Stop Telling Nonprofits to Act More Like a Business

Jun 17, 2009 | Board Engagement, Collaboration | 4 comments

Recycled Stop Sign by Arlette

I wish someone would stand up at a General Motors or AIG board meeting and say: “You know what guys, we need to act more like a business.” It would be one of those awkward moments where everyone around the table would stare blankly at one another not knowing what to say.

This statement, commonly heard by nonprofits, stinks. It is akin to diagnosing a broken toe by telling the patient she has a fever. All nonprofits must be operationally effective, but this is not what the statement implies. It furthers the perception that if you do not operate with a profit motive you do not understand business. It says: “for-profit expertise trumps nonprofit expertise.” It is one of the greatest barriers to deep collaboration among board and staff members—pitting the knowledgeable business leader against the knowledgeable community worker. Money vs. mission.

We need to smash these stereotypes. Running a non-profit business is different than running a for-profit business; the same way running a food shelf is different than running a theater company. Are there similarities? Of course. When making major strategic decisions do these similarities count? Not really. Board and staff leaders need to learn the business they are in— not just business. This calls for cultivating discussions where progressively more specific questions about the work are asked.

Here are a few questions to get the ball rolling:

• How are the needs of the people we serve changing?

• What are we most passionate about as an organization? How are our passions relevant to the people we serve?

• What are we best at delivering to the people we serve? Is it valuable to them and do they believe we are successful in delivering what we promised?

• What is the source that generates resources for us? For example, is it our relationships or our results? Does it fit with our capabilities and what we are passionate about?

• Are our operational practices aligned with the mission-driven results we seek to create? If not, where do the breaks occur and why?

• What capabilities do we need to develop, hire, or find? Are the existing capabilities we have within our organization positioned in the right areas?

I am big believer in nonprofit business best practices, but I am also big on listening carefully to your organization and letting it teach you what it needs to succeed. The point here is for board and staff leaders to learn the business rather than try to act like one. GM and AIG spent the last few years acting like one and now (hopefully) their learning to be one again.

I can be reached at [email protected]. Thanks to Tweeple @steveames, @TammieJones, @creativecarissa, @padraiclillis, @cic3 and @amyshropshire for challenging my thinking on this topic.

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