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1 March, 2011 / Karl Maier

Save the World by making Profits

NGO (Non-Government Organizations) make great headlines about helping the poor and improving the world.

Meanwhile, traditional, for-profit companies are often cast as cold, greedy or exploitative entities.

However, the situation may not be so simple. Let’s look at the sub-parts of the activities in a for-profit enterprise:

  • Customers pay less for the service than the value they receive, thus they get a great bargain.
  • Employees get paid to do their work and take care of their personal needs.
  • The company brings in more than the cost of the service or product provided (make a profit), thus they have money to reinvest and grow.
  • Investors get a better return than they could otherwise get for risking their money, thus they are getting value.
  • All of these agreements are voluntary and all the parties are happier for doing them.

By contrast, an NGO requires funding from donations from some source.  To the extent that they receive donations from individuals that contribute their money voluntarily, then the situation is the same as a for-profit enterprise.  However, when the funds to support an NGO (or a for-profit company for that matter) come from taxes, then that is not a voluntary activity and is not sustainable.

So pick a noble goal, lead your company and make a profit with pride because you are adding value and saving the world at the same time.

Later you can take your profits and give it to any NGO you would like!

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