Why we are for profit
There are currently 600,000 Non-for-profit organisations in Australia alone. Of these 57,000 are ‘economically significant’ NFPs which have an active tax role. The NFP sector in Australia has an economic output equivalent to that of Tasmania, one of our nation’s states. There are clearly already enough NFP’s operating in Australia and adding to this insanely high number was not our intent at the outset or for our endstate. As a start point we aren’t necessarily good at raising donor money and didn’t particularly like the psychology that goes with rattling a tin cup in people’s faces (metaphorically speaking).
Being a NFP though doesn’t solve, what we feel, is one of the greatest misperceptions of our time- that creating social impact and creating wealth, in an ecological way, are mutually exclusive.
“In your 20’s you can afford to be a socialist but in your 30’s you have to be a capitalist.”
The predominant metric that consumers use to judge the success of a NFP is ‘what percentage of the dollar you donate goes to the cause’ which has nothing to do with the impact but regardless it is the metric that has a huge amount of acceptance in Western culture. This metric, and it’s religious following by NFP’s, places a natural pressure on the incomes that can be paid to employees who chose to work in socially related roles. Proof of this lies in the ATO providing charity tax concessions to employees who work for a registered tax concession charity for which the value of these is $31,177 per annum. The reason the ATO provides this tax cut is because of the lower incomes NFP’s can afford.
The real impact on social outcomes evident in NFPs of paying less income to their employees is the drop off from the industry that occurs when employees reach their 30’s. Throughout their 20’s people are happy to earn less income in order to fulfill the NFP’s vision as they have less financial commitments or are willing to put them on hold for personal work fulfillment. Upon reaching their 30’s though most people start a family and their priorities shift with these family commitments which are as wide ranging as children’s schooling and purchasing a home (a difficult task even on a private sector income in places like Sydney). What is evident then is that as employees start to become the most productive in their roles at the age of 30 they then leave to work in the private sector. This obviously has a negative effect on the important social outcome the NFP seeks to achieve.
If nothing changes then nothing changes and we at Project Everest seek social impact in accordance with our Social Enterprise definition and are proudly for-profit. This is simple because we believe the two outcomes of creating social impact and creating wealth in an ecological way are NOT mutually exclusive. In taking on this bold new path we want to encourage a generation of millennials to purposefully consider a ‘life’s work’ in the space of social enterprise by servicing the 4 billion that live on less than $5 per day. Many graduates are looking for roles in investment banks, defence contractors and pharmaceutical companies whose incentives are dubious at best however they pay exceptional incomes. Owning successful scale businesses can produce comparable or greater incomes for this same generation over the same time frame. We seek to be the example to follow in that your life’s work can encompass both social outcomes and achievement of personal wealth in a manner supportive to all stakeholders.