For-Profit, Non-Profit or Both: The Funding Gap

Rob Katz — Fri, 21 Mar 2008 15:28:57 -0500

When talking with people inside the "base of the pyramid" (BoP) community, I often hear strong opinions about how BoP ventures should be set up. Some people strongly support registering these ventures as for-profit entities, while others maintain that BoP activities can start out as non-profits and transition into formal businesses later.

There is no one answer, and this is not a straightforward discussion. The legal and financial implications of a for-profit vs. non-profit organization are myriad, and I don't claim to understand them all by any means.

Thankfully, a new article in the Stanford Social Innovation Review explores the tension between for-profit, non-profit and hybrid structures. The Funding Gap (PDF) - written by NextBillion allies Jeff Hammaoui, Eliot Jamison and Michael Chertok - explores the social enterprise capital market and how the BoP community can address recurring legal, financial and funding issues associated with it.

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For-Profit, Non-Profit or Both: The Funding Gap