Three Impactful Lessons Non-Profits can Learn from Commercial Businesses

Published on 15th January 2020

One would assume that the basics of leading people is the same regardless of what industry one sits in, commercial or not for profit. It is however safe to say that commercial organizations may tend to take a heavier handed approach to output, delivery and profits than not for profit organizations.

For profit organizations are rewarded on their performance or profitability results which include turnover, market share, stock prices, and so on. For Nonprofits however, it can be difficult to objectively measure success using the parameters above. However, with careful planning and a habit of measuring impact against a clearly defined quantitative strategy, it is possible.

Some argue that not for profits are unable to provide quality quantative data as a yardstick for measuring success but we beg to differ-the
secret lies in the strategy and the objectives set at the beginning of the year. If you can work towards a number, then you can measure it. E.g. To reduce childhood poverty by 100,000 in 3 years versus to reduce childhood poverty.

While nonprofits may have not been specific in the past, this is slowly changing. There is now increasing pressure on non-profits to deliver and demonstrate results. The emergence of the value for money framework, cost transparency and public accountability have shone a light not only on delivery but on reporting impact in the sector.

Corporate social responsibility initiatives are also breaking new ground in terms of company’s engagement with society. Caring for the society and the vulnerable is no longer the preserve of the governments and the non-profits. For example, there are cases of multinational giants who have launched mentoring programs for the youth in deprived communities as a means of empowering the community and ultimately reducing poverty.

Another nonprofit organization now defines its purpose as improving “the lives of the world’s consumers, now and for generations to come.” In 2009, the company launched a new business strategy, called “purpose-inspired growth” to “improve more lives in more places more completely.”

Entrepreneurs are creating businesses that reflect their social and environmental values shaping the core purpose. Anita Roddick’s Body Shop’s involvement in activism and campaigning for environmental and social issues including involvement with Greenpeace and The Big Issue are well known. In 1990, Roddick founded Children On the Edge, a charitable organisation which helps disadvantaged children in
Eastern Europe and Asia.

These are a few examples and there are lots more. Non-profit leaders therefore need to come to terms with the fact that they cannot take their donors and public support for granted. Good intentions and promises that sustained them in the past will no longer be enough. One of the reasons why the non-profit sector growth may have stagnated is the (perceived) success non-profits have had in the past. Despite not having clear measures and benchmarks to achieve, there is no denying that some of the work done by non-profits have made immense impacts on the lives of millions of people all over the world. However, the future cannot be seen as an extrapolated extension of the past.

There are three critical issues that require decisive input from non-profit leaders, drawing lessons from the business sector:

1. Redefining the Core Purpose: The basic needs of the poor and vulnerable may not have changed, not for profit organizations are still tasked with examining the basis for their existence and the edge that they bring to the intervention with assisting civil society. As important as it is to define ones Core purpose, it is almost equally important to ensure that the workforce buy into this purpose and can
communicate and implement this purpose at every given opportunity. Lastly, the purpose needs to be revisited continuously in order to remain relevant in the ever changing world.

2. Defining Performance Measures and Success Indicators: It is important to note that if your core purpose remains vague, such as ‘helping the poor’, the organisation may never know if and when it achieves its purpose. A clearly defined purpose, clear goals, objectives and mission statements make it easier to measure and assess the impact of your work. Investing in a suitably qualified impact assessment or Monitoring and Evaluation team is a great place to start once quantative goals have been set.

3. Knowing Your Collaborators and Competitors: Not for profits need to know that they are no longer competing among themselves. Corporates and other enterprises are now beginning to set benchmarks which have the potential to transform the entire non-profit sector landscape for the better. These offer new opportunities for collaboration at least.
Findev Consulting Limited is a UK based consultancy that provides grant management training to NGOs and civil society organisation. We have worked with numerous nonprofits across 3 continents, focusing on proposal development, strategic planning and project evaluation.