The Nonprofit Catch-22

Those of us in leadership positions in the nonprofit world often get advice that we should run our organizations “Like a Business.”  More often than not, the person giving us this advice really has very little to specifically recommend.  If we press them, we hear that we should: 

• “Be more efficient” and, 
• “Lower our overhead.” 

When asked how we can achieve these economies, we are inevitably advised to:  

• “Get volunteers to do back-office functions like HR or IT services”, and/or 
• “Ask for in-kind donations for things like space or computers.” 

This phenomenon is called the Nonprofit Catch-22:  When a nonprofit is instructed to be more like a for-profit business by utilizing essentially nonprofit practices that no self-respecting business would ever implement if it had any intention of doing well or growing.

At my nonprofit we often sit around the lunch-room table pondering what we would do if we were, in fact, a for-profit business.  We know that we are not a revenue producing enterprise with profits available to invest back into our business model.  We know that we serve low income families, an overwhelming percentage of which have incomes less than $10,000 a year.  We know we are totally dependent on donations that as much as possible must go straight to our clients.  So we realize these revenue dreams are pipe dreams* but that doesn’t stop our wishing and hoping.  

     So here is our list of the Top 3 Things we would do if we had the revenue to do it, with no one constantly harping on us to keep our admin/fundraising percentages so cripplingly low: 

1. Aggressively Drive “Sales:" We would fill our offices with an ever-growing group of exceptionally talented sales staff who would recruit thousands of volunteers and solicit millions in donations.  We would pay them more than our nonprofit competitors and as much as any for-profit business in town.
2. Fiercely Advertise the Need & our Outcomes:  We would plaster our brand all over town.  We would create amazing marketing campaigns that would make us the Nike of youth development services.  This would generate thousands of volunteer recruits and millions of dollars in donations. 
3. Innovate with Wild Abandon:  We would direct a huge percentage of new revenue into program improvements, enhancements and innovations that resulted in 100% effective mentoring relationships for all kids in our community.    

All of this activity would result in our organization moving the needle so quickly on building the assets youth need to grow up successfully that within 2 generations we will have put ourselves out of business and then go on to solve an equally troubling social problem for another nonprofit cause.  

We know that “the problem is massive in scale and we are tiny up against it,” but we also know that only the people who are crazy enough to think they can change the world are the ones who can actually do it.  

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*Pipe Dreams, that is, until we figure out what our Girl Scout Cookie is....