As I transition back into the commercial sector, I realize there is an abundance of seasoned business professionals in the commercial and government sectors; however, there seems to be a significant need for that experience to transfer to the not-for-profit sector (NFP). It appears to be quite the challenge to attract seasoned pros to NFPs. The challenge is in part due to the misnomer that NFPs cannot afford great people and in part due to the culture of the NFP sector.
First, it is important to point out the difference between the true “charities” and the product/service driven NFPs. Charities are generally driven primarily by fundraising, if not exclusively, a good example is the local United Way. Product/Service driven NFPs have several revenue streams, a good example is healthcare organizations. Both types of NFPs are often driven by missions centered on serving the public.
The product/service driven models should essentially run as a any for profit business model, with the exception being that the “profit” is essentially reinvested in the mission (i.e. the public it serves). There is this gross misnomer followed by many NFPs (ultimately driven at the board level) that NFP is synonymous with “for-loss” and that conventional business wisdom doesn’t apply. This is untrue, at the end of the day the NFP still has a budget and a responsibility to operate efficiently. Many standard business tools and processes need to trickle to the NFP world, such as: strategic planning, sound budgeting and financial analysis, season business executives, ERP and other technology implementation, goal setting, accountability and ultimately sound governance.
So the challenge goes out to the NFP to attract seasoned business professionals and best practices and to ditch the “for-loss” mentality. This often will involve a culture and board change, but at the end of the day the public is the true beneficiary not the board.