Non-profit and for-profit mindsets and operations

As a lifelong non-profit type, I never understood the mindset of the for-profit person - and may I say that the for-profit person often has an equally difficult time understanding the mindset of the non-profit person. Many for-profit folks think of non-profit people as less intelligent, less skilled, less motivated, less sophisticated. I took great pleasure in bursting those bubbles of disdain, while also recognizing that there are many in the non-profit sector who are not well-trained or well-educated or well-equipped simply because the sector doesn't have the same resources as the for-profits.

My mindset is always "let me help, let me put my gifts to use helping others find and use their own gifts." I am not motivated by money so much as by being of service to others. Yet at the same time, I believe in and value efficiency, effectiveness, results, measuring progress, having a demonstrable impact, being accountable - so many of the things that I am taught in the MBA program. It always struck me as a huge insult to those I said I wanted to help to operate sloppily or to tolerate incompetence. Treating people with dignity means doing my best, aspiring to excellence. It also means being entrepreneurial, in terms of looking for the best and most effective way to meet a human need.

Entrepreneurial spirit is not limited to profit-making enterprises and people - entrepreneurial people are innovators, initiators, dreamers who can bring their vision to life. There are tens of thousands of non-profit organizations that exist because someone had an idea that s/he could provide a needed service more effectively than the non-profits that already exist.

And non-profits compete, too, for limited foundation and corporate contributions, as well as for the charitable dollars contributed by individuals. More than 90% of charitable funding is from individuals, and so non-profits spend a lot of time trying to figure out how to market themselves to people, to get a potential donor just to open the envelope or the e-mail, to convince potential donors that their solution is the best one, and to get donors to give more the next time.

What we sell, however, isn't something consumable but something intangible, spiritual if you will. We sell good will, good feeling, satisfaction in doing good. Yes, fundraising is about getting money to support daily operations and activity. We do have a bottom line, after all, and have to break even (and hopefully put some money by for a rainy day). That's from the organization's side - we need money to feed people or put in wells or distribute mosquito nets or train someone in a new skill or to teach a child. Because there are costs associated with living on this planet and most of those costs require money in exchange. From the donor side, however, a non-profit is providing an opportunity to be part of making a difference, to have a positive impact on the world, to practice giving without expectation of return, to give back what the world has so generously given to you.

So it takes a slightly different perspective to market a non-profit. It takes an understanding of what makes people give. That's different from understanding what makes people buy. Of course, when my non-profit put on events, we understood what would make people buy tickets: a fabulous NYC venue with other people like them in attendance (ego), some celebrities with whom to rub shoulders (ego), a chance to wear an amazing dress (ego), and in the case of our events, a fun time to dance and eat and drink. Oh, yes, and a chance to learn a bit more about the organization and feel really good about dropping $1000 or $5000 or more that evening. Sort of like selling a product.

More than anything, it takes authenticity to attract funding. I really believe in the causes I support. I fundamentally believe that it is possible to improve conditions for many people, and that I have an obligation to work in that arena. That's the purpose that gets me going in the morning and afternoon, day after day.

What I understand from my MBA studies and talking to many people who now want to transition into working in the non-profit sector is that for-profit life is not like that. Money is the purpose, the creation and expansion of wealth is the reason for the corporation's very existence. People who want to work in non-profit now are motivated by adding meaning to their life. They have their basic needs taken care of, so now they want to help others meet their basic needs. That's a great shift in the consciousness of the boomers - the search is now for meaning instead of accumulating more, more, more wealth and profit. Some of these people have said "yes, I have enough stuff, but I don't have enough spirit." That makes me hopeful. Of course, many of these people are shocked by how much non-profits accomplish with so few financial resources and some gain long-overdue respect - or leave the sector.

Could a non-profit organization perform the same functions as a for-profit without being driven by the profit incentive?

I don't know. I mean, non-profits are usually organized around meeting the fundamental needs of people. I was Executive Director for 11 years of an anti-hunger non-profit in NYC - providing food for people who did not have the resources to get enough nutritious food for themselves and/or their families. I've worked with job training, with community gardening and local food production, helped community organizing around primary health care and economic development, around literacy and HIV/AIDS prevention and treatment and housing - you name it. Even the largest non-profits like hospitals and universities are organized around basic human needs, for health and information and knowledge-building. There are those that get computers to non-profits or to low-income people. Most non-profits seem to provide a service that no one can or will pay for. So it gets provided for free by a non-profit. And thus the motive isn't profit or wealth creation per se, but doing good, redistributing resources, ensuring that something valuable is available to everyone in society not just those with money.

Theoretically, I suppose a non-profit could organize around getting just about anything to anyone if you really wanted to create a disincentive to the profit motive. Today, the legal restrictions on non-profits mitigate against this. Non-profits are tax-exempt in the US and most of the world because they perform work for the public good, the public benefit. My understanding is that for-profits are taxed because they perform work for their own benefit or for the benefit of very few people. I just can't see a non-profit making and selling yachts to wealthy people. Making yachts for anyone to ride on, that I could see. But who's going to pay for it?

It's a conundrum, because we have a society and a global economy that is based on the currency of exchange, and the creation of wealth seems to be the engine for the system, with human nature the fuel. I wish people had less desire to have more and more and more. That seems to be a basic human characteristic, however. Those of us who have somehow moved out of the "more" syndrome have done so through years of work and self-examination. And speaking for myself, I slide back into it when I see something I like and want and can convince myself I "need." Eternal vigilance is the price I pay for enlightenment! :-)