For-profit or Non-profit?

As I work with the media and think about the future of NATIVE(X), the non-profit vs. for-profit discussion continues to pop-up. I’m not alone as many other socially minded entrepreneurs receive the “why aren’t you a non-profit” question too. When I incorporated NATIVE(X) last year, registering NATIVE(X) as anything other than for-profit didn’t occur to me. In hindsight, I should have at least assessed the non-profit route given the nature of NATIVE(X)’s social mission. However, for-profit turned out to be the best choice because:

Design not Donation

  • I want customers to spend their hard earned dollars at N(X) out of pure admiration for Native design. A side benefit of the purchase is that it supports artists and their communities. Being a non-profit takes the focus away from the design and places it on donating to or helping a group of people. Neither I nor the artists want that.

Competition is good

  • Competing with other fashion brand makes N(X) better. In order to survive, we have to produce amazing collaborations, nothing less.

However, for-profit comes with a capitalistic stigma that can hamper any social business’s momentum. A system of checks and balances ensure that the financial ambitions don’t outstrip the social vision. This is what we’re doing at NATIVE(X):

Taking transparency to a new level

  • Our transparency goals include publishing detailed annual reports with a clear breakdown of where money was spent and invested. Did all stakeholders receive their fair share? Were the right investments made to further the concept? Where did we make mistakes?

Business survival depends on the Native community’s support

  • N(X) grew out of conversations with Native community members and without their continued support, N(X) would fail. Thats the beauty of social media. It empowers groups of people to vote with their collective voice.


What do you think about the for-profit vs non-profit debate?


On a side note, if you are deciding between starting a social business or a non profit, read Richard Dare’s Huffington Post Article.

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