Why does the hybrid nonprofit model work?

Do you want to help solve the problem of homelessness?

Do you want to help provide affordable housing?

Do you want to help people get jobs?

Do you want to give families access to affordable childcare?

Are you thinking of starting a hybrid nonprofit?

Here are some lessons from Bernard Glassman, founder of Greyston Bakery and the Greyston Family Inn, a for profit venture with a foundation arm.

There are two extreme views: The for-profit business view that thinks only about money, and the not-for-profit business view that thinks business is dirty. But by not including profits in their bottom line, not-for-profit social activists actually end up weaning people away from self-sufficiency. And by not including community development in the bottom line, for profit businesspeople weaken both their own workers and their customers.

The future for both business and social welfare organizations, I feel, lies in a synergistic approach that makes use of both for-profit and not-for-profit approaches.

“We wanted a program that included all aspects needed for self-sufficiency. We needed programs that included permanent affordable housing, preschool child care, after school youth programs, job training, education, meaningful jobs, enrichment, and counseling, that’s all! In theory at least, all of this is provided by our social welfare system. But it is often provided in a fragmented way that tends to lead to higher costs and bureaucratic inefficiencies.

There are many well meaning and dedicated men and women in the various agencies and bureaucracies that provide social services. But many are trapped by the rigid structures of their organizations, as well as by competitiveness among bureaucracies for funding and status. Only a few are able to look at the whole picture. When we tried to put together a program that integrated all the necessary aspects, we found that nobody wanted to fund it because it was too “risky”! It depended on too many different agencies!

The Greyston Bakery is a for-profit business that has the social mission of a nonprofit service organization. That mission determines its location in the inner city, its emphasis on entry-level job creation, and its strategy of not automating faster than workers can move up to higher-skilled jobs, as well as self-managing work teams and an overall environment of support, respect and friendliness. In turn, the bakery’s commitment to inner city development has magnetized customers who share strong social values, and this has led to increased business for the bakery.

The other side is that because the baker is a for profit business, turning a profit is a top priority. As measured by Dun & Bradstreets’ 1993 summary of production bakeries, the Greyston Bakery was in the upper 30 percent regarding both return on sales and assets. The profit motive encourages the long-term growth and survival of the organization, and this in turn keeps the social mission viable. There are many nonprofits that do job training, and do a good job of it. but they’re depended on outside funding support and consequently can be forced to downsize or go out of business in spite of their good work.

Combining the approaches of a nonprofit and a for profit business joins the virtues of social benefit with the strengths of self-sufficiency.

Cooking a business

In cooking a business, we have to find a way for each part of the organization to maintain its separate integrity, its taste, while making sure that it works well with all of the other ingredients.

This is quite difficult to do, because its natural for each part to develop its own ego and move away from the others. As soon as we start weaving a net of communication, the pieces start coming apart. But we can’t catch as many fish in a small net as we can in a big one, so we have to find a way to keep the pieces together.

This means that every moment things are trying to split apart. I want to be separate from you. I want my group to be better than yours, or my division to do better than yours. I want this organization to succeed more than that one.

The organizing principle, what keeps us coming back together, is the living, dynamic interplay between spirituality and livelihood.

The Greyston bakery provides jobs for homeless families housed in the Greyston Family Inn. The Greyston family in creates housing and childcare for bakery workers. Both the bakery and the inn provide job training and life skills counseling. And the Greyston Builders create both housing for Greyston Family Inn and jobs for minority construction workers who live in the building.

At the same time, we are trying to create an environment conducive to spiritual growth and transformation not by advocating specific spiritual practices, but simply by creating an atmosphere where non-duality and the interdependency of life can be directly experienced.

-Bernie Glassman and Rick Fields, Instructions to the Cook, A Zen Master’s Lessons in Living a Life that Matters.