In last week’s blog post we touched on the power of purpose within an organization. This week, we are switching gears and discussing profit. Although profit is not the only measure of success and does not solely define an organization, it does matter greatly. Not only in a for-profit organization but in a non-profit as well. Many non-profit organizations reject running like for-profit organizations with the belief that purpose trumps profit. Non-profits might not have the same financial goals as for-profit organizations but they can greatly benefit from adopting some best practices. Non-profits are purpose driven organizations whose goal is ultimately social impact. A focus on profit will enable non-profit organizations to have a greater cause impact.
Return on Investment
The main goal of a non-profit organization may not be to make a lot of money but it can still be used in many instances like measuring the value of programs and comparing the costs of certain initiatives. For example, if an organization has a program that generates more value but uses less resources – that means it is better than one that uses more resources but generates less value. Through monetizing program value and tracking program costs, a non-profit organization has the ability to see which programs they should focus on and which they should either deprioritize or eliminate.
In for-profit organizations, generating results for both the present and future is essential. This is also true when it comes to non-profit organizations. It is essential that a two and five year plan is in place, not just an operating plan for the next 12 months. Non-profits can learn a lot by looking at successful start-ups in the for-profit space. Non-profits are looking to disrupt and make a major social impact in one way or another – but this is not something that can be accomplished in a day! Start-ups are looking to do the same, disrupting the space they are in and making some type of change. Many non-profit organizations tend to focus on immediate, measurable ROI as donors can be risk-averse. Whereas in the for-profit, start-up space, taking risks and investing in the future is encouraged. The organizations that perform best are those that can skillfully evaluate both short-term and long-term opportunities – that is where real impact happens.
Meeting and exceeding customer expectations is something we hear a lot of in regards to for-profit organizations. It is just as crucial to do the same in the non-profit space. When a problem has been identified and the programs and services needed to address that problem have been put in place – it is time to deliver. Just like in for-profit organizations, it is necessary to lay out the appropriate expectations and deliver above what customers (or donors and volunteers) would expect. If donors or recipients of that program or service experience an issue, assist them as a for-profit would in customer service. Keep all donors and volunteers engaged through content strategy that reflects their interest in the organization. This will in turn provide a better experience and greater satisfaction for all parties.
Failing to adopt strong for-profit practices can often lead non-profits struggling to deliver an impact. In order to achieve the greatest impact, non-profits must measure and track costs, be encouraged to take risks and invest in the future and exceed both donor and customer expectations. Well run, non-profit organizations can attribute much of their success to the adoption of best practices from for-profit organizations.