Leading for a cause, not a profit

Jeffrey W. Steed

The time is now for nonprofit leadership to re-examine themselves and the crucial roles that they play in society.

Society in general seems to think from a for-profit standpoint.

But key differences set nonprofits apart from the for-profit world.

Human betterment is at the forefront of the nonprofit leader’s role.

No matter the method, the bottom line is human betterment versus personal financial gain.

At a nonprofit, for example, strategic planning is human-centered rather than profit-centered.

Human-centered strategic planning includes looking at the vision, or the overall purpose within the next decade; the mission, or the specific services of meeting human needs to fulfill the vision; and the objectives, or the specific timetable of events needed to develop the organization’s services defined by its mission.

Nonprofit leaders also should keep in mind that the investments entrusted to their organization’s management are funds typically invested by donors.

For-profit organizations, in comparison, are often managing their own funds made from profits.

And at a nonprofit, the marketing focus is cause-driven rather than trying to impact revenue and profit growth.

Typically, nonprofit marketing focuses on fund obtainment by attracting new donor relationships and maintaining current donor relationships.

Nonprofit marketing should help stir the existing passions of potential donors who have an interest in the nonprofit’s vision.

The purpose of nonprofit marketing is not to attempt to create a perceptual need within a consumer’s mind, but to help provide awareness of charitable opportunities as a means to help interested donors connect their passions to the underlying work of the nonprofit.

Many nonprofit leaders and constituents oppose basic staff compensation on comparable data for for-profit organizations

But as Dan Pallota argues in his book, Uncharitable: How Restraints on Nonprofits Undermine Their Potential, when a nonprofit leader is trying to hire the best minds to optimize impact, compensation that is lower than at for-profit organizations may cause the best minds to look only in the for-profit sector.

For-profit organizations attempt to maximize profit, while nonprofits manage finances to at least break even.

Because they do not have to focus on maximizing profit, nonprofit leaders can maximize their time attempting to achieve the underlying vision and mission of the
organization that addresses human need.

While their roles can become blurred because of the social pressures their organizations face to be more like for-profit organizations, nonprofit leaders must remember their distinct role nonprofits play in society.

Jeffrey W. Steed is vice president of the Arkansas Baptist Foundation and Christian Ministry Services.

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