And the non-profits shall inherit the earth

The difference between a for-profit organisation and a not-for-profit organisation is simple, obvious and profound. For-profits have owners for which they generate profits, while not-for-profits have stakeholders for which they accomplish their aims. However, both can have customers that they service, both can have products they sell, and both are able to raise money. They can also compete with each other.

For example, the Guardian Media Group is owned by the Scott Trust (no relation), and runs a number of media businesses in the UK, including The Guardian newspaper. It competes against mainstream newspapers in the UK, and does reasonably well, despite not being controlled by owners or shareholders.

There is also the John Lewis Partnership, which runs a number of retail businesses in the UK, including the Waitrose chain of 187 supermarkets. And also the engineering and manufacturing company Scott Bader that operates all around the world, but is effectively owned by the employees rather than shareholders. (US based employee-owned companies are tracked here, while UK based companies are tracked here.)

Many for-profit companies, competing against such non-profits, are at a competitive disadvantage: they have to pay a proportion of their earnings to people outside of the company, rather than reinvesting it in the business or the employees. Owners are effectively an overhead that returns nothing to the business. Of course, not all businesses have owners that are leeches – many famous and successful companies never paid dividends to their shareholders.

Berkshire Hathaway, run by Warren Buffett, doesn’t pay dividends. Luckily the growth in the value of BRK shares more than makes up for that. Also, Microsoft didn’t pay dividends until 2003, after many years of stellar growth in MSFT stock.

However, most companies are not like those. Many companies pay out between a third and half their annual profits in dividends. Not-for-profits do not face this burden, giving up the potential funding source of raising money from sharemarkets, but in return enabling them to set lower prices, given the same cost base, product quality and service levels as their competitors.

This suggests that not-for-profits, while potentially more constrained in terms of the money they can raise, can outcompete the for-profits in their own markets. In Australia, not-for-profits have tended to operate charitable businesses rather than commercial ones, but I wonder if we’ll see more and more of them appear in the future, given their advantageous competitive position.

Sour Cream, Orange and Raisin Pie Recipe

Sour cream, orange and raisin pieThis is a recipe from the most recent Donna Hay Magazine (issue 38). This is not the first recipe to leap out at you, but I’m here to tell you that it’s worth it. It’s not very sweet, and the combination of ingredients is not particularly common. It’s awesomely yum.


1 cup plain flour (for pastry)
1/2 cup caster sugar (for pastry)
1/8 teaspoon baking powder (for pastry)
100g softened, unsalted butter (for pastry)
1 tablespoon of water (for pastry)
1/2 teaspoon vanilla extract (for pastry)
1 1/4 cups raisins (remove all stems)
2/3 cup orange juice
1 tablespoon orange rind (equivalent to 1 small orange)
2/3 cup caster sugar
1 tablespoon plain flour
2 eggs
1 cup sour cream


Firstly, we need to make the pastry, so be aware you’ll need about 30-40 mins for this before the real cooking starts.

Sift flour, sugar and baking powder into a mixing bowl. Cut the butter into very small pieces and mix into the dry ingredients with your fingers using a clicking motion. Or just do it all in a food processor. It should form a bread-crumb consistency.

Add the water and vanilla extract, and mix through. It should now stick together form a smooth, dough ball.

Cover in cling-wrap, and place in the fridge for 30 minutes. Go away and make yourself a cup of coffee, or watch an episode of Scrubs.

Preheat oven to 160 degrees.

Grate the orange rind. Remove the pastry from the fridge to let it soften a little (especially if you’ve left it for more than 30 minutes like I did).

Warm raisins and orange juice together in a small saucepan over low heat for about five minutes. Raisins will soften. Then add the orange rind, caster sugar and flour. Stir to combine, and cook for another five minutes until the mixture thickens a little. Remove from stove.

Blend sour cream with the eggs in a bowl, and then stir in the orange mixture.

Roll out the pastry. Grease a 24cm shallow pie tin, and line it with the pastry. Place the pie base on a baking tray, and pout the filling mixture into the base (do not overfill).

Bake for about 40-45 minutes or until cooked through. Serves 6-8.