The Future of Non-Profits: Adopting a Business Model

When I tell someone I work in development for a non-profit the response I hear the most is: "Wow, how is that going with the current state of the economy?" My response: of course, as with everything else, it has created an environment of competition. There are only so many foundations, grants, and large donors out there and with the growing number of non-profits and waning number of individual donors competition is great. So what is the solution?

Consolidate and diversify.

Now this may sound contradictory at first but I will explain what this actually means.

Consolidate:
One major problem for non-profits is we keep aiming for expansion, yet behind closed doors we are all struggling to pay the rent. What is the solution? Partnerships. If my mission and your mission overlap, why not share services? And better yet, if you are a corporation looking to create a non-profit to give back to your community and help with tax write-offs, why not partner with an organization that already exists? According to NCCS (National Center for Charitable Statistics) there are over 1.5 MILLION tax-exempt organizations in the US. Among those 1.5 million organizations there is surely one that matches your goals and mission.


Diversify:
Non-profits need to stop limiting themselves to the practices of the past and adopt a business model. What many people don't understand is that a non-profit functions quite similarly to a corporation; the main difference being, rather than selling a product, you're selling a solution. So we need to begin to think like a business, think outside the box, and find diversified means of bringing dollars in the door. When the usual avenues become crowded, what do we do? Build bridges over them.

Consider the specific skills your organization has and the types of funding you lack. For many organizations, the most difficult type of funding to obtain is for operations and overhead. Look for new ways to cover these expenses. If you have an amazing web developer, consider sharing his skills outside of your organization, bringing in new income that can help cover his salary. If there is another organization in your community with overlapping interests, share services, resources, contacts. Think of these as mutually beneficial relationships.


I've said it before, and I'll say it again, get back to the mission. As the number of organizations grow, overlapping missions is inevitable. So let's learn to share, partner and use this new competitive environment to our advantage by finding innovative strategies toward new funding opportunities.