by Leigh Goessl

Created on: April 23, 2008   Last Updated: June 17, 2008

Non-profit and for profit businesses are worlds apart in many of their characteristics. This is primarily due to the core goals and the ideology established to meet these goals. For profit businesses have a responsibility to give their shareholders a lucrative return while nonprofits' responsibility is typically rooted in societal progress.

Despite the differences, there are many similarities between nonprofits and for profit businesses. The likenesses are largely attributed to organizational vision, strategic planning, mission statement and to efficiently run those processes which help support these philosophies.

When people hear the term "nonprofit" they sometimes assume there is no money involved and the nonprofits should not be focused on generating revenue. While the nonprofits primary goal is not to reap in profits in order to satisfy stockholders, bringing in revenue for the nonprofit is an important and necessary task.

Nonprofit organizations still have expenses and overhead costs to meet so they can continue to operate and fulfill their mission. They also have individuals and organizations to respond to and demonstrate how they are effectively operating. This is a strong similarity between nonprofits and for profits.

Both types of businesses pursue an organizational vision and engage in strategic planning to pave the road to reach their objectives. Nonprofits and for profits are both very active in developing a focused mission statement and establishing organizational objectives to support their missions. While philosophy may vary somewhat, the steps and procedures outlined are often quite similar.

These steps and procedures involve the development of a strategic marketing and a management plan to get their name out with the goal of bringing higher recognition and awareness to their respective enterprises. Commercialized for profits are aggressive in their attempts to increase recognition, but nonprofits these days are also increasing their efforts to become widely recognized. Both types of organizations use many of the same tools and methodologies to gain awareness and draw attention.

The end rewards for profits and nonprofits are a bit different since for profits are in business to make money and distribute to shareholders; nonprofits more or less support individuals, other organizations or provide a service without any distribution of funds except within the organization itself. Yet despite this fundamental difference, it's interesting to note motivation is also a common link. Members of each kind of business each respond to their company mission with intentions to provide the best productivity by striving to maintain organizational vision and growth.

I used to work for a state university and we were classified as a nonprofit, yet our organization was very active in marketing and aggressively working to increase enrollment. A part of this was to grow and offer more educational programs, but also because the profits received from tuition and other fees helped run the facility; increased enrollment resulted in a better financial return which enabled the college to offer optimum service and continuously increase the levels of service.

Non-profits, much like for profit institutions, need revenue in order to function and succeed in their fundamental mission. Many of the approaches used by both types of businesses to reach these goals are very similar. Once that framework is established, this is where most of the similarities end and the differences between the two kinds of organizations begin to emerge.

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