‘So, if you run a non-profit, does it mean you can’t run activities to generate revenue,’ someone with a business background asked me. And here I was, explaining how non-profit status has nothing to do with income generation, but how you share the spoils. No return on capital, but talent can be rewarded. You cannot offer dividends. You can pay salaries, even bonuses. You can develop commercial activities.
I’ve run a non-profit for the last five years, and developed a keen interest in the philosophical underpinnings of company structures. Accounting, or the art of categorizing assets. Governance, or the art of collective decision-making. Incentive systems, or the art of eliciting and sustaining activities that benefit the group.
As I learnt more, I realised how ignorant I was – indeed most of us are – about companies, how they run, what they are. How imprecise our use of words. Income, profit, revenue, benefit, trade, hover together in a golden cloud, while charities and nonprofits merge in mysterious shade. And by effect of sheer confusion, the non-profit sector itself may begin to question: if there is no profit, how can there be value?