A Non-Profit’s Guide to Success
Many non-profit organizations are struggling to survive in the world’s ever changing economic and social culture. Financial climate change is forcing non-profits to look at the way they do business, and in many cases reach out to for-profit organizations for guidance or even partnership. Doing more with less is the standard, but many non-profits must do something with nothing. Private funding is drying up and competition is extremely fierce for every government dollar. I believe that non-profit organizations can remain true to their mission and operate successfully in today’s market by adopting some of the financial practices used by for-profit companies. Non-profits also must strategically structure their board of directors to maximize potential and avoid common pitfalls. In this essay I will discuss how a non-profit organization can succeed by setting up a board of directors with a certain blueprint, thinking strategically like their for-profit counterparts, investing in partnerships, and creating alternate sources of income. I will compare practices of for-profit organizations that translate well into the non-profit sector and recommend management techniques for today’s non-profits.
Non-profit organizations differ from conventional organizations in many ways. From the founding mission statement to the process of liquidation after going out of business, the two types of establishments rarely follow the same practices. Neither is immune to financial disasters, however. Depressions in the global economy have huge impact on the futures of non-profit as well as for-profit organizations. It is becoming increasingly important for non-profits to change their financial management, and adopt some of the accounting methods and strategic thinking used by for-profits. Many non-profits are working to develop alternative income streams to help stay afloat. Hughes and Beatty define strategic thinking as “the process of collecting, interpreting, generating, and evaluating information and ideas to shape organizational sustainability and competitive advantages.” That is to say that companies must think about big picture, future endeavors and decisions necessary to keep the business successful today. Many non-profit organizations struggle with this because their survival is day to day. A decrease in government funding for non-profits and increasing competition in every sector is making it harder for the non-profit organizations to feel stable in today’s market. The lack of stability makes it nearly impossible to even begin thinking about future growth. I believe this is a major flaw in the thinking of non-profit organizations. By focusing more on strategic planning non-profits will have a better idea of how to manage current resources to help with future problems. I’m not saying it will be easy for non-profits to make this monumental shift in financial thinking. Non-profit organizations are designed to meet the social needs of their constituents. Leaders of these organizations are challenged with meeting the needs of their constituency on an unsecured, shoestring budget. Satisfying the funding requirements of funders and walking the fine line of financial efficiency while achieving their mission (McMurray, Pirola-Merlo, Sarros, & Islam, 2010) creates an organizational environment that is concerned with implementing survival tactics, which is the antithesis of strategic planning. (Clark 2012) The way people, and more specifically leadership, look at a non-profit organization must change in order to foster sustainable success. A non-profit organization might not be a business in the traditional sense since many do not have paying customers, but they do provide services to a variety of constituents in many cases. “The special characteristics of SSNPOs such as the combination of paid staff and volunteers and accountability of multiple constituents...
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