Not-for-profit enterprise will be at the heart of the global economy by 2050. This is the compelling vision outlined in How on Earth, based on a growing body of evidence that the world is shifting toward an ‘economics of enough’. Providing a groundbreaking exploration of how a global economy can flourish in a not-for-profit world, the authors develop a viable model for a new triple bottom line—people, planet, not-for-profit—that embodies the evolution we have been waiting for.
From construction and manufacturing, through to software development, food catering and retail, the not-for-profit ethic is permeating global commerce. Not-for-profit entities increasingly generate their own income, rather than relying on philanthropy. Cooperatives, community interest companies, government-owned corporations, social businesses and social enterprises all show how reinvesting, rather than privatizing their profits, is the healthiest and most sustainable way to manage a business.
In fact, many not-for-profit (NFP) enterprises are now outperforming their for-profit counterparts - connected to a process described by economic theorist Jeremy Rifkin as ‘the eclipse of capitalism’. In the U.S., for example, credit unions offer their 96 million members consistently higher returns on deposits, lower loan rates and, since the beginning of the 2008 financial crisis, have increased their total assets by 30%, compared to a 6.5% increase by for-profit banks during the same period. Indeed, not-for-profit entities have marked advantages in terms of finance, human resources, productivity, innovation, governance, value creation and market reputation.
The rise of NFP business provides the first real opportunity to address the dual crises of our time. Financial inequality, as shown in economist Thomas Piketty’s recent work, is an inherent tendency of capitalism. The emerging, global NFP economy embodies a post-capitalist market with the redistribution of wealth central to its operation. Ecological devastation is inherent in any growth-dependent economy on a planet with biophysical limits. By changing the nature of incentive in business, the NFP model enables true ecological sensitivity and stewardship.
Combined with the rise of crowdfunding, collaborative consumption, open source peer-to-peer production, distributed manufacturing, and relocalization, NFP enterprise offers a path to a vibrant post-growth economy. The emerging NFP economy encourages a truly efficient market that builds on existing community strengths and resources. In prioritizing human need, rather than greed, the NFP world economy will reduce overall resource consumption, incorporate ecological and social costs, and require less taxation and government bureaucracy in the process.
The ingredients for global flourishing exist. How on Earth presents a simple yet powerful recipe for the transition to a thriving ‘economics of enough’ that works for all of humanity.