Friday, December 14, 2012

Social Change Favors For-Profit Businesses Over Non-Profit ...

Figures in a lineOne of the commonly shared passion?s of today?s Gen Yers is social change. Given this dedication to change, there might be expectations for a wave of Gen Y-owned non-profits. Yet new research shows that non-profits may not be the best means to achieve social change. For-profits, it turns out, can be more stable, which is critical for sustainable social change.

The passion for social change amongst Gen Y is clear:

  • According to a 2011 study by Walden University and Harris Interactive, 81% of Millennials made donations to promote positive social change.
  • Figures from the Social Change Impact Report show 70% of Gen Yers have educated others about a cause or issue, while 68% volunteered.
  • A Pew Research report reveals 22% of Gen Yers believe a career that benefits society is tremendously important, compared to just 14% of adults over the age of 35.

To channel this passion, Founder and President of Ventureneer Geri Stengel warns against investing in non-profits:

[The] first choice when starting a company to create a social impact should be a for-profit business [because] revenue streams are more reliable, and there are more dollars available (both debt and equity) for starting and growing.

And even though non-profits have the advantage of receiving grants and contributions, winning those funds is time and resource intensive. Additionally, non-profits must form a board of directors and adhere to their state?s non-profit regulations.

An easier path for Gen Yers eager to commit their careers to social change is to start a specially-designated for-profit, such as:

  • B Corporations
  • L3Cs, or ?low-profit? corporations
  • A traditional corporation, which can then provide the financial support for a foundation dedicated to social change

Source:?Why Starting A Non-Profit To Create Social Change Is A Bad Idea

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Tagged: entrepreneurship, for-profits, generation-y, leadershihp, non-profits, social change

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