Business Is Business — Even If It’s “Not for Profit”

In the Frank Capra film “Mr. Deeds Goes to Town”, Gary Cooper plays Longfellow Deeds, a humble small-town man who comes into a fortune. Deeds has aspirations of giving away a large part of his money to charitable causes. But when he moves to the big city, he is stunned to learn that the “patrons of the arts” running the local opera company are resigned to the fact that it’s perpetually losing money. They don’t come right out and say it, but they’ve asked Deeds to be the new Chairman of the Board so he can be the opera’s sugar daddy.

TREASURER: The treasurer reports a deficit of $180,000 for the current year.

DEEDS: A deficit! You mean we’ve lost that much?

MR. DOUGLAS: You see, Mr. Deeds, the opera is not conducted for profit.

DEEDS: Why not?

MR. DOUGLAS: Because it just isn’t a business, that’s all!

DEEDS: Well, maybe it isn’t to you, but it certainly is a business to me, if I have to make up a loss of $180,000. If it’s losing that much money, there must be something wrong. Maybe you charge too much. Maybe you’re selling bad merchandise. Maybe lots of things. I don’t know. You see, I expect to do a lot of good with that money. And I can’t afford to put it into anything that I don’t look into. That’s my decision for the time being, gentlemen. Goodbye, and thank you for making me Chairman.

I’ve had similar experiences to those of Mr. Deeds when dealing with non-profit organizations. There’s this weird feeling that the money isn’t real . . . that the usual business rules don’t apply. If you’re working with a non-profit to do some kind of “good,” the most good you can do is to make it profitable. Don’t spend all your time looking for unsuspecting new benefactors. The best thing you can do is improve the “product.”

[Ed. Note.  Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]