Thomas Edison State College
Application Assignment 1
1. Should nonprofit groups operate like businesses? What are some of the potential benefits of doing so? The potential dangers?
According to Dr. Johnson, “no matter what particular type of organization we work in, we can learn from the experiences of others in different settings” (Johnson, 2007, p. xxiii). Nonprofit groups can, for instance, learn from businesses how to operate more efficiently by maximizing the use of available resources. Dr. Johnson provides the example in his book that knowing how corporate managers communicate important values can be useful to employees working in the federal government (Johnson, 2007, p. xxiii). For these reasons, nonprofit groups should operate more like businesses by incorporating best practices that will make them more effective in carrying out their mission.
The greatest potential benefit of nonprofit groups operating like businesses is operational efficiency and less dependency on public funding. As described in the case study, “Blurring the Line Between Profits and Nonprofits,” when Michael Miller became President of Portland Goodwill in the mid-1980s, he adopted a corporate approach to running the charity that increased total sales tenfold (Johnson, 2007, p. xxiii). By adopting business best practices, this nonprofit group became very successful and was able to reduce its reliance on government funding.
The greatest potential danger of nonprofit groups operating like businesses is greed. Businesses are in business to make money for their owners and shareholders. Nonprofit groups could potentially develop a conflict of interest and lose sight of their mission. In the case study above, Miller received over a half million dollars a year in pay as President of the nonprofit group that was subsequently reduced by 24 percent after the Oregon attorney general ruled that his
References: Johnson, C. (2007). Ethics in the Workplace, Tools and Tactics for Organizational Transformation. Thousand Oaks, CA: Sage Publications, Inc.