Shaping Healthy Non-Profits: Part I

By John A. Haas
Management Strategies Group

Whether in education, healthcare, the arts, community service or religious institutions, non-profit organizations are different!

• The "bottom line" value is realizing a social mission, not profits.
• Staff is passionate about the mission, often over financial considerations.
• Staff is often highly diverse in race, ethnicity, socio- economic levels, values and perspectives.
• Volunteers that help regular staff and serve on various program committees must be recruited and managed. Still, they're volunteers.
• Many interested constituencies expect to be heard and involved in making decisions.
• The Board and CEO must engage in fundraising. The CEO must balance this with time for planning, managing and leading.
• Funding sources must be continually "stroked," to generate new and assure ongoing interest and, ultimately, funding.
• The Board includes successful businesspeople, challenged to assure sustainable pursuit of the mission by largely non business-oriented staff and volunteers.
• They deal with highly complex needs and issues with small staffs and budgets.

Organization Development Challenges

These realities can make non-profits inherently "inefficient." The CEO can't control the "organizational levers" that for-profit CEOs can, even in today's more inclusive organizational environments. Attempts to use such levers frequently backfire with dramatic consequences.

For example, The Board of a highly respected college for healthcare professionals that was experiencing operating deficits, named one of its members interim CEO to re-establish financial stability. An alumnus with considerable entrepreneurial experience, the new CEO did some further analysis, consulted faculty and administrators, saw many improvement opportunities and took quick actions, which he carefully explained to all major constituencies. Within a couple of years the college did return to financial viability.

The problem was he made organization, staffing and program change decisions from a "business" viewpoint, without what was perceived as adequate involvement of key constituencies impacted by these decisions. The result: public outcry within the college, threatened faculty and student actions, and covert efforts to undermine the interim CEO's leadership. Time-consuming "repair" efforts are currently underway, in a distrustful atmosphere.

* * * * *

More non-profits are being created to meet unfilled societal needs. They are all seeking sustainable and renewal funding and staffing resources. With resource demand outpacing available supply, non-profits will need to develop creative approaches to organizing and marketing their efforts. I will suggest some ways to meet these challenges in the Fall issue of Productivity Reports.

Summer 2002 -Volume 12, Number 3