Excerpt:

“…In America, at least, our notions about the evils of profit come from the early Puritan settlers to the nation – people who, ironically, came here desperate to make profits in everything from fur-trading to selling soap and potash.

But there was a problem. The Puritans were also Calvinists – taught to hate themselves – taught that self-interest was a raging sea that was a sure path to eternal damnation. This creates a real problem for these people. They come to the new world to make profit and profit will get you sent immediately, directly, and permanently to hell. What were they to do? So they created two economic worlds where there was only ever one. Charity became this other world – this economic sanctuary where they could do penance for their profit making tendencies. So, of course, how could you make money in charity, if charity was your penance of making money? So the merchants, farmers and carpenters of the world got free market practice and profit, and the needy got this religion, whereby everything that worked in the market was pretty much banished.

And this was called good. This was called charity. this was called morality.

John Winthrop, the first Governor of Massachusetts who led one of the first contingents of ships carrying Puritans to New England, and who had his sights set on handsome profits himself, wrote a famous sermon entitled, “A Model of Christian Charity,” in which he wrote that, “if our heartes shall turne away soe that wee will not obey, but shall be seduced and worship . . . other Gods our pleasures, and proffitts, and [serve] them; . . . wee shall surely perishe out of the good Land whether wee passe over this vast Sea to possesse it.”^[1]

Thus was born the “non-profit” ethic. The word “profit” comes from the Latin noun profectus for “progress” and the verb proficere for “to advance.” So the term “nonprofit” means, literally, non-progress. It is a dangerous unconscious statement of intent, or lack of it. No advance. No progress.

And the sector that has been given this name is the sector charged with addressing the greatest moral issues of our time – hunger, disease, extreme poverty, and the others. We ask the one sector that has been stripped of the power of financial incentive to solve the world’s most urgent problems. It would be like sending the ambulance with the flat tires to the man dying of a heart attack. And, like the Puritans, we call this morality. Morality could not be undermined with more reverence paid to the notion of morality.

And the evidence of the immorality of this paradigm is overwhelming. This system isn’t solving problems. In 1997 UN AIDS estimated that 1.1 million adults and children died of AIDS in the world. Ten years later, despite the introduction of protease inhibitors, that number had doubled to 2.1 million adults and children. In 1997 43,000 American women died of breast cancer. Ten years later, that number hadn’t changed very much. 41,000 American women died of breast cancer in 2007. Poverty has remained stuck at about twelve percent in the U.S. for decades. In 1992 the UN estimated 824 million people malnourished in the world. Ten years later, that number hadn’t changed very much – in 2002 they estimated 820 million people malnourished in the world. And this past Christmas the estimate was upped to 1 billion people malnourished in the world.

This system of no profit isn’t solving social problems. It’s leaving a trail of dead bodies.

The scale of the nonprofit organizations charged with addressing these issues is microscopic compared to the scale of the problems. And without the fuel of financial incentive they can’t attract capital and they can’t achieve anything close to the scale of the emergencies we face.

Since 1970, the number of nonprofits that have crossed the $50 million annual revenue barrier is 144. The number of for-profits that have crossed it is 42,136.^[2]

This is the morality of no profit. These are the effects of stripping away financial incentive. The system works as it is supposed to. A system with no profit was never designed to eradicate social problems. A system with no profit was designed to guarantee their persistence. Winthrop wrote, famously that:

God Almightie in his most holy and wise providence hath soe disposed of the Condicion of mankinde, as in all times some must be rich some poore, some highe and eminent in power and dignitie; others meane and in [sub- mission . . .] soe that the riche and mighty should not eate vpp the poore, nor the poore, and dispised rise vpp against their superiours, and [shake] off their [yoke].^[3]

The Puritans didn’t want social problems to get solved. Their world order depended on the existence of the poor. If there were no poor there would be no opportunity for penance. The Puritans needed penance because they were taught that they were despicable in the eyes of God. John Calvin wrote that:

Original sin, therefore, seems to be a hereditary depravity and corruption of our nature, diffused into all parts of the soul, which first makes us liable to God’s wrath . . . we are so vitiated and perverted in every part of our nature that by this great corruption we stand justly condemned and convicted before God . . . even infants themselves, while they carry their condemnation along with them from the mother’s womb, are guilty not of another’s fault but of their own. For, even though the fruits of their iniquity have not yet come forth, they have the seed enclosed within them. Indeed their whole nature is a seed of sin; hence it can only be hateful and abhorrent to God. . . . For our nature is not only destitute and empty of good, but so fertile and fruitful of every evil that it cannot be idle . . . the whole of man is of himself nothing but concupiscence.^[4]

Belief in the evil of profit is rooted in belief in the evil of mankind.

We can no longer afford the luxury of this self-centered self-hatred. It is the ultimate form of greed to be more concerned with the degree to which we are properly self-sacrificing in our own eyes than on the degree to which we are making progress on stemming the tide of death. This is a new time that calls for new ideas. Love for others will never come from old ideas about hatred of ourselves.

