[DDN] I make no profit, therefore I suck

[jc at coyotecommunications.com]

Joe Beckmann wrote:

"In a world where NFP's range from Mass General and Harvard to Mabel's
home-based day care there is an amazing amount of generalization in this
discussion. The pretense of poverty and "free" services is patently absurd
for by far the largest part of the non-profit sector, since profit has
nothing whatsoever to do with pricing."

HERE HERE!! So glad to read this in this sea of emails deriding  
nonprofit management.

Tom Abeles wrote:

> First, the for-profit world does well understand the role of the  
> non-profit organizations.

I could not disagree more. The for-profit world frequently  
misunderstands the work and methodology of nonprofits. They make  
policy decisions such as "We won't fund a nonprofit that spends more  
than 20% of its funds on administrative costs," then can't understand  
why the organization is inefficient, has high-turnover of staff,  
doesn't have the latest networking technology (and, therefore, doesn't  
know how to use it) and can't serve a larger number of clients.  
For-profits would never think of skimping when it came to, say,  
promoting a new toaster, but they want nonprofits to address  
homelessness, HIV/AIDS, children's issues, etc., with relatively tiny  
budgets and lots of good will.

My biggest frustration with for-profits is some of their proposals to  
"help" nonprofits and schools. For instance, I worked with a school in  
a low-income area of a high-tech city, and they were constantly  
getting calls from high tech companies who wanted their employees to  
get to do feel-good, fun, photo and video friendly activities with the  
kids -- like pizza parties or having the marketing person to come talk  
to the kids about how great the company is -- in the name of  
"supporting kids' education." The school often felt obligated to  
oblige, because they were receiving a financial donation from the  
company. But it came at the cost of classroom time -- and if you are a  
teacher, you know how incredibly precious every minute of teaching time.

Or take volunteers: corporations will happily chirp, "Your  
organization should involve more volunteers, so you can save money on  
staff!" But volunteers are *never* free. A for-profit would never  
think of hiring someone with a much-needed area of expertise without  
benefits (let alone a salary), but they don't seem to understand that  
volunteers need effective support, supervision and recognition, and  
that there are accepted standards for volunteer management that  
include having a trained volunteer manager -- usually someone who is  
*paid*. But the nonprofits balk at funding such a position or the  
training required for effective volunteer management -- volunteers  
should just automatically know what to do and how to do it and be  
motivated entirely by warm fuzzy feelings in their hearts.

Tieing this to addressing the digital divide: I can remember back in  
the 1990s when so many communities were launching community technology  
centers in the USA. For-profits were eager to supply such centers with  
technology, but how many funded the training of volunteer managers,  
those who often play a fundamental role in whether such a center  
survived or failed? For-profits will hire an expert for their own  
organizations with a particular area of expertise, but do the same for  
a nonprofit? Just find a volunteer to do it!

I can also remember sitting in oh-so-many nonprofit conferences in the  
1990s, as smug start-up tech company founders chided nonprofits for  
how they "did business", mocking them for their focus on their  
missions instead of on making money, and not "embracing technology"  
(ofcourse, these speakers' companies also refused to fund tech at  
nonprofits, because they didn't want to fund "administrative costs").  
Funny -- most of those hot shot tech companies are long gone, while  
the nonprofits are still plugging along.

In short, the naiveté of the for-profit world regarding the  
mission-based world is stunning, and many of the posts to this forum  
are a reflection of such.

> In reality, they are a bridge between their real clients, the funders
> and the people who are the ultimate recipients.

I could not disagree more. Funders and volunteers are investors. Those  
whom a mission-based organization serves are the clients.

Taran Rampersad wrote:

> Consider that the reason non-profits exist is because of
> perceived failures in governments and companies - which include the
> group, 'funders'.

Again, I could not disagree more. Nonprofits exist because it's felt  
by many that the mission-based approach is the best way to address  
certain issues or provide certain services. For instance, a nonprofit  
theater approaches its role in the community, it's involvement of that  
community, and the art it provides that community in a way that's very  
different from a for-profit -- it's not done because it's better than  
a for-profit theater, but because there is often MARKET DEMAND for  
this different approach, one focused on the mission instead of  
profits. It doesn't mean the theater doesn't turn a profit, but it  
does mean it's artistic decisions have to be driven solely by filling  
every seat and charging as *much* as possible.

That isn't to say that governments and companies don't need to exist  
and nonprofits should run everything -- it's to say that there are  
many different approaches to provide certain services and address  
certain issues, and nonprofits are sometimes the best choice.

For-profits need a lot more education about how mission-based  
organizations work, the standards with which well-run nonprofits  
adhere to, and how for-profits' own funding restrictions, application  
of for-profit methodologies and lack of knowledge about the area the  
nonprofit is addressing can interfere with the essential work of  
nonprofits. They need to serve on boards of directors, for instance --  
that's often the wakeup call for for-profit folks who think that  
nonprofit professionals are merely "semi" professionals, with no areas  
of expertise. Suddenly, Mr Know-It-All is Mr. Wow-I-Had-No-Idea...

And nonprofits need to be able to say to for-profits: "Thank you for  
that offer of support, but it's really not appropriate for our  
organization, as it would take away from our core business practice.  
But here's how we COULD use the services/funding of your  
organization..." Mission-based organizations need to approach  
for-profits for funding from the point of view that "You, the  
for-profit, need us, the nonprofit, and here's why..."

Yes, I've worked with a lot of poorly-run nonprofits. But no more than  
I've dealt with poorly-run for-profits.

Greetings from Kabul.

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Jayne Cravens, MSc
jc "at" coyotecommunications "dot" com

Nonprofits/Civil Society -- Resources & Services
www.coyotecommunications.com/

International Development Work & Studies
www.coyotecommunications.com/development
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