Several articles and events this month explore the narrow margin between public/nonprofit and private enterprise.
The first is the acquisition of Jumo, the nonprofit social networking service, by GOOD, the for-profit media company. The move had Wired magazine gushing about innovation and success, but had others in the philanthropic world wondering how the many grantors and donors who made Jumo possible were essentially funding a for-profit venture in disguise.
A second news item was the non-profit-to-for-profit conversion of CouchSurfing.org, nudged along by $7.6 million in venture funding. According to the service’s founder and President/CEO, ”the non-profit structure is not ideal in enabling innovation to occur in terms of regulatory oversight and various auditing requirements.” The assumption is that the new “B Corporation” status (a brand of corporate entity that meets social benefit requirements) would allow more innovation and access to more resources. Although, passionate users of the non-profit version of the service are rallying around their discontent.
Finally, a story out of Boston shows the tensions around mixing public assets and private enterprise. The city’s Post Office Square is intended as a public park, but is managed and maintained by a for-profit firm that also runs the parking garage below ground. The article wonders whether the restrictions on the public space implemented by the private enterprise (abundant security cameras, barriers to free speech and free assembly, tight controls on loitering, and such) are consistent with the public trust.
As the public sphere is increasingly constrained by government fiscal challenges and reductions in philanthropic giving, cities and communities will inevitably turn to private enterprise to take the reins. And as the private sector faces an increasingly complex and nuanced marketplace, there may well be more entrepreneurs and investors willing to enter the ‘public trust’ business.
It will be useful, along the way, to remember why we all benefit from robust public and private sectors, even as we rethink who does what.
The whole idea of non-profit needs to be overhauled. Increasingly our institutions reinforce extreme inequality. Minimally, tax free status should only go to organizations that put the majority of their money and effort into serving the bottom half of the income ladder, and pay employees and leadership no more the average wage for a graduate of an open-enrollment public school and university degree-holder. Our “meritocracy” is an illusion: money opens the gates at every checkpoint, and make sure that those who make decisions will make them from the POV of the richly credentialed.
Our local non-profit hospitals are being taken over by corporations. Apparently nobody has standing to sue on behalf of the 1000s of people who over decades donated to those hospitals believing that their donations were charity, not an “asset” to make businessmen rich. Donations of time, blood, services are even more important than mere money: the corporation should be made to return the value of those assets to charity; to the struggling real non-profits who serve the poor and the uninsured.