A Little Rant About Non-Profits

In the last two weeks, I've heard at least six people blame their financial woes on being "non-profit" organizations... which isn't accurate.

I run two non-profits. STORY and Whiteboard are both non-profit organizations. But non-profit doesn't mean you're supposed to hurt for money. That's not the prerequisite. It doesn't mean you have to beg for donors and struggle to survive as a business model.

It doesn't mean that you bring-in less than for-profits. I know plenty of non-profits that blow the doors off for-profits in revenue.

A non-working business model is a non-working business model, regardless of whether it's for profit or non-profit.

Everything has a "business model." Your church. Your business. Your non-profit. Even your family budget. It's all very simple: revenue in; expenses out. And the revenue has to be more than the expenses.

I'm no attorney, so grain of salt here, but revenue can be generated the same way as a for-profit company. But no one person or group of investors can personally profit from the revenue of the company.

It's not about being non-profit.

It's the business model, baby.

Comments

[Todd]

Amen, brother! I come for a business background (venture capital) and started a new career direction six years ago working for a non-profit. Personally, I stay away from that term because every organization is out for SOME kind of profit. Ours happens to be social-profit... we're changing and improving life for traumatized children. They profit from this, and so does our society as a whole. Also, I brought many business principles with me to this org which are helping to move us farther along at a faster pace in reaching greater social-profit. So, I suggest all of you people at "non-profits" sit down and write out what true profit you are reaching for... why do you do what you do? Then, change your thinking, your terminology, and your promotion about who you are. Bring in someone (preferably a donor or two who know you and support you) for a strategy planning session. You just might discover that you actually are making a "profit", and maybe even discover new ways to capitalize your mission!
Todd Garrison
toddg@intermountain.org

[dewde]

Todd:

Pretty sure Ben was talking about money.

peace | dewde

[todd]

dewde... yeah, money. Well, in a way I was talking about money, as well but didn't address it head-on. Thanks dewde for the nudge!

I guess my point was that once you discover your true "profit" (i.e., changing lives in measurable ways), can articulate it a way that is clear, inspiring, and repeatable; then you'll find the money. Another point I was trying to make is that non-profit's often miss (or don't even look for) creative and/or alternative ways to generate cash flow. Non-profit's are the gap-fillers between the social ills of the world and, the business world. They are the moral expression of our society to solve social problems that the corporate world won't or can't.