Tuesday, November 29, 2011

do you use business practices for non-profits?

There are only a few issues that spark my confrontation mode. One is an ongoing debate about the distinction between sport, contest, and competition (Where do cheerleading or competitive eating fall? Sport? Competition?). Two is the mode of operation for non-profits. Having worked in the non-profit sector and in higher education, I have some experience and perspective that influence my thoughts on the issue. That puts my thoughts all over the place. For a more concise and reasoned approach, read this WSJ article: Should Philanthropies Operate Like Businesses?

And my answer is "yes" in most instances. Mimicing business is most useful when developing big-picture approaches - fundraising, marketing, HR, and strategic planning. The answer is "no" in most of the small-picture, details of getting the big picture accomplished.

For the yes:

First, just because someone has a "wild and wacky" idea doesn't make it a good one. Call it a dream or a business plan, you create change when you bust your hump, generate movement, and achieve objectives. Business thrives in a competitive environment so they've developed some effective strategies. No harm in borrowing methods that work - it doesn't tarnish your "non-proft, do-gooder" status....well, unless you borrow some the less worthy methods. Starting a non-profit and getting a participation trophy doesn't rock the world. You need to prove that you're in it to win it.

Second, you're asking people and corporations to give you their money. It is not unreasonable for them to want to know that it is going to be spent with integrity. If they are giving because the cause is dear to their heart (and often people are), they most definitely want to know that their donation is making an impact - you need to be able to demonstrate this with more than anecdotes and that requires more than "Well, we're working for world peace, and it takes time."

Third, you are competing with myriad of good causes and good organizations. While it would be nice to think that everyone who wanted to give could give enough to every organization they wanted to give to, that's not the reality. There are A LOT of options out there. I, for one, do not give to organizations (no matter how wonderful they are) who send me "freebies" in the mail along with their solicitation. Why are you spending my money to make return address stickers? 1 - don't try to manipulate me by making me feel like I should be paying for something I didn't ask for. 2- don't spend money on gimicks - spend money on your mission. When I have hundreds of giving options, I'm not sending money somewhere that I have any questions about their methods or their priorities. Next.

Fourth, again, if you're serious about making change, you need to be hiring competitive staff. There's nothing wrong with having a bleeding heart (figuratively speaking), but that won't fix problems. Go out, get the skills you need, and put them to work. If you can find someone with the passion and the ability, then you're building a competitive, world-changing, organization. "Well, we're a non-profit" is not an answer anyone should ever give to explain why someone is on their staff. Along the HR lines, non-profits should set clear policies (preferably in writing) about hiring/firing, vacation/sick time, and any other issues that may creep up. Being clear in the beginning avoids problems later. Trust me. Promote transparency and accountability.

For the no:

First, in many cases, if not most, you're dealing with a significant shortage of resources - including volunteers - to accomplish really big, really necessary, and really overwhelming objectives. Respect the sacrifice. This means that prioritizing is even more necessary - prioritizing where money goes, what projects continue, to what level of detail a report is written, and to what hour of the evening will staff work to meet numerous deadlines and pressures. Perpetually under-staffed is an understatement (again, for most). It also means that these groups don't have the same capabilities as corporations and some strategies that are effective for efficient business will be disastrous for non-profits. Pick your priorities, decide which strategies are appropriate, and go! It may mean that you spend more time developing email communication or a 2.0 presence instead of snail mail and embossed letterhead. Or the luncheon has rubber chicken instead of filet mignon. The devilish details often need some flexibility or creative thinking. Which leads me to the next point.

Second, and as the article rightly points out, non-profits are tackling much different objectives than "make more money" so room for a little creativity is merited. Creativity in finances is not appropriate, but creativity in problem-solving should be encouraged. And sometimes this means failing. Failure does not mean the whole organization is doomed; it means one approach did not meet its objectives. When a business-like strategic plan is in place, this should not be a problem as there should be other initiatives in place to compensate. Now, it should go without saying that completely botched projects should be few in number and most efforts should demonstrate progressive achievement.

I've rambled through my brain on this one long enough. Your thoughts?

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