritizing self-protection over enabling social impact. State nonprofit associations ought to be leading the charge in this brave new world, helping everyone make sense of the range of organizational structures for changing the world, maybe even helping to do some of the innovating themselves.