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Romancing the ‘commercial’ paradigm

There appears, from our experience, to be a shift in the not-for-profit community service sector to ‘commercialisation’ of service delivery and care. Not-for-profit organisations are increasingly being exhorted to act more like the ‘corporate sector’ and to think ‘commercially’ when making decisions about their service delivery.

This romance is not all bad. At the same time it is not all good.

Financial rigour, excellent governance, customer focused services, consumer directed care, increased client choice, marketing, project management and efficiency and effectiveness are not negotiable for any organisation, regardless of whether it has shareholders or not.

However the adoption of ‘commercial’ culture and practice should ring bells for us when this dilutes mission and values, and where all transactions are made with a focus on surplus (always bigger and better every year), internal rates of return, and fixed in granite administration levies that stunt innovation and the development of better models of care.

The fact is the two ‘sectors’, that is the for-profit sector and the not-for-profit sector (we will use these terms at present until better ones emerge), are different, and the difference should be acknowledged and wherever possible celebrated.

However when the not-for-profit sector ‘imitates’ the for-profit sector, or executives start to insist that ‘commercial’ models of planning should replace ‘caring’ models of planning, we may find a widening gap between mission and practice – what can be called cognitive dissonance.

When the not-for-profit sector begins to act like the poor cousin to the for-profit sector, we need to remind ourselves that it was not the not-for-profit sector that caused the Global Financial Crisis. It was the greed and ‘commercial’ activity of the for-profit sector all on its own in its unregulated free-market.

The not-for-profit sector makes a huge contribution to society generally and should celebrate what it is and what it does!  It actually has a lot to offer the for-profit sector as a humanising agent in an unequal world.

Commercial principles such as efficiency and financial rigour (that are designed to elicit a profit) are valuable, but only if they’re used to enhance client care and better deliver on mission. Adopting for-profit principles for the sake of being more ‘commercial’ can be detrimental to a not-for-profit’s ability to acheive real social impact.

So rather than blindly attempting to imitate the for-profit sector, a vastly improved approach would be to focus on collaboration where the corporate sector provides resources to assist the not-for-profit sector to specifically enhance the quality of its care in order to achieve its mission. In this relationship, each sector identifies and respects the capability of the other, and the not-for-profit sector retains its focus on what ultimately matters most – the people it exists to support.

If the ‘romance’ ends with a relationship of equals and an increased focus on social impact, then everyone will benefit.


Cassandra George Ramos

This is an excellent article. So many nonprofits here in my city are making this move. At a time when nonprofits are struggling to stay alive, it’s easy to be romanced (an excellent word!) by the possibility of economic stability through a corporate model. Thanks for reminding us of where the problems started in the first place!

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