Publications
Publications
- May–June 2023
- Harvard Business Review
Should Your Start-up Be For-profit or Nonprofit?: A Guide for Social Entrepreneurs
By: Cait Brumme and Brian Trelstad
Abstract
Years ago the line between nonprofit and for-profit enterprises was clear, but that has changed. Nonprofits now offer products that compete with those of the best for-profits, and for-profits can deliver as much social value as charities. Despite the blurred distinction, all mission-driven start-ups will eventually face a stark choice about which legal structure to adopt, and they need to make it carefully, because it’s hard to undo, say the authors, the CEO of a nonprofit accelerator and a partner in an impact investing fund.
To guide their decision, social entrepreneurs should examine several questions: Is the market ready for a for-profit solution? Where is the available capital? And which structure would help the organization attract the talent and resources that it requires?
To guide their decision, social entrepreneurs should examine several questions: Is the market ready for a for-profit solution? Where is the available capital? And which structure would help the organization attract the talent and resources that it requires?
Keywords
Business Startups; Social Entrepreneurship; Mission and Purpose; Nonprofit Organizations; For-Profit Firms; Decision Choices and Conditions
Citation
Brumme, Cait, and Brian Trelstad. "Should Your Start-up Be For-profit or Nonprofit? A Guide for Social Entrepreneurs." Harvard Business Review 101, no. 3 (May–June 2023): 136–145.