Sustainability challenges demand new organizational models

Anthony Roy is the director of policy and business development for Earth Advantage Institute.

Anthony Roy is the director of policy and business development for Earth Advantage Institute.

For much of our country’s modern history, our understanding of organizational structures was one of duality: for-profit or nonprofit.

In this binary world, for-profit entities were perceived — and public companies were mandated — to have a single-minded focus on income with little more than lip service paid to broader societal needs. Nonprofits, on the other hand, were seen as purely having socially beneficial missions, while eschewing activities that could be viewed as market-driven.

The last decade has seen the gradual fading of these distinctions.

There is an ever-growing understanding that solving social or environmental issues through purely corporate, governmental or philanthropic approaches must give way to more hybridized models. There is a clear trend in which the nonprofit sector is aspiring to be less dependent on donations and grants while for-profit firms are facing increased public pressure to address societal initiatives — and they are increasingly realizing revenue potential for doing so.

The organization I work for, Earth Advantage Institute, a nonprofit based in Portland, is also embracing a more hybridized structure. We take a significant step forward in this regard by spinning off a for-profit entity. Our goal is to provide a dependable future revenue stream back to our nonprofit.

This new entity, called CakeSystems, sells energy software developed within the nonprofit. Earth Advantage Institute’s business model is to continue to incubate new ideas and products that address environmental problems within our nonprofit framework while providing a pathway for those innovations to grow and thrive in a market-driven world.

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