The Nonprofit Atlas



Bridging The Gap: Lessons Learned From The Intersection Of For-Profit And Nonprofit Sectors

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Tom Ulbrich, Forbes Councils Member | Forbes Nonprofit Council


I have always been fascinated by doing business at the intersection of the for-profit and nonprofit business worlds. The line between these sectors is increasingly blurred, and there is a clear opportunity for them to learn from each other.

I’ve noticed a trend in recent years: Nonprofits are increasingly becoming more entrepreneurial with the goal of being less dependent on the constant hunt for funding. Meanwhile, for-profits are increasingly being pushed to broaden their measures of success to include a triple-bottom-line approach that includes people, planet and profit.

I regularly speak with and communicate on LinkedIn with a diverse group of both for-profit and nonprofit business leaders. As you might imagine, there is a wide-ranging set of ideas about how the two sectors might learn from each other.

Nonprofits Can Benefit From Adopting For-Profit Best Practices

Nonprofits play an important role in society, encompassing organizations from government to education to charitable work. They often fill a void that for-profit businesses can’t.

Too often, nonprofits create aspirational visions with little thought as to their ability to achieve them given limited resources and capacity. In some cases, their heart-driven pursuit of a mission can lead them to lose sight of the true costs of running their business.

Best practices that nonprofit leaders may adopt from the for-profit sector include the following:

• Create business alignment around shared strategic goals that give thought to your organization’s true capacity. This can help you achieve results with current resources or help you develop new capabilities needed to achieve your longer-term vision.

 Use competitive analysis to understand who you are competing with for limited funding. This may help refine your mission and deploy finite resources for maximum impact.

• Embrace data-informed decision-making to understand the true costs and benefits of programs to help funnel resources to areas with the highest mission impact. At the same time, diversify revenue streams to become less dependent on limited sources.

• Utilize customer discovery, actively speaking with a broad base of stakeholders that may fund or utilize your programs in an effort to make sure the market needs and wants what you have or plan to offer.

• Embrace operational efficiencies that are supported by standard operating procedures, repeatable systems and checklists. These efficiencies make your program dollars go further, serving more people for less.

• Discover innovative solutions to both internal and external challenges. In today’s rapidly evolving world, you need to bake innovation and creative problem-solving into your organizational DNA. You will be rewarded with new energy, new ideas and potential new revenue streams.

• Work to build a “best place to work” culture that includes competitive pay, great benefits and a great work environment to attract and retain top talent. Your people are your true competitive advantage, and you are smart to invest well here.

• Embrace a culture of accountability (with constant coaching), and you will have a happier workplace. When team members have clear expectations and coaching, productivity soars.

For-Profits Can Benefit By Focusing On Mission And Impact

There has been much debate and discussion about the evolving role of for-profit businesses in society. Maximizing shareholder value remains a defining factor of any successful CEO’s tenure, yet there is increasing pressure to account for a business’s impact on people (including community, customers and employees) and the environment.

For-profit businesses that fail to broaden their definition of success beyond purely dollars and cents will likely suffer as consumers “vote with their feet.” But there is hope and perhaps a next and better way of doing business when we look at embracing some aspects of the social sector.

Best practices that for-profits may adopt from the nonprofit sector include the following:

• Broaden the definition of success. Measure profit not solely by the bottom line but also by your investment in the communities you serve. Consider how empathy, social responsibility and long-term community impact are the right thing to do and can lead to increased profitability.

• Humanize your business. You must go beyond the Friday paycheck. Work to tie employees to the company’s purpose. I assure you that if you have a successful business it is because of much more than just making money.

• Engage your workforce by celebrating successes and creating a culture of storytelling about how your product or service benefits the customers who use it.

• Embrace and amplify the importance of trauma-informed approaches that include principles of safety, trustworthiness, choice, collaboration and empowerment in the workplace. Although increasingly more discussed, the word “trauma” is foreign and scary for many for-profit business leaders as it is often misconstrued. Consider rephrasing the discussion around the mentality that “behind every face, there is a story that we don’t fully know or see.” It is worth the effort as these approaches foster a culture and environment conducive to authenticity, positive morale and organizational effectiveness.

Shifting Perspectives, Cultivating Innovation And Building Momentum

We are in a period of shifting perspectives with the opportunity to address the systemic issues of our time through social innovation. I believe that we have only begun to scratch the surface of the potential synergies that will be afforded to us through this cross-sector collaboration.

The potential for cross-sector collaboration to drive meaningful change is great. Conversations are increasing, entrepreneurial nonprofits are thriving and socially minded for-profit businesses are gaining competitive advantage.

There is a mostly silent but growing movement to build organizations that blend the best of both worlds through the rapidly emerging field of social innovation. Momentum is building, and it is important that we continue to have an ongoing dialogue that encourages the potential to drive meaningful change at the intersection.

By sharing experience and insights and engaging in discussions, we can collectively foster cross-sector collaboration.


Source:  Forbes


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