Monday, October 28, 2013

Money, Money, Money!

By Steven Worth, President, Plexus Consulting LLC

“Money, money, money, money, money….” (from “Cabaret,” the musical).   Many, if not most, of us consciously chose careers in the nonprofit and public service sectors

Many, if not most, of us consciously chose careers in the nonprofit and public service sectors because of their mission-driven focus to better the world, or at least that part of it that we are in. And in this context, the subject of money is often seen as antithetical to value-based organizations and causes many good nonprofit and public service executives visibly to cringe whenever the word is mentioned.

This is unfortunate—especially as for-profit companies, which are definitely driven by money, are increasingly eating nonprofit organizations’ lunches in markets such as education and professional credentialing that used to be the exclusive reserve of nonprofit organizations.

Money may be the “root of all evil” for religions, but it is a good and useful tool for managers who are interested in measuring the efficiencies and effectiveness of their programs and operations as well as the relevancy of any and all products and services that might otherwise be bundled and given away for free as “member benefits.”

This concept of money as a metric is a large part of what has driven nonprofits to become less dues and more non-dues focused over the past decade and is a major contributing cause to the nonprofit awakening that we are seeing (cf. A new study by Johns Hopkins University highlights new data from the Bureau of Labor Statistics that reveals surprising trends from nonprofit sector job growth. “Holding the Fort: Nonprofit Employment During a Decade of Turmoil” reports from 2000 to 2010 the nonprofit sector had an annual average job growth of 2.1 percent. Over the same period the for-profit sector had an average annual rate of minus 0.6 per).

So if you are a manager of a nonprofit and pride yourself on not giving a thought to money—you may want to reconsider—it may not be your personal motivator, but it is definitely your friend as a management tool.

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