Should nonprofits emulate business organizations? That seems to be a major question pressing on the minds of many professionals these days. Many scholars warn nonprofits of becoming too much like for-profit businesses as it is important for us to realize that we do different things and have different goals, therefore we cannot operate in the same fashion. It has become apparent, however, (as mentioned in a previous blog of mine) that many people are seeking for the magic solution to making nonprofit organizations feel successful and last longer financially. The “solution” that has been chosen, more often than not, is that of following a business model.
For example, this article shows how a business school professor from Harvard is giving advice to nonprofit managers. Here, Rosabeth Moss Kanter provides insight for nonprofit leaders to use business-like mindsets to ensure their organizations successes. She recommends, for example, that in order to achieve organizational growth, leaders need to make sometimes “painful adjustments” in regards to budget, people, partners, culture, and impact. One thing that sticks out in my mind here is that, because of the uniqueness of the nonprofit sector, the ability to adapt and make these uncomfortable changes is a luxury many organizations lack.
Consider budget. Many nonprofits are increasingly dependent on government funding. It may be nearly impossible for a nonprofit organization to make changes to their budgetary allocations. Some funds they receive may be earmarked or grant monies for specific programs or services. Or, consider impact. Many nonprofit organizations are created solely to fill a government hole in providing a service for the public. For example, an organization who is dedicated to creating venues for special needs children to grow and learn social skills. This organization cannot simply edit its outputs or impacts on the community. The organization may be able to evaluate the programs and services it is offering, but the ultimate goal for a nonprofit is going to be to provide those services it initially set out to provide.
Overall, nonprofits are not able to simply change their vision or their paths as easily or as readily as their for-profit counterparts may be able to. It is important to note that because of the interdependence of nonprofits with other organizations, government sources, and the clients they serve, they are unable to make changes without considering the impact it may have on so many other stakeholders. It is important, when looking for other viewpoints to help a nonprofit change the way it is operating in order to become more successful, that leaders consider whether the path is appropriate for nonprofits or for business situations more specifically.