I have spent the bulk of my working life in the non-profit sector, and I will defend its importance to the nth degree. Non-profits are an important part of our civil society, providing vital services and goods in ways that the private and public sectors cannot deliver. Nonetheless, there are built-in challenges that make managing and working in the non-profit sector something less than a dreamy paradise. Here are three:
The separation of revenue from services & products
Most non-profits have some charitable or educational mission. Inherent in the non-profit model is that the users and beneficiaries of services or products offered by non-profits will not have to pay a market rate for them. In fact, they may not have to pay anything at all.
A soup kitchen isn’t going to charge its guests for their meal. A research center probably won’t charge visitors to its website who download its studies. An animal shelter isn’t going to charge its critters…okay, you get the point.
Even many private universities depend on charitable contributions to meet budget needs not covered by tuition revenue. The same can be said for museums and their admissions fees.
It means that most non-profits not only have to offer services and/or products, but also must separately raise most of the money in order to provide them. That’s a huge added amount of work. By comparison, the private business model is based on charging what the market will bear for goods and services. And while government agencies must vie for tax dollars, the taxation system substitutes for having to raise the money itself.
In order to qualify as a tax-exempt, charitable corporation, a board of directors must be formed to oversee the organization. The relationship between a non-profit’s staff and its board of directors can be a tricky, delicate balancing act at times.
Staff/board relationships vary widely in terms of involvement and interaction. Some organizations, especially small, grassroots groups, are designed with the intention of staff and board working closely together. Others assume more of an oversight role by the board, limited to addressing big picture issues.
One of the most challenging situations is when board members who lack familiarity with, and respect for, the nature and culture of the non-profit nevertheless believe that their own experiences in a different sector allow them to pontificate and impose their ideas upon the staff. The “let’s run it more like a business” theme appears often here, typically with little understanding of the non-profit world. (I can only imagine their reaction if someone told them, “You know, I think you should run your business more like a good non-profit.”)
Appeals to idealism and a desire to serve are inherent in the attraction of working in the non-profit sector, and many of us who have spent our careers in this realm understand how those higher aspirations can be realized.
But it doesn’t mean that all non-profits are well managed and treat their employees with respect and dignity. Too many non-profits assume that their noble mission means that quality of work life can be treated as a lesser priority. Exploitation in the name of the “cause” is not unusual in non-profits, and in worst case scenarios, incivility, bullying, and harassment are part of the work experience.
A good number of non-profit leaders were promoted to their positions not because of their leadership and management ability, but rather because they excelled at some other tasks related to the non-profit’s core mission. Some will succeed because the characteristics of good leaders were within them. Others will fail, resulting in a mismatch of skill sets that can make for unpleasant workplaces.
If you’d like to read more about this topic, I’ve collected a cluster of related posts that dig into the details: