Felix Salmon wrote last March in Reuters about Larry Page’s interest in giving his friend Elon Musk $1 billion rather than giving that sort of money to a charity. Why? Because Musk’s aspirations weren’t just a company, but functionally were philanthropical. Free solar energy? Autonomous vehicles making the roads safer while recovering millions of hours of human productivity? Creating a permanent human settlement on Mars? Those are for-profit missions that surpass any nonprofit mission.
Yet Musk is a singular figure, and the trust that his friendship with Page brings must be central to Page’s confidence that his $1 billion would have far more limited impact in the non-profit realm. It would, compared to Musk.
Let’s assume, though, that in almost every case a major donor could achieve better aggregate results for humanity through for-profit investing or outright gifts to visionary leaders. What purpose could nonprofits serve in that scenario?
I think their purpose would be to continue identifying critical social challenges and raising the social consciousness of their communities to acknowledge and address those issues.
For-profit companies need profit before they can afford to adopt credible social perspectives. The social perspective of nonprofits are adopted prior to their first balance sheet, and donors and earned income result from the adoption of a mission that stirs the social consciousness.
There will always be unpopular but necessary civic, social, moral, and ethical causes that require champions, and nonprofits are corporate vehicles that we protect from taxation because we understand that the power to tax is also the power to destroy.
These unique corporate vehicles won’t get us to Mars or develop sustainable energy, but they can help ensure we remain socially consciousness people with the means to ensure that our technologically brighter future remains a socially enlightened future.