Podcast Summary: "Nonprofit vs. For-Profit: Dr. Sharon Elefant's Expert Take"
Podcast Information
- Title: The Journey with Morgan DeBaun
- Host: Morgan DeBaun
- Guest: Dr. Sharon Elefant
- Episode: Nonprofit vs. For-Profit: Dr. Sharon Elefant's Expert Take
- Release Date: January 7, 2025
1. Introduction to the Episode
In this episode of The Journey with Morgan DeBaun, host Morgan DeBaun delves into the nuanced debate between nonprofit and for-profit business structures. Joined by Dr. Sharon Elefant, an expert in nonprofit consultancy, the discussion aims to guide entrepreneurs and change-makers on choosing the right organizational framework to maximize impact and sustainability.
2. Morgan’s Experience with Nonprofits
Morgan begins by sharing her personal journey with Blabby.org, a nonprofit initiative under Blavity Inc. She reflects on her initial reluctance to discuss nonprofits due to her busy schedule but emphasizes the importance of understanding the distinctions between nonprofit and for-profit entities.
Notable Quote:
"Black folk, I need y'all to stop making so many nonprofits."
— Morgan DeBaun [00:00]
3. Introducing Dr. Sharon Elefant
Dr. Sharon Elefant, founder of The Nonprofit Plug, brings extensive experience to the conversation. She manages both a nonprofit and a for-profit foundation, aiding companies and nonprofits in raising over $15 million and managing $5 million in assets. Morgan praises Dr. Sharon’s patience and expertise, highlighting their collaborative dynamic.
Notable Quote:
"I love it."
— Dr. Sharon Elefant [01:48]
4. The Birth of Blabby.org and Shifting to Profitability
Morgan recounts how Blavity Inc. evolved over a decade, initially balancing profit with social impact. She discusses encountering social impact investors who required measurable outcomes, pushing her to formalize Blabby.org as a nonprofit. This shift aimed to streamline operations away from compliance-heavy activities and focus on sustainable impact.
Notable Quote:
"When they kept pushing me, I'm like, well, how are you going to measure it?"
— Morgan DeBaun [04:44]
5. Understanding Nonprofit Versus For-Profit Structures
Dr. Sharon elucidates the fundamental differences between nonprofits and for-profits. She explains that nonprofits cannot have owners or shareholders, emphasizing the importance of board governance and the potential loss of control if not structured correctly. Morgan adds personal insights on governance challenges within nonprofit boards.
Notable Quote:
"In a nonprofit, you do not own your nonprofit. There is no owner of a nonprofit."
— Morgan DeBaun [18:43]
6. Deciding Between Nonprofit and For-Profit
The duo explores criteria for choosing the appropriate structure. Dr. Sharon advises assessing the mission, ownership of intellectual property, and long-term goals. For instance, creating proprietary products or intellectual property leans towards a for-profit model, whereas community-focused services without ownership needs suit nonprofits.
Notable Quote:
"If you have intellectual property that you want to own, that goes under an LLC."
— Dr. Sharon Elefant [17:17]
7. Funding Strategies for Nonprofits
Dr. Sharon outlines various funding avenues, including grants from organizations like NAMI and donor cultivation. She highlights the importance of crafting specific, tangible asks to secure unrestricted funds, which offer greater flexibility for operational needs.
Notable Quote:
"Donor cultivation is going to be your best friend."
— Dr. Sharon Elefant [35:21]
8. The Role of Grants and Their Limitations
Morgan and Dr. Sharon discuss the complexities of grant funding. Morgan shares her hesitation to apply for grants that impose restrictive conditions, emphasizing the importance of aligning funding sources with the nonprofit’s mission and autonomy.
Notable Quote:
"When you apply to a grant, you are applying to that funder's program, not your program."
— Dr. Sharon Elefant [38:51]
9. Governance and Board Dynamics in Nonprofits
The conversation covers the democratic nature of nonprofit boards versus the hierarchical structure of for-profits. Morgan expresses challenges in decision-making within nonprofits, while Dr. Sharon advises careful selection of board members to ensure effective governance.
Notable Quote:
"It's important who you pick to be on your board in the beginning."
— Dr. Sharon Elefant [20:53]
10. Balancing Personal Finances and Nonprofit Operations
Addressing common struggles among nonprofit founders, Morgan and Dr. Sharon advocate for sustainable financial practices. They stress the necessity of paying oneself a reasonable salary to prevent burnout and ensure long-term commitment to the nonprofit's mission.
Notable Quote:
"You have to feed yourself and your family otherwise the community will lose you."
— Dr. Sharon Elefant [46:41]
11. Leveraging Both Nonprofit and For-Profit Entities
Morgan suggests utilizing both nonprofit and for-profit structures to maximize impact and financial stability. By maintaining separate entities, individuals can ensure that their personal endeavors and nonprofit missions complement each other without compromising control or financial well-being.
Notable Quote:
"You can have a very great salary. Nonprofits can be very lucrative."
— Dr. Sharon Elefant [49:17]
12. Final Insights and Call to Action
Morgan wraps up the episode by encouraging listeners to thoughtfully evaluate their organizational choices. She highlights the importance of working smarter, leveraging unique skills, and maintaining financial literacy to sustain both personal and community growth. Dr. Sharon provides resources for further learning and engagement.
Notable Quote:
"You have to create that wealth story and have financial literacy."
— Dr. Sharon Elefant [46:41]
Connecting with Dr. Sharon and The Nonprofit Plug
Listeners interested in learning more can reach out to Dr. Sharon Elefant through:
- Website: thenonprofitplug.com
- Instagram: @thenonprofitplug
- Facebook: The Nonprofit Plug
- Email: info@thenonprofitplug.com
Notable Quote:
"Find out all about the Nonprofit Plug University on the website too."
— Dr. Sharon Elefant [52:23]
Conclusion This episode provides a comprehensive exploration of when to choose a nonprofit versus a for-profit structure, emphasizing the importance of aligning organizational form with mission, ownership desires, and financial sustainability. With expert insights from Dr. Sharon Elefant, Morgan DeBaun equips listeners with the knowledge to make informed decisions that balance impact with practicality.
Additional Resources
- Morgan DeBaun’s Book: Rewrite Your Rules available for pre-order at morgandebond.com
- Follow Morgan: Instagram, LinkedIn, TikTok for updates and community engagement.