Operating in a Complex World: The Argument for Not-for-Profits to Change Everything

Advisory | Brian D. Sackstein | Sep 16, 2019

Originally published by Long Island Business News

Profit. When we hear the word profit, we think of Wall Street, shareholders, stocks, global conglomerates, and billionaire CEOs; we don’t conjure up the image of a not-for-profit organization helping provide services to the community. In fact, the word profit seemingly goes against everything that a not-for-profit organization stands for – it’s even in the name. But, with ever-increasing focus on the vitality of our neighbors and communities, now is the time to change the way we view not-for-profit organizations and identify creative solutions to their current problems.

The first step in shifting the perception of not-for-profits is to understand that, in reality, these organizations function in the same way as for-profit businesses. Both operate in a very similar manner with similar challenges, and many are subject to some level of regulation. But, most importantly, they share the common goal of operating at a profit. The difference is how those profits are used; for-profit businesses use these monies for their shareholders and stakeholders, while not-for-profits use them to provide additional or enhanced services to the community.

While there is a sizeable population that has left the corporate world to pursue their individual passions, start businesses, or travel the world, there has been a large increase in the number of individuals who have left corporate jobs to join not-for-profit organizations. The reasons for this switch can vary from a desire for a better work-life balance to a sense of duty to the community. They enjoy personal fulfillment and help their neighbors, communities, and the planet through an array of social and environmental services. The most valuable result of their transitions, however, is that they come to these organizations with business mindsets and experiences that greatly benefit the organization they are joining by influencing internal operations and strategic goals.

Now that the process of transforming the way these businesses operate and strategize, the next step is to shift the perception of the public. As soon-to-be college graduates begin to think about life after graduation, many are searching for their first “real” job. To most, that means joining a large, for-profit company. To some, it means embracing their entrepreneurial spirit and starting a business. But, as our economy evolves, the desire for flexibility and work-life balance dominates employment conversations, and collective attitudes towards community empowerment and saving our planet shift, it is important to remember that not-for-profits are a rewarding option as well. Charity, social responsibility, and giving back have been woven into the fabric of our lives, and it is imperative that our attitudes towards business and success follow suit.

Once this occurs, the next hurdle is something that all organizations struggle with: raising funds. Many not-for-profit organizations spend a huge amount of time and effort fundraising.  Those fundraising efforts do not cover the real hard costs of the organization; these are primarily covered through reimbursements from state, city or the federal government. This model of reimbursement is not sustainable. If we shift the focus of public involvement within the not-for-profit community, and instill and capitalize on the philanthropic mindsets of these individuals, organizations may be able to capitalize on public donations rather than government funds.  By reducing the overall hard costs of the not-for-profit organizations, we effectively provide more resources directly to the people who need them.

To this point, we have covered changes in the way that these organizations operate, attracting individuals into the fold at an earlier point in their lives, and raising funds. These are all worthy things to focus on, but it is also important that these organizations partner with other, for-profit businesses to bring about real change in the real world. Impacting the community is not reserved only for not-for-profits anymore; businesses need to work together to solve some of the complex challenges our world faces today.

As an example, a not-for-profit organization that provides housing services to underserved communities on other continents joined forces with a for-profit builder to create structurally stable homes. The huts and shanties that these families would construct on their own were subject to destruction by strong weather events. These two businesses teamed up to build new homes out of a liquid concrete previously unavailable and unaffordable to those in need. Through their partnership, these organizations changed the game while providing life-altering services for those in need. This type of symbiotic relationship and success is key to revolutionizing the state of the not-for-profit industry. Without the continued focus on these alliances, every organization – both not-for-profit and for-profit – falls short of their potential. We must all band together to create the best world possible.

2019-09-17T10:48:57-04:00