It is no secret that leaders of non-profit organizations feel an overwhelming pressure to “be more entrepreneurial” in a fast-changing and increasingly competitive world.
Yet, the notion of “chasing dollars” stirs up deep anxieties. At best, non-profits search desperately to find the capacity and expertise needed to research, evaluate and pursue a new ventures. At worst, non-profits worry that the pursuit of $ opportunity necessarily undermines its sacred commitment to mission.
How do we NOT feel trapped between the rock of fundraising and the hard place of sustainability as we balance two competing roles: to be a “prophet” – that is, to lead from a position of vision, and to pursue “profit” – that is, to lead from a position of value.
Today’s non-profit organizations are challenged to not only pursue both but to integrate them into a cohesive and workable whole.
In the spirit of the subject, I’m tempted to throw “Thou Shalt” in front of these – but I claim no divine inspiration for this and Cecil B. DeMille could hardly have created an epic out of something so basic as what I offer as THE THREE SUGGESTIONS to integrate Prophet & Profit:
- Primacy of MISSION – While an organization’s mission IS its foremost priority, it is vital to be open to changing the tactics (even radically) which pursue it.
- Consensus of PURPOSE – Tapping the expertise & goodwill of stakeholders, staff and constituents is the unique strength of every non-profit organization. The presence of strong and deep roots is the necessary foundation for continually striving to achieve great heights.
- Viability of PLAN – Orienting and adjusting to the needs of a fluid and fast-changing environment is every company’s greatest challenge. It should also be its greatest opportunity.
A non-profit organization that can conceive of only one way to pursue its mission will neither live long nor prosper.
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I am struggling to understand the point of this article.
Of course one’s mission is primary. Even more primary is the reason you are given nonprofit status- to serve the public good, thru your mission.
Of course you want input and buy-in from your stakeholders, your customers, your board. This is not unique to nonprofits. That is best practice for any successful corporation. Ignore your market, your customers or your owners/board at your own peril.
Of course the changing environment is both your greatest challenge and your greatest opportunity. That, again, is business 101. The world is filled with examples of those who have failed to adapt and those who have been prescient enough to stay ahead of the curve.
What are you really talking about here?
Being a nonprofit gives an organization certain advantages (tax deductions, access to certain funding sources), given to them because they are organized for the greater good, not organized simply to make money. Yet, despite that noble goal, many nonprofit organizations are under capitalized, lack basic business acumen, and are unable to adapt and subsequently, perform poorly.
How is that allowed to happen?
The true fact is that many nonprofits in the past have been given a pass in terms of best practices. They have been given this pass not from the market, but from their charitable sources of income. Sources of contributed income will often have different motivations for giving to the organization. They may love the mission, but don’t pay attention to the fact that the organization is woefully incompetent. Or they have their own demands that interfere with the organizations ability to operate at a sustainable level. (How many of us have applied for a grant for a program or activity, not because it was mission focused, but because it brought us critical cash flow even if it didn’t advance our goals? Or because the funder, ‘really wanted us to do it”).
Charitable foundations are required to give away a certain minimum portion of their net assets (5% annually). But they are under no legal obligation to fund smart competitive organizations. They can, within their own guidelines, give to anyone. And they often do.
No one group is at fault here, but the elephant in the room is the funders. Nonprofit organizations are constantly criticized by funders for their lack of planning, and their inability to implement effective and sustainable programs. But God help the organization brave enough to turn that criticism back onto the funders and their convoluted demands, their shifting priorities, their obsession on the new at the expense of ‘boring’ but effective and sustainable ongoing programming.
Perhaps the real problem is not the nonprofit business model, but the tax status, accountability and business model of the nonprofit foundation community.
I’m very grateful for your blunt & detailed reply to my post.
What AM I talking about here?
Well, the story behind the story is that I’ve spent the past month (or, arguably, the past two years) trying to work through precisely the issues you just named. The 501c3 non-profit service organization that I founded over 8 years ago – Alliance for Audience (www.AllianceforAudience.org) is going through a painful (but necessary) process akin to changing out the engine of an airplane while it is in flight. Dramatic changes in the economy, altered philanthropic priorities, progress in technology & social media and even the compilation of our own experiences have brought us to a point where either we will make very substantial changes to the way we operate – or decide to call it quits.
And all of that has me thinking a lot about what is the MOST important aspect of what we do – the pursuit of our audience development mission – or the achievement of a sustainable business model.
I’ve often thought “Mission” & “Money” as opposite sides of the same coin. Yin & Yang. But viewing them as opposites isn’t terribly helpful when it presents the conclusion that one exists at the expense of the other.
Today’s post was an effort to integrate these thoughts; to suggest a methodology for how “Mission” and “Money” embrace each other rather than “balance” each other as competitors.
I’m sorry that the thought came across as vague. It is still somewhat a thought-in-process.
It may very well be, as you suggest, that our situation (and that of many non-profit organizations) is affected by tax status, funder priorities and/or other “external” factors beyond our control. I haven’t arrived that the conclusion that the game is “fixed” and that we can’t win. (Although, if that occurs, I promise to write about it here on AUDIENCE WANTED.)
For now, I’m focused entirely on aligning our mission with a new & sustainable business model.
Again – thanks for your post!
Matt
I’ve been involved over the past 39 years with several 501 c 3 arts organizations as founder,/Treasurer or as an non-founder Treasurer, and have never allowed grants to be the primary source of income. I’ve always required that the market participants and audience generated more than half of income – that primacy kept the organizations’ focus where it needed to be – to serve the artists and art consumers. If we began failing to serve those two groups, those two groups would fail to fund us.
I’ve recently gotten involved with several more non profits and 501 c 3 organizations at the Board level – only one of which is an arts organization. This discussion reinforces my conviction to make the equivalent changes in these organizations’ revenue structures or resign my newly secured positions with them.
I have no idea how I’ll do this at the moment.
Thank you.
At the end of the day, not for profits can be profitable and some in the past have been well capitalized too!
Yes, the Mission of any company is paramount and this drives the company in its mandate(s).
Financially, we all have to live within some kind of sustainability and on this issue not for profits are no different than for profits.
Where it gets kind of grey, or not black and white if you will, is when we, (Managers, Staff, Boards of Directors), do not know when to say, STOP, and this means all of us, to reassess our situation vis a vis our Mission and our mandate(s).
I think, and I have experienced, not for profit cultural institutions that are generating a profit in certain sectors of the activities, and, then turning around and bankrupting the Mission and mandate(s) with reckless lack of oversight in other activities.
Result a net (loss) and eating up of whatever capital; on the road to undercapitalization.
But most of all – what I experienced, and got exasperated by was the lack of the main plan of this cultural institution – an Artistic Plan. (My goodness this institution had Marketing, PR, Fundraising and Sponsorship plans up the whaaazooo! And based on what? Absolutely nothing, and no concrete Artistic Plan.)
About chasing the $$$$ – “t’is a reality” – now all you need to do is the plan and make it sustainable.