A Publication of WTVP

It’s increasingly understandable that nonprofit organizations, along with their managers and leaders, constantly face many new challenges such as growth, social problems, government funding cutbacks, and the need to serve many constituents. To meet these challenges, the use of modern business practices must be put into action to better meet their mission, manage their staff and finances, raise the funds needed, and market their goals and objectives to the community—both the public and the private sectors.

A nonprofit organization is a mission-based business. Fundraising efforts aren’t merely in place to provide money for the organization, but rather donors are “purchasing” services for others. And this purchase makes it even more important that nonprofit organizations provide measurable outcomes to their constituents.

Add to this current trends such as an aging population, increased competition for staff, donations, and services in the nonprofit arena; less support from the government; increased demand for services; and the need to rely on technology more than ever, and the nonprofit organization must begin looking at key factors they need to put into place to move away from a no-profit school of thought.

The first step is to look at the mission statement. If a nonprofit is to be mission-based, the statement needs to be viable—in other words, attainable. The statement is a resource, management tool, staff motivator, volunteer recruiter, and a fundraiser. It should be utilized at all times and requires leadership to do so.

The second step is to make sure this mission is met, and to do so you need the right people, which means a business-based board and an experienced staff. And third, these people need to be put to work as social entrepreneurs who utilize technology, marketing, and finances to create a vision for the entire organization.

If a business plan incorporating these basic steps isn’t strategically put into place, a nonprofit organization can end up somewhere else down the road. Strategic planning isn’t a bad word; without a plan, a nonprofit will only get to where it’s going by accident. And with the burden of providing for others on a daily basis, there’s no time for trial and error.

A good relationship between the board and staff is key to fulfilling the mission. A board provides a critical link to the community, those benefiting from the organization’s mission, and to sources of funding. They also need to provide expertise and objectivity, along with serving as a sounding board for ideas and plans. The board is often a much under-utilized resource. A nonprofit board needs to be made up of advocates and business leaders committed to the success of the organization.

Of course a two-way relationship must be put into place. A strong staff enables board decisions and direction to function efficiently, and a good board provides the staff with a high-quality mission to market to the public. And remember, the nonprofit organization needs a good staff much more than a good staff needs the organization. Treat staff like a resource, include them in committee work, and most of all value what they have to offer the organization.

How does someone manage a mission-based business? A nonprofit manager needs to utilize four main principles: balance, innovation, leadership, and communication. Balance is used when several needs have to be met with often-limited available resources. Innovation comes from the manager who takes risks on behalf of those being served by the organization. Leadership is in play at all times and leads to motivation of the staff, the board, and ultimately, the community. And finally, communication must be open at all times, and it must be effective.

Of course innovation leads to another business practice not often employed in the nonprofit world, and that’s risk taking. By constantly looking for opportunities to add value to your services—either in the eyes of your supporters or in the eyes of those you serve—there comes a time when good business planning can be used to minimize the risk, and the nonprofit organization can add to its history of serving as a good steward to the community.

Everything that takes place in a nonprofit organization is marketing—just like in the for-profit industry. Whether a staff or a volunteer does them, these marketing efforts are how the community learns about your mission, how you get new “customers,” and how you acquire new “investors.” Make sure you listen—just like they do in the business world—so your customers get what they want.

Nonprofit doesn’t have to mean no profit. Organizations can increase effectiveness and turn their mission into one of power and impact by building basic business principles into their philosophy. By setting and requiring increasingly higher standards of practice, a nonprofit can surround itself with the right staff, volunteers, and supporters who will help them meet the needs of others. IBI