Should most technology that provides global scale benefit be provided through a "non-profit" organization?

Are non-profit organizations more ethical than for-profit organizations?

Do non-profits do a better job of maximizing the potential of technology for doing good in the world, than for-profits?

Why are some service offerings best suited to non-profit organizations?

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Case A: Cure for the Purple Plague in Perlivia

Let's say you uncovered a cure for a deadly malady "the purple plague" most prevalent in (fictional) third-world country Perlivia. Hundreds of thousands of victims die every year, mostly children, some with children they leave orphaned, mostly from families living below poverty level income.

The "users" most directly benefited by your technology are unable to pay for the services they need. Life and death is at stake; the opportunity for children to grow up unscarred is at stake, and the lifetime potential of these Perlivians to do good in the world is in jeopardy at best.

Individual philanthropists who may give you the money to distribute your cure - gain a dual benefit by giving you the money - only if your organization is structured as a non-profit. They do not have to pay taxes on the money they give you - and they can feel good about helping people less fortunate.

Corporations who may give you money to distribute your cure can use their involvement as a PR benefit, perhaps gaining customers by having people know they give money to some good causes.

Can you obtain sufficient revenue from those most directly benefited, to do an excellent job of getting this technology to the most people in the world who can use it?

Is it appropriate in this case to ask others (governments, private donors, corporate foundations) who don't directly benefit, to pay for those who do?

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Case B: Theft-proof Ink Pens

You've come up with a modification to ink pens that (magically) prevents them from leaving the area they were purchased for. The technology only works for writing instruments. It will add 1 cent to the manufacturing cost and have no impact on other costs associated with distribution of the product.

Both individuals and corporations use ink pens. So do non-profit organizations. However, of the billion (you can find out the real pen market size here: 2003-2008 World Outlook for Fountain Pens) ink pens bought per year, only a small number are mis-appropriated from private homes. For-profit corporations suffer the largest ink-pen-misappropriation cost. Non-profit organizations also "lose" ink pens - but dollar figure of the loss is orders of magnitude smaller than the loss to for-profit corporations.

Is the "user" who benefits most from your innovation able to pay for the enhanced product?

Corporations are losing a box of 12 pens for every pen that stays in the office for its useful life. Market tests show that corporations will gladly pay 12 cents more per pen - seeing the ROI on that decision as instant and worth many times the investment.

Manufacturers and distributors split 10.975 cents per pen - and your Magic Stayput R&D Lab gets 1/4th of one cent per 10 pens if you operate as a for profit. Several large knock-off pen makers also duplicate your innovation and pay you nothing. The knock-offs assume a 95% market position.

You find yourself smiling understandingly as you and your team cheer the creation of Magic Stay-Put R&D Lab's Sunbake waffler. The 1.2 million in annual revenue you get from the pen industry has allowed you to employ a fine set of ethical innovators and supply test equipment for making more products that make people's lives better.

Another option would be to form Magic Stay-Put R&D Lab as a non-profit. You could ask individuals to give to this good cause - whose primary direct benefitor is for-profit corporations who would lose fewer pens to employee theft. Or you could ask the ink pen industry to support your lab, perhaps with an annual membership at various sponsorship levels depending on size. Or you could ask the for-profit corporations (who will save through the use of your pen modification) to support your work with a sponsorship or membership annually. Or perhaps seek a government grant - the government is losing pens to employee theft too - and maybe law enforcement would be interested or counter-intelligence for possible applications in laser pens.

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Primary goal is getting the technology to the places it can do the most good.

Some services and products are primarily of use to businesses and organizations who are able to pay and will make money or save money by acquiring these services and products. What are the circumstances under which a non-profit organization is the most efficient way to create, deliver or sustain services that primarily benefit for-profit business?

Clearly if there is no need for "charity" - a charitable non-profit is not the appropriate form. There are not-for-profit industry associations. One purpose they may serve is to show no favoritism to any one company in the industry, and act as a unifying force or buffer for a variety of players in an industry to aggregate or exchange information.

Other services and products will require substantial funding to get them to people or organizations who cannot afford them. Here, a charitable non-profit may be an appropriate form.

In many cases, profit from sales to for-profits can be used to also support getting the technology to those who cannot afford it. The same technology can be sold to for-profits (who gain ROI from the purchase) and also distributed through a non-profit organization to those for whom paying doesn't make sense. Government, foundation, industry sponsorships and private giving can help fund the non-profit arm.