Perhaps We’ve Got it Backward: Businesses Are Turning to Nonprofit Practices

Photo credit to agentgenius.com

More and more for-profit companies are beginning to function like nonprofits– and perhaps for good reason. It seems that nonprofits are becoming less like slow-to-pick-up organizations, and a little bit more like the sector that’s onto the trends.

There’s a lot of talk about how nonprofits gain by functioning more like businesses. Among other things, nonprofits must keep up with the innovation taking place in the for-profit sector, or nonprofits will be weeded out by for-profit competition.  But  nonprofits are not the only ones looking to other sectors for inspiration. In fact, nonprofits have a few things going for them right now that for-profit companies seem to really want:

1. Competition

Companies will need social missions to attract the next generation of customers. In fact, according to a USA Today article, 69% of Gen Yers consider a company’s social commitment when deciding where to shop, and 83% will trust a company more if it is socially responsible– and that’s just attracting customers! Companies will need to step it up a notch if they want to hire new MBAs and MPAs (whom are increasingly socially conscious, by the way). The next generation is civic-minded and cautious in regard to where and how they spend their time. And on top of all this, the human race as a whole is evolving into beings that value kindness.

Companies are already publicly rising to the occasion and deep-rooting their identities in crowdsourced cause marketing. The Pepsi Refresh Project, American Express Members Project, Google Project 10^100, Chase Community Giving, and Target’s Bullseye Gives may be just the tip of the big-companies-crowdsourcing-for-social-good iceberg. Not only are these companies recognizing their need to “do good,” but they are making it a part of their social identity by fostering communication and asking communities to participate in choosing where their money goes. Recently, this has helped for-profits build up legitimacy in yet another area where nonprofits (as opposed to for-profits) are known to shine…

2. Communication-

Nonprofits are said to be kicking private sector booty in building relationships through social media. They have quickly taken up this way of telling stories and spreading social missions. Sure, social media has its serious pluses for nonprofit organizations: it’s generally affordable, it can be done by a volunteer, and site visits and bit.ly clicks are measurable (an often-rare quality for activities taken up by nonprofit organizations). But most of all, social media is a hit for nonprofits because the ability to connect, ignite excitement or empathy, and create and maintain strong interpersonal connections has always been an element of survival for nonprofits– both on the administrative end and in the front lines. The community engagement– as well as individual connections– that nonprofits are often able to summon is an object of desire for private companies in the evolving world. The days of putting a product into the world with an overarching one-way message are coming to an end. During this time, companies will need to steal and ingrain the nonprofit practice of building meaningful connections in order to thrive.

3. Costs

Amazon’s Jeff Bezos is credited for saying, “I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.” This could have come out of the mouth of any nonprofit CEO out there. Granted, the for-profit sector has an arguably greater ability to take risks than nonprofit organizations, which have several stakeholders and constraints beyond the budget. Bill Gates proved that scrappiness and frugality were the way to go back in 1976 when he created Microsoft. In fact, Guy Kawasaki dedicates an entire chapter in his book, The Art of The Start, to bootstrapping. In the current economic climate, there’s a need for businesses to reevaluate spending. In this case, it is less that businesses want to be more like nonprofit organizations– they have to be.

Nonprofits are not often thought to be business trend-setters. Perhaps that’s why the nonprofit sector– as a whole– don’t seem to take the time to pat themselves on the back. Right now, nonprofits are onto something. Social missions are in. Personal connections are in. Even endearing scrappiness is in.  Instead of looking longing at the for-profit sector’s freedom and financials when it comes time to allocate resources or cut already-decreased spending in nonprofit organizations, we should take a moment to focus on the sector’s incredible strengths. Nonprofits, it turns out, are teaching private companies a thing or two about how to connect to communities and champion a good cause.

I owe a thank you to Dr. Peter Robertson, a professor of organizational behavior within USC’s School of Policy, Planning, and Development, for raising an eyebrow and saying, “I think in the future businesses will function as nonprofits,” when I spoke nonchalantly about nonprofit evolution to private sector practices during a recent meeting.

Posted on by Colleen Dilenschneider in Trends 5 Comments

About the author

Colleen Dilenschneider

MPA. Chief Market Engagement Officer at IMPACTS Research & Development. Nonprofit marketer, Generation Y museum, zoo & aquarium writer/speaker, web engagement geek, data nerd, marathoner, nomad, herbivore

5 Responses to Perhaps We’ve Got it Backward: Businesses Are Turning to Nonprofit Practices

  1. Elaine Fogel

    Good ideas here, Colleen. I’m not so sure that getting into social media makes nonprofits more business minded. Many are doing it because they think it’s inexpensive and it’s the “thing to do.” I’d like to see a study that tells us how many of these organizations have marketing plans or social media strategies. I wouldn’t put money on it. 🙁

     
  2. colleendilen

    Hi Elaine,

    I probably wouldn’t put money on too many nonprofits (particularly smaller ones) having clear-cut social media strategies either. 🙁

    I agree that getting into social media doesn’t make nonprofits business-minded. I think, rather, that getting into social media is something that nonprofits have been good at doing (for the reasons you mention: it’s inexpensive and easy– even despite a potential lack of marketing plan), and that gives them a leg-up on businesses. In other words, social media is an area in which nonprofits have staked some ground, and businesses might do well to continue following nonprofits’ lead in this arena.

    Thanks so much for your comment!

     
  3. thirdsectorwi

    I love this post – for all of the “nonprofits should act more like businesses” posts out there…this is a refreshing addition. I agree that it is much easier for nonprofits to have an authentic voice when using social media. I’m happy you’re spotlighting this – hopefully it will motivate nonprofits who’ve been a little gun shy around social media to dive in.

     
    • colleendilen

      Thanks so much for the comment! I hope it helps nonprofits that that have been a bit gun shy to dive in as well. Thanks for the awesome support! I really appreciate it!

       
  4. Corina M. Paraschiv

    That’s really interesting — I had heard of the opposite – how non-for-profits were trying to imitate for profit-companies — but not the opposite!

    I know it supports the “opposite” side of the story but I thought it might still be interesting to share: financial times had a whole report/portal dedicated to the topic three years ago (I think the articles are still relevant today) : http://www.ft.com/reports/philanthropy2007

    One thing though I have to add. I have led both non-for-profit (as in volunteer!) organizations and for-profit businesses (social entrepreneurship, but still) and the truth is I don’t find there’s such a huge discrepancy between the two at the end of the day. I mean I know a lot of people would say the objectives and constraints aren’t the same but honestly a lot of concepts in both marketing and in management are essentially transferable. So in many ways I totally think non-for-profits should get both a little bit more recognition and be taken a little bit more seriously in terms of the “best practices” (like the ones you mention here) — I find it odd business schools only cover for-profit success stories all the time in MBA classes! Non-for-profits are just as hard (if not harder!) to navigate and succeed in! (and volunteer organizations even more because if you haven’t got leadership then you don’t really have any other way to motivate people because volunteers don’t get paid).

    I definitely agree that businesses have lots to learn from the non-for-profit sector! We’re not worlds apart!

     

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