Maximum Profit and Maximum Impact

Imagine that in your non-profit, you had the opportunity to get an extra $2 that would help you achieve your mission. Are you acting responsibly if you don’t take the $2? Now imagine that you have a chance to receive $2 from 100,000 people. Would your organization be maximizing its impact if you chose to ignore $200,000 that you could be spending towards achieving your mission?

Conversations about maximizing profit can be difficult for a non-profit organization. Non-profit organizations don’t have the mandate of maximum returns for the shareholder. Because of this, organizations can have an insecure feeling that any pursuit that maximizes what they receive as income is a bad thing.

A non-profit organization is intended to create the maximum impact towards a specific mission. Focusing on maximum impact means that if you can maximize your revenue, you can optimize the amount that you spend on getting results.

A Case Study

Let’s pretend that you are an agency that is focused on reducing poverty. As part of your poverty reduction initiatives, you have a cafe that sells coffee in downtown Toronto. Either you can sell coffee for $1 a cup to everyone who comes by, or you can sell coffee at $3 a cup to everyone. If you sell coffee at $1 a cup, you think that you are ensuring that those who cannot afford expensive coffee have a chance to purchase the coffee that they need. But if you sell coffee for $3/cup, you might find that there are other reasons that people might come to your shop. It may be a safe place to stay or have a welcoming atmosphere. If you focus on maximizing your profits, you will have more money to put towards your organization’s mission. Also, for the people who truly cannot afford a $3 coffee, you can find ways to provide them with the discount they need respectfully. (There are many ways to do this that will single people out in the wrong way, so make sure that you take a truly empathetic approach. Don’t draw segregate groups.)

As a non-profit: maximize your profit. And be intentional about how you use your resources to further your mission. Rarely is minimizing profits the most effective way of creating the impact.