We tend to think of commercial enterprises as the only organizations that need to be making a profit. In reality profit is a measure of performance and therefore has a much bigger social context. To a nonprofit corporation or public funded charity, profit should be a gauge of whether or not they achieved what we intended.  The determination of success in both the for-profit and not-for-profit world is whether the organization achieved its stated purpose. 

Nonprofit corporations come in a variety of shapes and sizes. Some are so well run they receive national recognition while others barely get by. Regardless, every one of them and the people they employ must continuously improve (become profitable) or risk losing our patronage.

Attracting and retaining volunteers

The factor I find most disturbing is that far too many nonprofits are mired in a dysfunctional way of looking at how board members and staff should interact. It is not uncommon for the same handful of “movers and shakers” to serve on and intentionally control a dozen or more local nonprofit boards. The kind of dissent and mistrust this creates ultimately causes the turn out of poor products and services. 

A charitable institution that is free of internal dissent and suspicion is more likely to attract earnest volunteers who willing contribute their time, talent and treasure. Conversely, one that is fraught with personality conflicts and power struggles will ultimately drive away good staff and potential volunteers. 

Ensuring the nonprofit corporations in your region become profitable is in the best interest of everyone, not just the ones who work in these organizations. 

When a nonprofit is fully functional, employees have greater job satisfaction and better opportunities for advancement.  Management and staff are far more likely to receive benefits from an organization that is generating surplus income than from one that is continuously in the red.  In addition, a nonprofit that is profitable provides a far more amicable workplace where employees and volunteers have reasons to rejoice in their accomplishments.  

Working in the not-for-profit sector can actually be fun and exciting when everyone understands what the goals are and how they are contributing to them.  Additionally, there is less stress simply because there is less friction.  The more confidence there is that all departments are performing well, the more self-assurance, openness and trust there is to go around.  

Similar issues and challenges

What I have found time and again is that the organizational issues that come up for profit and nonprofit corporations are the same and that they both need to be run the same way.  The only things that are really different are the accounting processes and the tax laws.

The challenge is clear: we must upgrade the way our nonprofit corporations perform so that they are functioning at the highest potential. 

Given the nature of a the current economy, there is likely to be more pressure put on nonprofit corporations to be responsive to the increasing social needs in your community. Those of us in leadership roles will be expected to create new ways of pulling disparate interests together to form collaborative alliances. 

Collaboration is the key

To improve the profitability of the public service sector we must hold up a mirror so staff, volunteers and board members can see, perhaps for the first time, the kind of organization they don’t want to be a part of.  Once this happens, it will be easier for them to move from being merely self-focused to becoming enlightened participants, conscious of the need to think and act collaboratively. 

Surveys by major charitable foundations confirm the need for community-based nonprofits to collaborate with similar organizations on a local, regional and national level. A growing number of civic leaders are pioneering the effort to move intentionally in that direction.

They could use your help. But, before you look for a board to join or challenge the board(s) you’re serving on now, arm yourself with a few key questions such as, “Is this organization getting better?  Are management and staff finding ways to use fewer resources and less time to provide a better product or service to those who need it?” Do board members recognize and avoid conflicts of interest? 

Additional questions are posted on the New Tithing Group website www.newtithing.org. If you want to stir up some excitement, copy these questions and pass them around at the next board meeting. A few people will object to the implication something is wrong, but the resulting discussion is bound to be revealing and worthwhile for everyone.