We’re excited to announce our Founder and CEO Pamela Hawley was just featured in Forbes publication! The article is entitled The Professionalization of Charities: What Nonprofits and For-Profits Can Learn From Each Other, and was published on January 11, 2018. Please see below!
As stated in an article by The Economist (subscription required), “Nonprofit organizations are learning lessons from businesses. And businesses are learning from charities”
I love that people are seeing that the for-profit sector and nonprofit sector can learn from each other. Nonprofits are reassembling more and more like businesses. They might have storefronts, generate revenue, maintain contracts and create strong brands.
“That shift is global,” according to Lester Salamon of Johns Hopkins Centre for Civil Society Studies.
Based on my experience in the nonprofit industry, here are five areas in which I believe nonprofits can learn from for-profits:
1. Efficiency: Nonprofits can be more efficient by watching how for-profits measure results. They, too, can think about their services in terms of having clearer, more tangible results.
2. A Strong Board Of Directors: Public for-profits create strong boards of directors. They know that having a board of directors can provide them with introductions and strong funding and can help to push the organization to another level. Nonprofits should follow this aim.
3. Generating Revenue: For-profits need to generate revenue to survive. I would say that the same should hold true for nonprofits. Try to have that standard.
4. Employee Benefits: For-profits often provide more employee benefits. Nonprofits should do the same. They can be different types of benefits, such as letting your employees leave at 5 p.m., and providing more balance as well as more vacation time. These are important benefits that don’t have to cost too much and encourage increased morale and team spirit.
Next, let’s review the ways for-profits can learn from nonprofits:
Based on my perspective, for-profits have a tendency to get caught up with results and sometimes lose their sense of purpose in why they’re doing what they’re doing. Public companies may feel focused on the stock market, for instance. For some for-profits, it may help to refocus on the mission to keep the soul of the company alive.
2. Positive Culture
There are many for-profits out there that drive relentlessly on results and forget about the people working at their organization. While they may provide bins of yogurt pretzels, cereal, candy, free dinners, pet grooming, laundry facilities and the like, there’s nothing that replaces good old appreciation and kindness in the day-to-day office life. At the end of the day, environment counts for a lot more than some for-profits might realize.
As the Harvard Business Review states, “While a cut-throat environment and a culture of fear can ensure engagement (and sometimes even excitement) for some time, research suggests that the inevitable stress it creates will likely lead to disengagement over the long term.” Based on my perspective, that’s because they aren’t conscious, caring and owning their relationship with the company. They are halfway out the door or already checked out.
Additionally, “The State of the American Workplace” report by Gallup, which measures employee engagement, found that “work units in the top quartile in employee engagement outperformed bottom-quartile units by 10% on customer ratings, 22% in profitability and 21% in productivity.” High engagement also resulted in less absenteeism and turnover.
Not caring is not good for business. Some for-profits can benefit from changing their approach to increase their team’s engagement.
3. ‘Doer Organizations’
Nonprofits don’t have the time to strategize, sit back in their chairs and analyze from above. They have to be both strategic and tactical. They have to care about both the long-term strategy and the day-to-day execution. Most nonprofits don’t have a lot of resources, so pretty much everyone on the staff is a “doer.”
Yet, for-profit companies often have a lot of fat. That middle layer at companies may be wasting company time, but the company has gotten too big to manage everyone effectively and resourcefully. Most nonprofits simply don’t have money to waste on this.
Your people should be there because of their heart and commitment. They are there to achieve a mission and change the world. Having team filled with doers can create strong, long-term cultures that can positively impact both nonprofits and for-profits.
I believe both sectors should converge to learn from each other. Both have healthy aspects that need to be practiced. As a nonprofit, be proud of what you have to offer for-profits. And make sure you take the lessons learned from for-profits so that you can create a top-running organization.