Nonprofits Are Businesses Too

Ben Loescher is an architect, educator, and evangelist on a mission to bring adobe into the modern age.

Like oil and water, the words nonprofit and business don’t mix very well — I can understand why this makes sense, but in my opinion, I find this belief to be very limiting and unfortunate for the nonprofit sector as a whole.

It’s disappointing to see nonprofits measured against their relative “overhead expenses.” The tagline that accompanies Charity Navigator in Google search results is “Perfectly Efficient Charities” which I think is completely bonkers and perpetuates a culture of playing it safe and not taking the risks that nonprofits should be taking.

Efficiency is a useful metric in some cases for sure, but isn’t there a better way? Efficiency is a pernicious incentive and hardly ever drives innovation. If businesses were judged by their efficiency, they would be more bankrupt than they already are (morally speaking). No Apple. No Nike. No Nothing.

When efficiency is the goal, instead of more revenue or impact, those who serve suffer. Why should we undervalue employees when their hard work is the engine that moves the mission forward?

“Making money shouldn’t be something that we’re ashamed of,” says Ben Loescher, principal of LMA and nonprofit leader of Adobe In Action and Adobe Is Not Software.

Making a difference should go hand in hand with making money, and ultimately, it should be a practice that donors can be proud of too. As a donor myself to some organizations, I enjoy helping those who are helping others. I feel good when I get to help the fundraiser do their work towards the mission.

The added benefit of being able to fairly compensate employees, improve their benefits and invest in their professional development also seems like a good reason to think about increasing revenue. Who can say no to retaining the best employees and reducing churn?

The stories we tell ourselves when it comes to making a difference really matter. Best practices should not be limited to our silos but instead aligned with the values that get us out of bed every single morning.

Here's to a Happy New Year, better than the last. 

Stay grounded,

—Reuben

p.s. - Interested in more Grounded Advice episodes? Watch them all here!

If you enjoyed (or hated) this article, you might appreciate some of my other rants including “Better Business Models For Nonprofits.”