The Great Debate - By Louise Baxter & Ben Vasilou

There are many confronting and challenging questions across philanthropy. None of them have easy answers and all of them demand considered and measured responses. In this Philanthropy Weekly, we launch a new regular feature that aims to ventilate some of those issues by inviting people from the sector to provide their different perspectives. We are calling it The Great Debate and we start with a topic that provokes some strong opinions – is it Not for profit or For purpose? Louise Baxter, CEO of the Starlight Children’s Foundation, and Ben Vasilou, CEO of Youth Projects, explain why they take different views on the question. Not for profit? Or for purpose?

Not Not, but FOR

- By Louise Baxter, CEO Starlight Children’s Foundation

When I go to watch my favourite sporting codes… I am not “not for the opposition”. I am 100% FOR my team.
I have a natural leaning towards positivity, opportunity, innovation, and growth.
I don’t really operate or speak in terms of “what I’m not”.
I am for diversity and inclusion.
I am for technology enabling more of the human. 
I am for equity.
I am for the Swans wink

This is why I feel the language “Not For Profit” is out of step.

I also feel there is a tone in this phrase which suggests we don’t care about profit … or maybe, are not capable of operating in an efficient way to deliver profit.  

Anyone can run an inefficient, unprofitable business.  However, in our sector, we are guardians of the donor dollar, and we strive every day to maximise profits and to be as efficient, effective, and sustainable as we possibly can.  We do this because we are driven by purpose and impact. We do this so those causes we support can deliver the biggest impact they possibly can. So, we can all contribute to changing the world and changing lives.

The need for our sector has never been greater. We fill the gaps our governments are unable to fill. We support those who are vulnerable, in need and do not have a voice.

Therefore, the need for us to grow our impact requires us to invest, grow and drive our profits.

Strong governance and compliance is absolutely critical in our sector and this requires strong Board support. Financial performance is a key metric for Boards to measure. The right Board members recognise for any organisation in our sector to grow our impact, we must grow how much we must spend on impact. And how much we have to spend on our impact comes from our profit.  

So why are we not describing ourselves as what we’re for… instead of what we are not? A name which potentially has the main objective of differentiating us for tax purposes. 

While this debate is not something I lose sleep over, it is something I’d like to see change. I always say, “Profit for purpose” and I’m equally comfortable with Profit for impact or dropping the Profit and saying FOR PURPOSE.  In my experience, this can be provocative, and it begs a question. Once explained people overwhelmingly agree it makes a difference.

So, if we all can use this language maybe we can start a movement!  Through the power of words we might actually be able to change this and to be known for something we really are, rather than what we are not.  We are For Purpose, we are For Impact. And we need to be efficient in growing our impact. 

This movement could drive a much-needed mindset shift in how we are seen and how we see ourselves.

So, for me it is “Not Not, But FOR”

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Not-for-profit is our purpose, our intent

- By Ben Vasiliou, CEO Youth Projects

Today, words are scrutinised like never before. We’re re-defining our language, our brands, all the time. But along the way, are we unintentionally re-defining who we are? Are we disguising our true purpose? “Not for Profit” can mean “For Purpose”, but “For Purpose” does not mean “Not For Profit”.

What do these terms really mean – especially to the people they affect most?

Charities must do more than break even; how else could we survive? Our point of difference is that NFP’s must re-invest any profits back into community support. Nobody scoops cream off the top for themselves. The beneficiaries are our clients.

So, I asked them, our clients: should NFPs be renamed “For Purpose”? They unanimously preferred NFP because it makes them feel safe, like no one is making money out of them. Jenny, 46, homeless: “For Purpose? What the hell does that mean? I like Non-Profits. You know they care about you, not the bloody cash.”

Then I asked our corporate donors. They told me they wouldn’t know how to differentiate “For Purpose” organisation. But they instantly know NFPs: “Non-Profit is easier for me to get the company to donate. I don’t think they’d like donating to ‘For Purpose’. Where does the money go?”

Not one single client, or donor, wanted change.

Change is good, but for what purpose? The push to re-name NFPs is primarily driven by social-language theory and corporate perspectives. Rebranding to “For Purpose” could mean…well, anything! Our NFP badge might not express our viability needs, but it’s better than being lumped in with profit-making machines that label themselves “For purpose”, or even “Social Enterprise”. Organisations with websites promoting “giving”, “donations”, “purpose” and “impact”, yet they get the money. They are not charities, and they are not not-for-profit.

The term “not-for-profit” is our purpose, our intent. We are driven by cause and impact and couple this with sustainable business practices. But the most important word here is “not”, meaning we are not driven by profit.

Some people view NFPs as low-class! But we are what we radiate. Aren’t you proud of NFP’s? If you’re not, or you’re struggling to cut through this noisy, crowded space, re-branding won’t get you there. Data, stories and impact will. 

NFPs should stand proud. We employ 1.3 million Australians and are responsible for 8.5% of GDP. We’re down on the streets, saving and changing lives. This is not about semantics. This is about our why. We are proudly, not for profit.

Feb. 10, 2022

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