For-Profits and Nonprofits – the Differences


St. Paul the Tent-maker

“And God is able to make all grace abound to you, so that having all contentment in all things at all times, you may abound in every good work.” (II Corinthians 9:8)


Every priest at one time or another has heard, “The church is a business, Father, and you are selling a product.” From a secular point of view, using vocabulary that possibly might be offensive to the priest, the business-oriented individual is making a point, though a coarse one.

Regular misunderstandings and even conflict occurs within parishes due to a failure to appreciate the differences between the business environment and the church environment, between an organization motivated by profit and an organization motivated by mission fulfillment.

A priest may have little business experience and is challenged to understand the point of view of business professionals on the parish council who favor cost-cutting and efficiency when it comes to balancing the budget. Conversely, business professionals who have little experience with nonprofits may have difficulty understanding why the priest wants to expand services, programs and staffing to help more people when the budget is already running slight deficits.

The comparisons and contrasts below are by no means perfect or exclusionary. For example, many elements of church life can be found in business environments where there is a genuine concern for the wellbeing of employees, clients and customers. Business professionals often rightly assert that a more rigorous application of management should be applied to the parish office. Peter Drucker, the famous business management consultant felt that corporations had a good deal to learn from mission-driven nonprofits that embraced the need for authentic accountability.

Yet oftentimes we find business professionals with little or no experience in the nonprofit world who feel that the parish should be run completely like a business. Recently, one very wealthy parishioner, both faithful and of immense good will, was insistent that the parish needed to relocate to become more accessible and visible to present members and to attract new members. His logic was unimpeachable.

However, it wholly escaped his purview that relocating the parish could not be accomplished by executive fiat, as he ran his business, but that a lengthy consensus- building and probable controversy-ridden process would be required because the general parish membership together with the bishop would make this determination, not the single owner/CEO of the business.

The document below is offered as an exercise in parish council education or perhaps as a text to review and discuss with a highly business-oriented individual who struggles to understand the different values as work in the nonprofit parish environment.


Purpose:

Decision-Making:

Main Funding:

Main Staffing:

In house leverage:

Taxes:

Values:

Product:

Net Profits:

Government:

Oversight:

Leadership:

Allegiance:

Adjudication:

Corporate board:

Stakeholders:

Termination:

Business

Profitability

Executive authority

Sales/Service for a fee

Employees

Promotions and salary increases

Pays percentage of profits

Principled capitalism

Goods and services

To owners/investors

Laws and regulations

Government

Hired CEO/Owner

The corporation/self-interest

Courts

Often paid

Shareholders

Proceeds back to investors

Parish

Mission fulfillment

Consensus building

Voluntary contributions

Volunteers

Persuasion and appreciation

Tax-exempt

The Gospel

Changed human being

Poured back into the mission 

Mostly “hands-off”

Bishop

Appointed priest

The Church/God’s interest 

Canon Law

Voluntary parish council

Parish voluntary membership

Distributed to another nonprofit

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