3 rules of thumb for a thriving nonprofit
/I just finished reading The E-Myth Enterprise by Michael E. Gerber, touted as “the world’s #1 small business guru!” by Inc. Magazine.
I’ve read my share of business books but his view on what makes a thriving business requires something of a Zen mindset, which stands in stark contrast to the usual finance, product production and marketing drivel that plays like white noise to me so often when I venture into the world of business education.
Gerber’s perspective is that a business must exceptionally and simultaneously serve the “essential needs, unconscious expectations, and perceived preferences of four distinct groups: the people who work for it, the people who buy from it, the people who sell to it and the people who lend to it—in other words, its employees, customers, suppliers and financial institutions.
He then makes his case by detailing the ingredients, skills and preferences he advises business owners to “post on your wall, burn into your brain, think about during your commute and remember every day,” as they build their enterprises.
It’ll definitely require a change in paradigm to incorporate all this, but for those entities looking to play in the big leagues of Apple or Starbucks (whom he touts as standard bearers of the practice) there’s plenty room at the top.
Nonprofit businesses don’t usually think of themselves as having competition, except of in the case of attracting and retaining donors. And even then, the competition is for dwindling personal discretionary income of prospective donor markets, not necessarily a threat of solicitations from other nonprofits.
Nonetheless, to remain relevant with those donors, however loyal they may be, nonprofit ought not to take them for granted.
Gerber’s assessment of what makes a thriving business can very easily be applied to nonprofit businesses. They too have employees, customers (clients), suppliers (service providers-which may be one in the same with some employees) and financial institutions (or donors for our intents and purposes).
Gerber starts off his book sketching several rules of thumb that I think they could just as easily be applied to nonprofit organizations, particularly because they are at the heart of nonprofit vision and mission:
Businesses exist only because people want them to. As most nonprofit begin as a response to a problem or challenge, their life blood is people, particularly people committed day in and day out to solving that problem or addressing that challenge.
Be it the nobility of the trailblazing founder or the tenacity of that corps of program staff; the intrepid board chair that challenged board colleagues to meet a funding goal he vowed to match or the volunteers that stepped in to take turns at the front desk while the receptionist was attending to a family emergency, it seems at times that solely by sheer will and determination our nonprofit defy the odds to survive.
There aren’t any good answers for long. nonprofit must determine in a timely and effective manner what they need to do to ensure they continue to meet the needs of their clients. What worked three years ago could well be detrimental now.
Taking regular inventory, as through surveys, open forums and strategic planning can help NPOs stay abreast of industry trends and specifically environmental shifts that affect how their programs are experienced by the people they serve.
You are either the lawnmower or the lawn. This eludes a survival of the fittest mindset and yes, as I wrote in an earlier blog, nonprofits do have life-cycles, many of whose do come to an end. Once the programs become irrelevant and they see the organization as no longer viable, it will cease to exist.
While a greatly-feared “natural” predator of an nonprofit is the effect a continuing devalued dollar has on a prospect’s propensity to give or invest in its programs, surviving these times and staying on top really means continuing to create systems within the organization that function to:
1) deliver efficient programs and services,
2) compensate staff appropriately,
3) thank donors meaningfully and promptly and 4) build sound and responsive leadership.
Nonprofits can move beyond surviving to thriving, and some of the best ideas out there are from progressive business minds. Venture into the land of capitalism the next time your shopping for a good read. You’re bound to learn something enterprising.