In the November 13, 2006 New York Times, the article What's Wrong With Profit? highlights a new breed of "philanthropreneurs" who are creating profit-making ventures that also serve the greater good. For example, Richard Branson investing $3 billion to develop greener fuels, Steve Case investing in FlexCar (more people sharing, instead of owning, cars means less waste and pollution), or Pierre Omidyar investing in micorlending in the developing world. (did anyone notice that there are no women in the Times article?)
If a for-profit venture gets the job done and makes a profit for investors, I'm all for that. If it works for the clients - the people being served - or generally makes life better, than it shouldn't matter if it's a non-profit or a for-profit delivering the services.
But what about the question of accountability? Let's take the greener fuels example. What if the business that is created to develop greener fuels makes a profit for the investors, but the fuels are not really greener or are of low quality? What if the fuel innovations are fantastic, but the company doesn't make any money? In traditional philanthropy, the non-profit organizations are accountable to both their clients and their funders - if the tutoring program is failing, the funders will pull the plug and/or the clients will stop showing up. What if one of these ventures is failing - will the investors pull the plug on a venture that is earning profits but not "doing good"?