What is the difference between a nonprofit and a for-profit organization?

It is a deceptively straightforward question... but before responding with the obvious answer, consider the following.

• Regardless of tax status, all businesses need money—regularly, consistently, usually in increasing quantities over their lives.

• Both nonprofits and for-profits will often provide goods or services in exchange for that money, whether through an entertainment-centered fundraiser, or through providing entertainment media.

• Both want desperately to retain whoever gives them money and encourage donations again in the future.

• Both live or die by convincing people—groups, other organizations, individuals, etc.—to give them money, through marketing.

Ultimately, the difference is that nonprofits don't keep whatever is left over; for-profit companies try to maximize the leftovers to distribute among owners.

Given all that they have in common, then crafting a successful nonprofit business strategy should end up looking an awful lot like crafting a for-profit business strategy, incorporating...

  • Well-defined goals with a clear, unifying mission
  • An honest, critical self-assessment
  • A set of tools, measures, and standards for conducting future/ongoing assessments
  • Identifying and understanding the competition
  • A target audience or market from whom to solicit business/contributions
  • A quality marketing strategy, which integrates and supports all the foundational elements of the overall business plan

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Edgar Wilson is a freelance writer and marketing consultant, splitting his time between his home in the Pacific Northwest and New England.

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