While we wallow in our high-minded rhetoric about the evil of doing anything that smacks of self-interest, or worse, ordain unilaterally that others who want to earn a profit for solving the great social problems should be exiled form the playing field, little kids are dying. If the system were truly moral someone would ask the dying little kids what they think about the issue. It’s revealing that no one ever does. Do we really think it is of some comfort to the mother whose child just died of diarrhea to know that at least no one made a profit in the failed effort to bring clean water to her son?

Mankind is not evil. Ergo a man or a woman’s interest in his or herself is not evil. The truth of our underlying belief in this is revealed in our excitement about micro-financing’s ability to help poor people in developing countries start businesses that will allow them to earn a profit. We hardly expect that once they get a leg up they should give it all back and return to the original state of poverty out of which their own self-interest and a little capital lifted them.

The fact that charity exists at all is a testament to the tenderness of the human soul. On the question of whether or not mankind is basically good, this reality speaks for itself. If we can accept that there is nothing wrong with a man doing some good for himself while he does some good for the world, we will see a lot more good getting done for the world.

This is the morality of profit.

^[2] George Overholser and Sean Stannard-Stockton, “Philanthropic Equity,” January 21, 2009, “Tactical Philanthropy” blog, http://www.tacticalphilanthropy.com/2009/01/philanthropic-equity

^[3] Perry Miller and Thomas H. Johnson, The Puritans: A Sourcebook of Their Writings, Two Volumes Bound as One (Mineola, NY: Dover Publications, Inc., 2001), p. 195.

^[4] John Calvin, Calvin: Institutes of the Christian Religion, 2 vols., ed. John T. McNeill, trans. Ford Lewis Battles (Louisville, KY: Westminister John Knox Press, 1960), pp. 251–252.

The grand prize of $20,000 was awarded to Daniel Pallotta for his submission exploring the role of for-profit practices to meet public challenges. Mr. Pallotta is a leading expert on innovation in the nonprofit sector, founder of Pallotta TeamWorks which invented the multi-day AIDS Rides and Breast Cancer 3-Days, and author of the landmark book, Uncharitable.

The SEVEN Fund would also like to congratulate our second and third prize winners, Bradley Hobbs, a university professor, and Mary Halpine, a Canadian and former president of the World Youth Alliance. Mr. Hobbs’ essay, “My Father’s Drugstore,” is a collection of four vignettes explaining how his father taught him the lessons of morality, integrity, profit, and trust while operating a business in a small town. Ms. Halpine’s essay, “The Wisdom to Learn,” focuses on responsible profit-making, and her experiences of this notion in her travels throughout Nigeria, Rwanda, and other developing nations.

“These three essays represent outstanding examples of the essay form from the more than two thousand submissions,” said Michael Fairbanks, Director of the SEVEN Fund and Editor-in-Chief of the Morality of Profit project. “Dan’s essay was a tour-de-force, sharing his experiences pioneering a new model of social enterprise.  Bradley’s essay was a brilliant example of the personal essay, with a sweetness and level of personal integration that impressed the jury.   Mary’s piece is an excellent account of the experience of a young Westerner working in the developing world.”

In addition to our winners, SEVEN would also like to congratulate four Honorable Mentions: Joshua Ruxin in Rwanda, Paul Schwennesen in the State of Arizona, Nyla Nox in Thailand, and Blake Goud in the State of Oregon.  The winners and honorable mentions will be invited to work with editors to publish their essays in the Morality of Profit book, due out in 2011. The top fifty authors are under consideration for additional slots in the book, together with thought leaders and branded experts in business, entertainment, science, and the academy, and will be notified by the editors later this Fall.

Please check back in the next week for biographies of the winners and honorable mentions, and excerpts of their essays.

We are pleased to announce that Ms. Carol Gutierrez Esguerra’s submission “The Good Story” received an unprecedented number of hits, including 882 Facebook shares and 24 Retweets.  Congratulations to all the participants for generating so much feedback and discussion around the topic of Morality of Profit.

Our main Morality of Profit essay competition is coming to an exciting conclusion. We’re currently finalizing outreach to the winners, which is sometimes a challenge across time zones and continents.  We will make the public announcement of our first, second, and third place winners by Monday, August 16^th at 5:00pm EST.   We will distribute our final press release via email to everyone that participated, and it will be available online at www.sevenfund.org and www.moralityofprofit.com.

Thank you again to everyone who contributed, and we look forward to announcing the winners as well as moving to the next stages of finalizing the manuscript and conference.

Best regards,

Elizabeth Hooper
Executive Director
SEVEN Fund

Given the volume of submissions for the Morality of Profit competition, the finalists will be announced on July 1st, 2010.

This will allow ample time for our judges to thoroughly review each of the 2200 essay submissions. Please check back to our blog for more competition updates, and information about authors who have signed on to be a part of the book!