No Margin, No Mission

The ethical imperative to make a profit

Midjourney/prompt: "A watercolor-style image that directly relates to the themes in the essay, featuring a peaceful monastery with a modern twist to represent the intersection of traditional values and contemporary challenges. The monastery should be surrounded by a bustling marketplace..."

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When I was in my late twenties, I fantasized about joining a monastery. Learning more about the monks changed how I think about business.

I had just left my first startup, and I was exhausted. Even though we’d had a small exit, I only had a year of runway to figure out what to do next. Monastic life seemed like a hack for solving the money problem. I imagined spending days meditating, reading the classics, and engaging in communal life—without the pressures of capitalism and rent in New York City.

At the time, a friend of mine was doing a nine-month retreat at Blue Cliff Monastery, a Buddhist center in upstate New York in the tradition of Thích Nhất Hạnh. I visited him for a few days and ended up chatting with one of the older monks about money.

He told me that the monastery was going through financial difficulties. Thích Nhất Hạnh had suffered a stroke in 2014. Up to that point, Hạnh had done yearly teaching tours in the U.S. that brought in donations and new members. Thích Nhất Hạnh also had a calligraphy practice, and his art was sold online and at the monastery to people who came for short stays.

These had been significant drivers of revenue, and after Thích Nhất Hạnh's stroke—well, the numbers didn't quite work the same. A small group of monks and nuns was attempting to solve the problem, and had brought in consultants to help with fundraising and create a roadmap for financial sustainability that relied less on Thích Nhất Hạnh (he finally passed away in 2022).

It turns out that even in a monastery, someone needs to take fiscal responsibility. Monasteries still exist within a capitalist society and need a solid enough financial model to make sure their monastics have food to eat, a place to sleep, and access to healthcare.

This was the first time I realized that there was no escape from the money problem. To do meaningful work in the world, you have to care about margin as much as you care about mission. This realization set me off on a journey to understand how businesses can achieve both profitability and impact.

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Learning to take money seriously

When I started Hacker Paradise—a travel company for digital nomads—it was because I wanted to see the world, meet new people, and work on side projects. And while it largely enabled me to do that, it also taught me a lesson on the importance of margin and revenue.

As a business operating in the real world, we dealt with logistics in a dozen different countries, had high variable costs, and encountered emergencies like landslides and coups. Even as we grew 50-100% year over year, our costs and operational complexity grew as well. It often felt like we were running hard just to stay in place.

During my travels, I got to know the founders of social media app Buffer, whom I met at a 2015 conference in Berlin. As the leaders of one of the first remote companies, they were also freely traveling the world. But on top of that, they were experimenting with some crazy ideas, from transparent salaries to getting rid of all managers.

It seemed like a more fun, creative way to build a business. But at Hacker Paradise, we didn't have the breathing room to try any of these experiments; we were busy trying to keep our heads above water. Since Buffer had software margins and was so freaking profitable, they were able to take greater risks to create a unique company culture.

Similarly, many of the innovative management experiments I admired—like Google's 20% time and Github's flat management structure—were only possible because those companies had core businesses that printed money. They were able to break the mold operationally because their fundamentals were so strong.

Margin as ethical imperative

For many founders, sales and cash flow aren't the fun parts of the business. As a result, they focus on product while underpricing their services and ignoring unit economics. This problem is even more pronounced in mission-driven organizations.

But you can do good in the world while still charging a premium. My favorite example of this is the Trappists, a monastic order in the Christian tradition that runs small businesses to support its monasteries. Historically, Trappist monks would make cheese or brew beer—though one monastery in Wisconsin built a multi-million-dollar printing business in the late 2000s.

One might think that monks with a vow of poverty would sell their products cheaply. However, in a study examining the business practices of a modern Trappist monastery in France, the Abbey of Tamié, researchers found that the monks actually sold their cheese at a premium to other products on the market.

This price point allows them to procure high-quality ingredients, paying nearly double the national average for milk. From the study:

“Each year on January 1, Friar Nathanael renegotiates the contract with each of the same 11 farmers. The contract stipulates the price of the milk and the quality, including the level of microbes and the fat and protein content levels of the milk. 

The milk for which the monk negotiates is, in the case of Tamié, more than a commodity; it is rather a product of particular distinction necessary to the identity of the cheese. Tamié (cheese) made with any other milk would not be Tamié.”

Charging a premium has enabled them to create an artisanal brand that is well-known in the region for its caliber, to focus on quality, and to fairly compensate vendors and employees. And it’s good business—in the year of the study, they did over 1.3 million euros in revenue.

Even in a mission-driven organization, you have an ethical imperative to find and protect your margin. It's the only way to build an organization that sustains over time and does business in a values-aligned way.

Balancing pragmatism and values

The phrase "No margin, no mission" was coined in the mid-1900s by Sister Irene Kraus, a Catholic nun who became president of a network of more than 80 nonprofit hospitals. As the leader of this organization, she extolled the benefits of fiscal responsibility in healthcare. In her eyes, a threat to a hospital’s financial health was also a threat to its core mission.

Nowadays, "No margin, no mission" is a rallying cry used to justify substantial profits in healthcare. For example, a recent report found multiple non-profit hospitals that paid their CEOs over $10 million while only spending 1-3% of their annual revenue on charity care (free or discounted care for those who can’t afford insurance).

It can be hard to stay connected to a higher mission in the face of the concrete realities of money. Even if we'd like margin to be in service of mission, it’s easy for profit to lead us away from what we care about.

This is why I often advise founders to create minimum specs around what matters to them in their business. This could be the type of customer you want to serve, the culture you want to create, the values you want to espouse in your work, or the specific outcome you want to see in the world. If you start to compromise these, you need to ask yourself some hard questions about where the business is going.

Sometimes, this means shutting down the company. Lavabit, an encrypted email provider, chose this path in 2013. When the FBI served the founders with an overly broad subpoena that would have given the government access to all user data, they chose to close Lavabit’s doors rather than betray their principles around the right to privacy. 

At other times, this may mean adjusting your mission to meet the realities of the market. The OpenAI team did so when they decided to transition from a nonprofit to a “capped profit” company. They needed more capital than they could raise philanthropically, so they created a new hybrid legal structure that allowed them to raise for-profit capital and compensate employees with equity.

And while it may seem easier to optimize for just one of the two—margin or mission—both are necessary to do work that really matters. If you sit with the tension long enough, there’s often a creative path forward that allows you to optimize for both. In the words of Ray Dalio:

“When faced with the choice between two things you need that are seemingly at odds, go slowly to figure out how you can have as much of both as possible. There is almost always a good path that you just haven't figured out yet, so look for it until you find it rather than settle for the choice that is then apparent to you.”

Ultimately, it is not an either-or proposition. By striking a balance between profit and purpose, you can build a sustainable, values-driven business that makes a positive impact on the world.

Casey Rosengren is a founder and executive coach based in New York. If you’d like to learn more about coaching, drop him a note.

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Beth Adele Long 7 months ago

Fantastic post -- thank you for framing the ethical parameters so clearly but not stopping there. The practical recommendations at the end are relevant to projects I have going and were tremendously helpful.

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