PROFIT VS NON-PROFIT IN TACKLING EDUCATIONAL DISADVANTAGE

Since becoming a fellow of Year Here in March 2014, I've been scaling a steep learning curve in order to understand educational disadvantage and all of its causes, effects and catastrophes whilst on my frontline placement - an academy school in South London. The ascent reached new heights last week when I attended a debate questioning the advantages of profit vs. non-profit in tackling educational disadvantage, held by the Innovation Unit at Teach First.

Honestly, I needed someone to explain the ideas behind the debate several times. It seemed like common sense – surely profit equals money, which equals quality, growth and sustainability? In UnLtd's latest report Pushing Boundaries, I interpreted it as fact: “If you have more flexibility on the making money side, and can make the organisation sustainable financially, you can make more money and create more change”.

But the panel, including Brett Wigdortz (founder and CEO of Teach First) and Tom Ravenscroft (founder and MD of Enabling Enterprise) were keen to argue that profit should not be a driving motive behind the organisations trying to tackle the problems behind educational disadvantage. Indeed, Teach First is an exemplary successful organisation, now well known outside of its own social and educational circles. This, combined with the statistic that 10% of teachers in low-income schools in London will be Teach First ambassadors or participants already having reached over a million primary and secondary students, make it difficult to argue with the impact they are making.

When you look at the great scale of impact, it's matched by the scale of funding, with £19 million of income from grants and contributions in 2013. Teach First has a number of friends – something that, along with collaborating, Brett argues is easier to do as a NFP – as well as generous supporters with deep pockets and a big social interest, including the Department of Education and the Prince of Wales. Not that I mean to imply that it's always been this easy to for Teach First, Brett took the executive decision to decline a great deal of funding as it meant growing at a scale he couldn't maintain, as well as entering the territory of being beholden to the wishes of a large donor pushing the company forward at a pace he felt was unsustainable.

Making money isn't the driver behind their success, and members of the audience were keen to point out the questions is never “what's going to maximise profit” but “what will change the world?” in the realm of start-ups. So if the motive isn't profiteering but maximising educational progression in whatever form this must be in – whether it is through better quality infrastructure, resources or staff, undeniably these things cost money.

So, back to basics, not-for-profits still need money in order to pay for service costs, resources, wages – the service isn't provided for free and so funding needs to come from somewhere. From impact investments to grants and loans, applying for funding as a non-profit start-up is a lengthy process that needs to be carried out intermittently and often, and not always successfully. Organisations with great social potential are limited in their potential for growth and development because they're dependant on unreliable external funding.

Some advantages of generating your own profit are being able to use income as a measure for success and impact. Furthermore being constrained by money controls the experience and (existing and development of) skills of the people you employ, and the ability you have to grow, sustain and innovate the organisation, which impedes the people you can reach and the social impact you have. Jan of EmergeLab made the key point that the amount of innovation in the profit-motivated sector is far greater than that in the charitable sector, for example tech entrepreneurs choosing to invest nigh on $500 million worth of their skills in the field.

Ultimately, the motive that closes the gap of educational disadvantage and maximises progression for children in education is the quality and reliability of the service provided. In my opinion, if this means profit is necessary, then making money also needs to be a key target for the organisation providing the service.

As always - thoughts and suggestions are welcome - please feel free to comment below.