From Infant to Toddler: How Young Not For Profits Can Turn Barriers Into Opportunities

Since 2008 the world of non-profits has seen some additional shifts that are certain to impact the sustainability of young not-for-profits in their first 1-5 years of operation. One of the biggest challenges is that there has been a significant increase of new players in the market. Not only are traditional non-profits competing with for-profit social venture models, but they are still trying to navigate the ever-expanding competitive landscape among non-profit organizations. With the economy still recovering and people looking for meaningful work and the halo effect from President Obama’s message of community service the non-profit arena has also seen a surge of new non-profit organizations. While some are still asking the questions of if and how they will survive many are focusing on how they can position their not for profit to emerge as a leader in the community Profit. Other non-profits are reshaping their business models and re-prioritizing their strategic decisions to ensure that they will not only stay afloat as the market returns but ensure that their organization emerge as leading practice organizations, regardless of their years in the community, program size or bank account.

Recognizing the need for new leadership during new times

First and foremost organizations must assess the extent to which the leadership that founded and developed the organization has the right strengths and talents to move the organization forward. This is a two-part issue. On one side, many non-profit business leaders get too comfortable in thinking that just because someone is a passionate community leader or a founding member of the organization that they are the right person for the next phase and development of the organization. While there is still time it is imperative that organizations ensure that the right people are on the bus and in the right position. The second component to ensuring that you have the right leadership in place is to make certain that you understand how the strengths and talents of the current leader align with the future needs of the organization. So, it is not a question of are they good for the organization today, but are they the right person for what the organization needs tomorrow? Recognizing the need for new energy the current leadership (two of the original founders) of a local non-profit recently stepped down, opening up the opportunity for a new Executive Director and management team to move in. The new team includes a new Program Director and two newly created positions for a Strategic Development and Creative Development Director. The former Executive Director has moved to Board Chairperson to help ensure a smooth and successful transition.

Invest in the Human Capital of the Organization

Many not-for-profits have been intuitively ratcheting back their investments in human capital. However, one of the central components of having a successful not-for-profit is having a talented team of people who can work effectively together to produce meaningful impact in the community. With the increasing requirements for not-for-profits to establish comprehensive business strategies, logical models, program evaluations and positive and relevant program outcomes having the right team of passionate and qualified staff can become a significant competitive advantage. Once you have the right people on the bus and in the right position, invest heavily in them to ensure that they can more fully leverage their strengths and talents to help the organization better meet the needs of the community. Such investments do not have to cost additional money. There are many for-profit and non-profit organizations that regularly provide free training to non-profit leaders in the community. It is also a good idea to keep in touch with local universities and colleges who may provide free workshops, seminars and conferences. You may want to invite academic leaders to speak to your organization about their latest research, as well.

Integrating More For-Profit Business Standards & Financial Models

The primary distinction between non-profit and for-profit businesses is what happens at the company’s bottom line. Non-profits are granted certain tax privileges in exchange for reinvesting profits back into the organization. Somewhere in the history of non-profits less emphasis was placed on making profit and more on providing services. If non-profits hope to weather the tides of political and economic storms, there must be an attitude change towards managing non-profits like for-profit corporations. Analyzing the organization’s business model, from the prospective of utilizing internal resources for cash flow, can shift this service oriented mentality in a number of ways. First, it forces the organization seek and implement innovative programs for their constituents. Second, it allows non-profits to share their innovative techniques with other organizations in a revenue generating capacity. Lastly, it provokes organizations to seek creative methods for including community members in the growth and development of the non-profit. For-profit organizations spend a tremendous amount of revenue on research and development. Thriving for-profit corporations have learned that in order to remain ahead of competitors there must be innovation in both their products and method of delivery. Although non-profit organizations often times function with budgets considerably lower than their for-profit counterparts, there are numerous research and development resources at the disposal of non-profit organizations. Tapping into the research conducted at colleges and universities is one option. Non-profits need to ta

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