Friday, May 30, 2014

Competing with the For-profits

By Steven Worth

These days, there is hardly a sector where for-profit organizations have not made in-roads into areas that were once the exclusive domain of nonprofit organizations. Whether it is in supplying blood to US hospitals or offering the public for-profit alternatives to nonprofit and government sponsored schools, for-profit organizations are often beating nonprofits at their own game by providing more creative, effective and efficient alternatives. If you don't see this happening then you should look again; it is not a pretty sight.

So what is a nonprofit organization to do?

As management consultants dedicated to helping nonprofit and public service organizations become more efficient and effective, it is bracing and encouraging to see increasing numbers of well-trained, dynamic managers of associations, professional societies and philanthropic organizations employing technology and management techniques that used to be the exclusive domain of for-profit companies. As a result, their organizations are becoming every bit as efficient and effective as the best practices in their respective sectors-even while they remain faithful to their mission-driven purposes upon which their nonprofit organizations were founded.

In this race to be competitive it seems to me that it is critical nonprofits not lose sight of their innate competitive advantages over for-profit corporations:

* Energized members and customers: Mission-driven nonprofit organizations are successful in attracting armies of dedicated volunteer talent from recent graduates to recent retirees (and everyone in between) precisely because they do appeal to the human need to serve a purpose greater than ourselves.

* Doing Good: Corporations too are buying into the idea that it is good business to do good. While advertising and sponsorships have been in decline since the beginning of the Great Recession, Corporate Social Responsibility (CSR) has taken off. Many times these CSR projects are in partnership with nonprofit organizations whose missions and visions (not to mention their credibility and credentials) dovetail with what these corporations want to do.

* Sense of Community: Communities of people sharing common interest--for-profit companies don't provide this; nonprofits do. We are social animals and like to share our time and talents and thoughts with people who share our interests and concerns on-line or in-person. This is the trait or characteristic that always finishes at the top of the list when membership organizations poll their members about what they value most. This is the sticky soft power of nonprofit organizations that no for profit can match.

We love seeing nonprofits producing fact-based business plans that provide measurable performance indexes and bottom line impact analyses.... But don't forget your heart, your energized members and customers, your goal for doing good and your important sense of community.

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