As someone who has spent the last 25 years in the nonprofit sector and the 15 before that toiling in various and sundry for profit endeavors, I would be the first to say there is a definite difference between the two. And, I would add, these differences are typically not the ones for profit folks think they are. In fact, most for profit managers who slide into big not for profit jobs succeed only if they slide into the few not for profits that have operating budgets exceeding $10 million dollars. Those that come into the grass roots arena fail miserably.
Board members for these smaller nonprofits also often fail–as they measure success by for profit standards–making money–and provide the resources to do so at what they perceive to be not for profit standards.
Not long ago I sat through a board meeting where the finance chair and the board chair talked how overhead at the nonprofit was too high. They had decided, they announced, that staff–already leaner than it needed to be–would be cut, as would the salaries of the staff left standing. Or crouching, hands over their faces, wondering how they would be able to do already difficult jobs AND manage to pay rent (buying a home, unless one spouse works in a different sector is often an impossible dream), feed and clothe their families. And no, I’m (alas) not being dramatic.
For profit thinking wants nonprofit activities to be robust–but it doesn’t provide for the bare resources (human and otherwise) necessary to do a good job. While I’m on my soapbox, let’s talk staff pay. Why do otherwise intelligent board members think it is ok to pay professional staff at the level of their high school or college age kids allowances? Does anyone really think that a passion for the mission is really enough? I used to get really annoyed at ED’s who would tell me they wanted a seasoned development professional and the salary was $40,000. What, I would think, are they smoking? Until I looked more carefully at the 990 and saw what THEY were earning for a job and a half or more.
I see colleagues going on and on whether we should continue calling ourselves nonprofits because of the negativity that connotes. It’s a ridiculous argument that avoids the bigger challenge to the nonprofit sector–the inability to accomplish what must be accomplished given the scant resources we have.
It begs the question of why salaries have to be so low. There has been loads of conversation about “overhead” lately, and for that I am grateful. But as long as the conversation continues, we are talking and not doing.
Board members need to do their job–to ensure that the organization has the wherewithal to accomplish its mission. Boards must have clarity (and reality) about their expectations and then ensure that there is appropriate staff who are paid reasonably and have necessary benefits to do the job they are expected to do.
Anything less is unfair to everyone who works in or relies on the nonprofit sector.
Janet Levine works with nonprofits, helping them to increase their fundraising capacity, build stronger boards and more effective staff. Learn more at www.janetlevineconsulting.com. While there, sign up for the newsletter