To the Editor:
Phil Buchanan is right that nonprofits aren’t “broken,” (“Technology Start-Ups Don’t Hold All the Answers for ‘Broken’ Nonprofits,” Opinion, January 22) and it’s more than annoying to hear this over and over from people who often know little or nothing about how nonprofits actually operate.
In the San Francisco Bay Area, this trope is getting old fast, but in fact, the comment has been around for decades. Some tech-sector leaders are making the classic marketing error of thinking that everyone in the market is the same as they are, the “I like the ad therefore everyone else will too” syndrome.
But they are not representative of all the donors, all the staff, all the clients, all the members, all the volunteers involved in the entire nonprofit sector, so their generalizations, comments, and judgments are wrong and also remarkably uninformed.
And as every day we read stories about the tech sector’s giant and luxurious offices and free three-meals-a-day gourmet cafés with 24-hour beer and indoor games and much more, it’s quite annoying to hear people like Ryan Seashore talk about nonprofits having “too much overhead.”
I’d like to see them share an office with two other people in the small bedroom of an historic home converted to a nonprofit headquarters, or in a church basement, or a corner of a warehouse in a sketchy part of town. I’ve interviewed countless people from the tech sector who want to work at a nonprofit because they think it will be easier and less stressful, making it clear that they know nothing about the organization’s pace and the job requirements, where “do more with way less than your for-profit counterpart would ever have” is the mantra of the day.
Lately, the arrogance of “we know better because we got VCs to invest millions in our app idea” has become the loudest voice in the room, despite often having the least amount of information or actual experience. I’ve had the chance to work with some amazing people from the tech sector who bring their considerable skills to a new field and are eager to understand the nonprofit sector so they can advance the mission of the cause they care about, and contribute as leaders. I applaud them. They do bring new ideas and approaches to these organizations.
Sometimes these ideas are very helpful and worthwhile; other times, the ideas are not workable or require vast resources beyond what any nonprofit would have, and they adapt their ideas to find something that will work.
Just as successfully running a for-profit business doesn’t mean you will necessarily be good at leading a government entity, so success in the for-profit world is not always related to success in the nonprofit sector. Here’s why:
Nonprofit markets are more diverse.
Many nonprofits serve clients who are not and will never be their donors, so nonprofit staffs have to understand the varied rationales that donors have for giving (tangible and intangible) while at the same time ensuring that programs are effective for people who are involved but are not donors. In contrast, almost every for-profit interaction with a customer or an investor requires a financial transaction from which the other party benefits directly, by receiving the goods or services themselves or by acquiring an ownership position.
For-profit staffs sell to people who receive financial benefits, and I’d like to see how well they would do at “selling to” or soliciting gifts from people who don’t receive direct financial benefits.
Nonprofits require constant balancing of multilevel management.
In the for-profit world, you have a boss and your boss has a boss, but ultimately you have only one boss: shareholders. Companies like to say their customers are their bosses and their most important asset is their people, but there are vast numbers of cases in which for-profits have gone against the best interests of their customers (not to mention employees) to make their investors happy. Nonprofits, on the other hand, must serve multiple “bosses.”
Staff members do have bosses and serve the boss’s boss, but most nonprofit staffs have multiple managers they must work with and ultimately please: board members, committee members, key volunteers, funders, individual members and donors, event chairs, corporate sponsors, foundation officers.
The world of nonprofit ethics is filled with such conflicts, in which the executive director finds herself balancing conflicting needs between the board member and the major donor, and often there is a leadership volunteer and a key staff member in the equation as well. Try running a nonprofit where you consistently ignore the needs of your major donors or key volunteers and you will find yourself either out of a job or in an unsustainable organization.
MBA students should learn from practitioners.
Students should learn about the field in business school. Though few of them may enter the nonprofit field as staff members, they will be better prepared to serve on boards of directors or as trustees for nonprofit causes they care about.
But they should be taught at least in part by active practitioners, people who actually run nonprofit organizations— who raise funds; who manage nonprofit marketing; who understand nonprofit finance, ethics, and complex gift accounting regulations.
Aiming for more academics to teach in this field is a nice long-term goal, but in the short term, there are legions of talented people who know how to do this work, who could marry their depth of experience with scholarly research and provide a more rigorous and practical approach to education in the field.
This needs to be talked about in places beyond The Chronicle of Philanthropy — a TED talk, or maybe an enlightened for-profit leader who actually understands the nonprofit sector needs to speak out.
Theresa Nelson
Oakland, Calif.