Is this Name Changer a Game Changer? For Purpose vs. Nonprofit

Can an ordinary person create extraordinary change? According to Adam Braun in his bestseller, The Promise of a Pencil: How an Ordinary Person Can Create Extraordinary Change, the answer is a decided “yes”.  Each chapter in this book highlights one clear step that every person can take to turn their highest ambitions into reality and make their life a story worth telling.

Why start a nonprofit in our capitalistic society? Braun had a “lightning moment” as he describes what changed the course of his life. That moment in time led to his writing this purpose guidebook and to his founding the Pencils of Promise Foundation in 2008 at age 25, leaving behind a promising career at a top investment firm.

Braun proposes that the terms “for-purpose” and “profitable purpose,” be used to describe nonprofits and for-profit corporations respectively.  He goes on to explain that the term nonprofit is a misnomer giving the wrong impression to would-be donors and participants.

One of Braun’s (and his organization’s) most deeply held conviction is: “every child should have access to quality education”. This conviction was shaped while he was attending a Semester at Sea program as a junior, in college. As he traveled Adam asked other young people what they wanted most in life. While docked in India, he saw a young boy begging on the streets and stopped to ask the boy what he wanted the most, and this little boy said, “A pencil!.” Braun then reached into his backpack and gave him a pencil of his own. This small act of generosity could have been forgotten. Instead, this moment propelled Adam to action and changed the trajectory of his life.

From an initial $25 of his own money, Pencils of Promise grew beyond just providing pencils, to build over 489 schools around the world: The foundation’s programs are currently educating over 95,873 students.

And what sets Pencils of Promise apart from other nonprofit organizations? They promise “100% for purpose”, “100% direct giving,” and “100% operational integrity”, (and) “100% transparency.” Pencils of Promise is guided by this “revolutionary” “for-purpose” approach.  “Blend the head of a for-profit business with the heart of a humanitarian nonprofit, we rigorously measure the return on investment of every donor dollar we spend. Joy and passion are great, but results are what we’re all about.”

Donors can never truly be sure of where their money is going. By covering their operational costs through private donors, events and companies, 100% of every dollar donated online can go directly into programs to educate children.

According to their website: “We don’t just build a school and move on, we monitor and evaluate every project we undertake. We have a proactive process to ensure every school we open is educating students.”

One of the drawbacks of the term “nonprofit” (a legal tax designation) is that it can creates a misconception surrounding purpose and revenue. “Nonprofits” actually need to make a profit or they cease to exist, just like for-profit companies except it’s usually a longer, slower, more drawn out and painful death.

In addition, while thinking like a “nonprofit,” many organizations fail to emphasize good business practices. They consider the idea of being profitable as somehow being morally wrong. All “profits” can go to funding the work the organization is doing and for their operating expenses, and to keeping the organization operating “in the black.” When good business practices aren’t a priority, the nonprofit will eventually implode.

Braun conceptualized a new way of looking at “for-purpose” organizations. He built a huge following by proposing that 501C3s not use the term “nonprofit,” but instead adopt a positive, affirming term that focuses on what’s really important.

The following lead statement is from the Forbes article entitled, A New Nonprofit Model: Meet The Charitable Startups:

Startup companies are traditionally for-profit enterprises, but in recent years philanthropic ventures have begun adopting the technological know-how and scrappy mentality of startups to develop a new breed of lean nonprofits.

Adam Braun, founder of Pencils of Promise refers to Pencils of Promise as a “for-purpose organization” rather than nonprofit. He insists they remain focused on the bottom line – instead of gross profit, its “gross efficacy.” Braun believes that nonprofits can learn from big business.

Braun said, “Across both startups and the not-for-profit sector, people are driven by intense passion around purpose and mission – they are there because they believe the company is doing something that wasn’t there before.”

“Entrepreneurs have a ludicrously large vision to change the world but have the humility to be solving very clear pain points,” agreed Ted Gonder, founder of Moneythink, a nonprofit which teaches financial literacy to inner city students. “All these things are also true of nonprofits.” …

“Startups test new innovations and are always evolving – I think that that’s really, really important for any organization.”

So, if you lead, work or volunteer for a nonprofit, maybe it’s time to change the way you think about your operational model. Maybe it’s time to start learning from startup businesses, big corporations, and perhaps partnering with for-profit organizations in more ways than simply asking for donations?

In founding Pencils of Promise Braun adopted the term “For Purpose,” and the idea that in some ways, all companies should be “for purpose” corporations as well.   What’s the purpose of your organization or business?

Whether you choose to adopt Braun’s term or come up with another entirely, isn’t purpose the real focus of your organization or institution? Let’s focus on what we are, not what we’re not.

About the Author: Staff writer for GrantWatch.


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