The Paradox of Non-Profits
Here’s something many of us have noticed — nonprofits are challenged to stay focused on mission driven results. This is ironic given their singular purpose is mission, not profit. But this singular focus comes with unique challenges, including a lack of oversight, and slowness to change and adapt. There is research that backs this up, if you are interested. (Spoiler - it turns out most people need structure and real consequences to be accountable, and nonprofits fall short in these areas.)
I am reminded of a fundraiser for a decades-old nonprofit in Washington DC that had impacted policy for the better in the past. There were high energy speeches, but no mention of metrics of impact. It was more of a cheering session. It took a little while for me to realize this, because everyone seemed very happy. But there was nothing to celebrate — in a room full of donors, the organization’s lack of discipline was on display, strongly suggesting a lack of results. For all the criticism leveled at “for profits,” (mainly of the “boo capitalism!” variety), they are disciplined of necessity because they have concrete responsibility to stakeholders; their choices are to succeed, change quickly, or fail. What amounts to an investor presentation without any substance, such as the one I describe, is only tolerated in the nonprofit context.
The paradox is that because nonprofits are solely focused on mission, stakeholders are more likely to “give them a pass” when it comes to normal business approaches and disciplines needed to achieve results. Stakeholders, especially boards, donors, and other leaders, are susceptible to the hypnotic impacts of “service to mission,” which pulls attention away from results and the rigor needed to sustain impact. Sometimes this is exacerbated by “not understanding” the business model. They may (even) appreciate that the organization resists change, even when this comes with diminishing impact. What is going on when stakeholders more or less abdicate responsibility for nonprofits?
The “social” psychology that stops leaders from offering their best leadership to nonprofits – and how to interrupt it:
Your emotional connection to a nonprofit, and the many relationships that includes, creates a “we are family” feeling that comes with sensitivities around criticism, even if that means going against business standards and common sense. “Better to be quiet than lose all of my friends.’
As a wise person once told you →Your real friends will appreciate your honesty. The others were not your friends anyway.
Your identity may be so connected to the organization that its failure is your own failure. “I can’t really hear any criticism because this organization made me who I am. I just can’t go there.”
Your identity is tied to your character→ Organizations change and not always for the better, just like people. You only have control over how you respond.
You feel good about the organization and sad for it at the same time, creating a “halo effect” bias, and a “false victim mentality” that is paralyzing. “Their whole purpose is to do good, so they must be doing good” combined with “Obviously they are under terribly challenging circumstances. They never have the resources to do what they could. Poor things. How can I ask for more?”
This is exactly the tension that nonprofits are supposed to manage successfully→ They are mission driven to achieve what can be achieved (maximize value) in a sustainable way within the context of limited resources. If the current model (revenue, cost, impact) is not working, then that is the core business problem that the nonprofit has to solve.
Given the challenging context created by the nonprofit model, nonprofit organizations are more likely to flounder, falter and fail to thrive without actually failing. This “languishing” can go on for a very long time. But it doesn’t have to be that way.
Nonprofits with disciplined boards and management with the highest integrity predictably achieve excellent results. The best organizations deliver on mission because they (all) demand and expect a very high level of rigor and accountability. If you are paying attention and believe that your organization could do better, let’s talk.
Cindy
