The nonprofit sector often suffers from a propensity toward niceness. Indeed, according to a recent study by researchers at Stanford and two other business schools, nonprofits are perceived as “warm, generous and caring organizations, but lacking the competence to produce high-quality goods or services and run financially sound businesses.”
In other words, we think they are nice — but not competent.
But this perception stems from a reality that is often imposed on the sector. Nonprofits are encouraged to collaborate instead of compete, hold onto under-performing staff, accept martyr-like salaries, smile and nod when funders push them in tangential directions and keep quiet when government programs want the same services at a lower price.
This demand that the sector play “nice” is the result of (at least) two things. One is its focus on the social. The sector exists to address and (hopefully) solve social problems. Thus, by definition, it’s socially oriented and has a tendency toward an inclusive, consensus-based approach to doing business. Secondly, the sector is structured so that a nonprofit has many more constituents to answer to than its for-profit counterparts do.
For example, nonprofits have two customer groups, instead of the one customer for-profits have: 1)those who benefit from the services they provide (the clients) and 2)those who pay for those services (funders). And nonprofits are led by volunteer committees (board of directors) that need to be corralled. The end results is that funders, volunteers, board members, staff and clients must somehow be brought together and moved toward a common direction.
This demand to collaborate, build consensus — and play nice — probably helps explain the label of inefficiency that often is attached to the sector.
But in order to innovate and work toward real solutions, in order to get out from under consensus-based mediocrity, nonprofits need to break free from the niceness trap. They need to get meaner, uglier, messier.
In other words, they need to:
- Make an honest assessment of their core competencies, competitors and consumers so that they understand and can articulate where they fit in the marketplace — and make a market play if they can deliver a competing service more effectively. The end goal is to solve problems, not get along, right?
- Take more risks in how they deliver solutions and how they fund them. The status quo is not enough, so think big and act accordingly.
- Say no to funders who demand new programs or changes to programs that detract from the organization’s theory of change or core competencies.
- Diversify revenue streams so that they are not beholden to any one funder or funding stream.
- Demand that board members invest significant time and money in the organization, or get out.
- Fire under-performing staff. This is such a taboo in the sector, but with limited resources and mounting social problems to be addressed, do we really have time to invest in people who can’t deliver?
- Be brutally honest with funders, board members, others about the true costs of running operations effectively and don’t apologize for, or hide, administrative expenses
- Create a bold strategic plan that will drive the organization toward social impact and sustainability, not mediocrity.
Enough with the nice. If we’re really going to get things done, we have to take a stand, be bold, be honest — and do the right, hard thing.
Photo Credit: eyesplash Mikul
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