Why is profit important for social organizations?

LEONARDO LETELIER *

Imagine the following dialog:

- Good morning, what's your name?
– I am non-Marcelo, nice to meet you.

There is clearly something wrong with this conversation: people identify themselves by who they are (for example, Maria Clara), not by who they “are not” (Marcelo, in the previous example). The same thing goes for organizations: Vale is a mining company and not a non-bank. So why do we think it's normal when people refer to “non-profit organizations” rather than “social impact organizations” or simply “social organizations”?

Legally speaking, not even the negative definition is correct: social organizations are “without distribution of results” and not “without profits”. The problem is that this language has relevant impacts on the way we see the social sector; we hope he doesn't make a “profit”, that he spends all the resources at his disposal and doesn't save or invest anything for the future.

But, as in any enterprise, the surplus between income and expenses of the period (the “profit”, in a traditional company) is important to finance the activities of the following period, to allow investments in new ways of generating resources or experimenting with new ones. social impact programs. Without accepting this surplus, or ideally, encouraging the surplus, we are implicitly assuming that what we want is for social organizations to constantly live in a situation of financial stress.

At the end of the day, if we implicitly or explicitly charge organizations that do not have a surplus, but at the same time expect them to be solid, innovative and well managed, we are asking them for the impossible. We shouldn't blame them if they fail to meet that expectation.

*Leonardo Letelier holds a degree in production engineering from USP (University of São Paulo), with an MBA from the Harvard Business School (USA). In addition to being founder, he is executive president of Sitawi-capital, discipline and advice for social impact. With more than ten years of experience in strategic and social consulting, he has also been a consultant at Mckinsey & Company.

http://www1.folha.uol.com.br/empreendedorsocial/colunas/912347-por-que-o-lucro-e-importante-para-as-organizacoes-sociais.shtml

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