"RUN IT MORE LIKE A BUSINESS!!!"
For years the leadership of a private not-for-profit agency heard people
tell them that they should behave “more like a business”. They
heard this from their friends, who thought they were “giving away the
store” when they provided service above and beyond that required by
contract. They heard it from potential donors and grantors who
wanted them to “tighten things up” and increase their accounting
requirements, and they heard it from candidates for MIS and financial
positions when they offered them “non-profit type” salaries. Then,
they heard it from their own staff when the for-profit organization down
the street used its large marketing budget to promote itself to
clientele whom the non-profit had previously worked with on a
fee-for-service basis.
They heard that they should expand and compete vigorously, give away
less, and maintain a large and formal bureaucracy. And they did
it.
Soon they had an accounting department to whom each and every expense
was reported three separate times with varying forms of substantiation.
Their outside accountants, and those of the relevant government agencies
were very happy.
Not long thereafter, they established a Legal and Contracts department.
They no longer “gave away the store”. Payers could be sure to get
exactly what they paid for. The in-house accounting department was
pleased and everyone knew exactly what was expected of them. And
that’s what they did. Just what was expected of them.
They shifted some of their budget from product to marketing and
expansion, better enabling them to combat the efforts of the
competition. After all, who would utilize their great product if
people never heard about it or couldn’t reach it?
Then something funny happened, the pendulum swung back. The front
line staff began expressing resentment about the dollars going to
marketing and expansion instead of their salaries, or other direct
service costs.
They heard from their own middle management personnel who objected to
the time being drained from their staff as they completed accounting
paperwork, and waited for decisions from Contracts. These managers
also found the paradigm of following the “letter of the law” trickling
to their front line staff who would do exactly what they were paid and
told to do—and no more.
Finally, they heard it from those who donated money, issued grants, and
signed purchase of service agreements when they said “You’re too greedy.
When are you going to start acting like a non-profit?”