Evaluating Corporate & Non-Profit Goals

Is there any difference between ethically evaluating a corporation’s goals, on one hand, and a non-profit organization’s goals on the other hand? That is, should our standard of evaluation of similar goals be different, for different kinds of organizations?

Today’s posting is loosely linked to the following recent press release:

Harvard University and Not-for-Profit, Diagnostics-For-All, Partner to Introduce Innovative, Low-Cost Diagnostic Technology in the Developing World

Harvard University and Diagnostics-For-All, Inc., (DFA) have entered into an agreement aimed at developing a new generation of portable, low-cost, user-friendly diagnostic solutions and make this technology accessible to patients and healthcare providers in the developing world.
DFA is a not-for-profit diagnostic device company launched to develop a low-cost, paper-based “lab-on-a-chip,” a simple and flexible diagnostic device that can be used in resource-poor areas of the globe to support public health. The DFA took top honors at Harvard Business School’s 12th Annual Business Plan contest in April and at the 2008 MIT $100K Entrepreneurship Competition in May.

It’s a nice story about a genuinely nifty-sounding technology, one that seems likely to do a lot of good. But it made me think about the goals of non-profit organizations more generally, and how we evaluate them. Here are some initial thoughts:

A firm’s pursuit of particular goals is in effect licensed by three factors. First is the consistency of those goals with society’s standards (so, e.g., your firm can’t have as its goal the promotion of child pornography, because that’s outside the limits set by society). Second is the firm’s being situated within a free-market economy, one within which the choice of what products and services to produce is left up to corporate managers, guided by consumer demand. Third is the obligation -– again part of the capitalist system -– to attempt to make a profit for shareholders. I think those are roughly the grounds upon which to assess whether a firm’s goals are reasonable.

An non-profit organization doesn’t play the same social role that a business firm does, and so its goals are not subject to precisely the same standards of evaluation. Thus, for example, the fact that the factors listed above warrant a particular firm’s goal of promoting, say, the clinical use of genetic testing (and hence sales of its own genetic test products) does not immediately imply that an non-profit organization would be warranted in promoting genetic testing: increased genetic testing (say, for population screening) might not be warranted by evidence, and an non-profit with a health-promotion mandate ought only promote health technologies that are established to be genuinely effective and efficient.

[Note: I realize the Harvard story above is not about genetic testing per se, but my own example mentions GT because it is more controversial.]

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