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Non-Profits: Issues & Opportunities

June 13, 2011 - Ernest Hohmeyer
There has been a great deal of discussion over the last several years related to local non-profit organizations.

Mission or Personality Driven?

The nonprofit world is a huge one ranging from community organizations to local government. To qualify as a nonprofit most are mission-based i.e. they serve some social, economic, educational or community benefit.

Yet, when issues arise they are often caged in terms of funding, leadership or personalities. Often not as prevalent is a public discussion on their overall purpose. Are nonprofits mission-based or personality driven? How similar are they to running a business and do some of the principles of business apply to nonprofits?

Many businesses during the recession have been forced to consolidate and do more with less in an environment where customer expectations are higher than ever. If we could vote today, would most of us vote for the current matrix of our local non-profit life – and this question extends from public run non-profits to private?

Lessons Learned

It was a warm November day 26 years ago when I became the founding director of a local economic development group. Bright eyed with a full set of hair back then I came in full of energy and a whole slew of ideas. I was going to spur the health of not only our local communities but the entire Adirondack Park.

Thank goodness I worked for a board of directors who kept me focused.

I also came to learn that my entrepreneurial background offered many lessons that I could apply to the non-profit world.

For example, together and with a series of partners that ranged from businesses to environmental organizations, from local representatives to federal officials, we came to understand that the communities and the economy of the Park were changing.

By asking many questions of members of the community, experts in rural economic development and others, we came to understand that while the need to stimulate the economy remained the same, how you did that had changed dramatically.

Several times over the 22 years I was involved first as director and then later as president we asked ourselves the question “Is our mission still valid and do we have the right people to carry out our objectives." We asked that question not only of me and our staff, but of the Board of Directors as well as our key customers. Several times we had to "reinvent” the organization to meet new opportunities and challenges and to tweak our mission.

Even more difficult was the larger question if we were even the right organization to take on these challenges.

I came to realize that the nonprofit world in many ways is not much different than the business world. A big mistake often heard amongst failing businesses is that they became entrenched in a business plan or mission that was out of date or no longer served a need large enough to continue the operation of the company.

Our communities and businesses are connected to a living environment. As such things change. Even you change and the opportunities and needs of your customers change. Think of the level of things we expect – or even feel entitled to – that are far greater and different than our parents.

Business & Non-profits

Today it seems you need to balance the gospel of business such as a value product and good customer service with being ready to adapt to almost instantaneously changing customer needs – or habits. Our biggest threat today besides a fickle economy is how to keep up with the changing nature of information technology.

Sometimes we may have to ask ourselves the question " is how we do and what we do – obsolete." This is not to say that our mission is obsolete. For example, there is still a need for "providing a quality Adirondack resort experience” or “business assistance” but the “what and how” we do this may change.

Has there been sufficient discussion on the need and mission of our private and public non-profits?

While you often hear about nonprofit organizations whether they be private or public being responsible for their mission, the reality is that often they are driven by personalities. These leaders flavor the mission.

Often, this can be a good thing as in many cases we may buy from a local store because we enjoy the personality of the business. Price becomes secondary which is often a direct outcome of “owner ambience.” Sometimes, this can be a bad thing that while they may have a better price we will not go into the store because we feel uncomfortable.

In some cases the leadership or personality of a nonprofit can vacillate between a strong board and a strong director.

Depending on the cast of characters this can change.

Just like in business however, there are several principles in the nonprofit world that from my experience you need to adhere to. These include - trust, - transparency, - clarity of mission, - an active partnership between board and staff, - a clear fiduciary responsibility with checks and balances, - agreed-upon milestones and benchmarks and - perhaps above all a need(s) that are clearly identified by your key customers, taxpayers or members.

Just like businesses, nonprofits public and private, need to reinvent themselves. In today's world of instant communication, social raves and natural disasters it is perhaps more important than ever to do so.

New Realities & Opportunities

In Macrowikonomics: Rebooting Business & The World, Tapscott and Williams talk about how “On one hand, many of the institutions that have served us well for decades – even centuries – seemed frozen and unable to move forward.” They postulate further about “we're not talking about tinkering at the margins, but about reinventing and overhauling crumbling institutions and outmoded ways of working."

How can this become a reality in our community organizations?

Tapscott & Williams suggests six rules. Among them: • Don't think of yourself only as someone taking an initiative. “Instead, become the curator, someone who creates… a platform that allows other people to self organize and create things that are valuable both for you and them…”

• Collaborate

• Let go. You need to “encourage people to organize themselves to help you solve problems and come up with new ideas.”

• Encourage “enthusiasts" by providing “incentives, recognizing excellence in promoting talented individuals to positions of leadership.”

• And finally here's one that is interesting due to our aging population: “Empower the Net Generation.” “Collaboration comes naturally to them, and wise leaders can leverage this by empowering young people to help lead the process of reinvention.”

Courage to Ask

With some of our private and public nonprofits is it really an issue of mandates, tax base, budgets or personalities? Or is it that the “what and how” of their overall mission needs to change – or be consolidated, perhaps even eliminated - to meet the new opportunities and challenges of tomorrow’s world?

I wonder if we could consider a new definition of nonprofit success: “We were so successful in meeting our mission we outlived our purpose.”

After all, look at Saranac Lake following the cure cottage days – it is still very much alive.


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