The Mission Paradox Blog

For a few dollars more

A friend of mine was telling me about her colleague that works in Development, or at least she used too.  Turns out that this Development Director had to quit her job at a nonprofit to work for profit.

Why?

Because the for profit offered her $20,000 more a year.

She didn't want to quit her job, so she went back to her nonprofit and basically offered them a chance to match the offer.

The organization's response, "We can't offer you a penny more because we are a nonprofit."

This type of mentality DRIVES ME NUTS!

Assuming that this person was a skilled, quality fundraiser, why would any company let her go for what amounts to an extra $1,600 a month?

Even if they didn't have all the extra cash available at the moment, why didn't they commit to the raise for a few months and then tell the Development person she needs to work to fundraise the rest of the money?

Good people are incredibly hard to find in any field.  Money should rarely, if ever become an obstacle to keeping them.

How is everyone else getting their cash?

I have talked before about the value of information, in that spirit here is a great report from the Bridgespan consulting firm that talks about how money flows into the nonprofit sector.  For example, did you know that arts and culture (my personal favorite type of nonprofit) receives only 3% of the total pool of funds given to nonprofits?  If info like that fascinates you then click the link above and check it out.

Note:  The link is a PDF file and the article is about 80 pages,

Thoughts on Individual Giving

Imagine Person A who gives to the following organizations:

The Sierra Club

The Democratic National Committee

Planned Parenthood

Can you get a picture of what type of individual Person A is?

Now imagine Person B who gives to:

The National Rifle Association

The Republican National Committee

Again, can you get a picture of what type of individual Person B is?

The purpose of this isn't to engage in stereotyping, it's to make a broader point.

Charitable giving, particularly from individuals has evolved from being a method of supporting the less fortunate, to a being a statement of what type of person the giver is.

Because groups like the Sierra Club and the NRA have put so much effort into creating a clear and compelling brand they can now go to the world and say . . . "Here are the type of people that give to this group, if YOU are that type of person, you should give to us as well."

So as you prepare that next individual giving letter, give some thought as to what sort of statement a giver could be making by donating to your nonprofit.

Then think about what sort of people would like to make that statement.

You may find out that there is a group of people, whom you had never previously considered, that could be persuaded to give to your nonprofit

The dangers of being the underdog

Many emerging and midsized organizations (nonprofit and otherwise) love painting themselves as the underdog.  It is the classic "Goliath" tale of a younger, smarter, more exciting company doing battle against the old, stodgy, wealth, other company.

When told well this story can bring in donors of all types.  But there is a flip side.

If your company raises enough money and grows fast enough, eventually YOU become THEM.  Now instead of battling against the establishment, you have become the establishment, which raises a whole new set of obstacles.

I think a better story is the one of "inevitable success", where you tell the community that while you are currently small, one day you will become a large powerful organization.  That way your group of donors is not turned off when your nonprofit begins to expand its reach.

Pay the man (or woman), Shirley

Courtesy of the Nonprofiteer blog, here's an interesting perspective on nonprofit salaries.

Nonprofit status as a strategic choice

As one of my nerdy side hobbies, I have been talking to some people much smarter then me about the idea of starting a theatre company.  As I talk over my idea with them, I always ask them whether they think my idea for a theatre would work best as a for profit or nonprofit organization.

Some people are stunned by this question.  They assume that since my primary reason for starting a theatre company isn't to make money, then being a nonprofit is the only other choice. 

I'm not sure that is true anymore.

For decades, the idea was that you start a nonprofit to do good and start a for profit to make money.

But look around, there are a lot of organizations now that are adopting the idea that they should do good and make money.  Whether it is Google starting a foundation, or a local law firm donating pro bono hours, the line between do good and make money is not nearly as clear as it used to be.

So while nonprofit status used to be a signal to the world that a company exists to advance the public welfare, now it simply a way of telling the world how a company chooses to make their money.

Being a nonprofit has certain strategic implications.  Being a for profit has certain strategic implications.  One set of implications is not necessarily better then the other.

For example, if I choose to start a nonprofit theatre, then I get the added benefit of being able to solicit tax deductible donations, but I lose a lot of flexibility on how the money generated can be managed and spent. 

If having that flexibility is really important to me, then maybe a nonprofit model doesn't work for me.  If having that flexibility isn't that big of a deal, then maybe the model works.

My big point is that for my organization and yours, you don't need to automatically think that just because you want to serve the public, you HAVE to be a nonprofit.  That just isn't the case anymore.

The importance of being naive

Maybe I'm writing this post just as a message to myself, but I'll share with all of you just in case it helps.

While doing my daily net surfing I came across this awesome post from a former venture capitalist who is now trying to start her own company.  It talks about how important it is for an entreprenuer to be a bit naive about the challenges they are about to face.

As anyone here who has ever started their own nonprofit, or works for a relatively small nonprofit knows, the odds of success are not nearly in your favor.

Then you have experts in the nonprofit field (and I am as guilty of this at times as anyone) who can easily tell you why your ideas don't work but aren't nearly as skilled as tell you what ideas WILL work.

If you are not careful, all that negative advice can kill your optimism and no nonprofit (or any organization for that matter) can survive without some level of optimistic leadership.

I think the key is balance.  Ignoring the challenges that surround any nonprofit organization can lead to horrible outcomes.  On the other hand, focusing on those challenges too much can be just as bad. 

Balance, of course, can be a very difficult thing to achieve.  But I think it's a worthwhile place to try and get to.

It isn't always right the first time . . .

The first piece of original programming for HBO was a polka concert.

The first few Starbucks didn't sell coffee (just the beans)

Very few organizations create their maximum business model right at the start, sometimes it takes a while.

But what makes these organization's special is that they were always trying to improve and willing to take the risks necessary to improve