Platt Perspective on Business and Technology

Leading a nonprofit 8: some implications of the nonprofit funding base as donor’s discretionary income

Posted in career development, job search and career development, nonprofits by Timothy Platt on November 22, 2012

This is my eighth installment in a new series on leading a nonprofit (see my Guide to Effective Job Search and Career Development – 2, postings 267-273 for Parts 1-7.) As I noted in Part 7: benchmarking and keeping the organization focused and effective, my goal here has been to focus on issues and perspectives that are particular to leading a nonprofit organization, as I have already been posting fairly extensively on executive level management and leadership per se. And with that point noted, I turn in this posting to consider what in many respects is the central, defining issue that would set nonprofit leadership apart from leadership of any other type of organization: for profit or not for profit in the private sector or leadership of a governmental organization or agency in the public sector.

• Nonprofits are mission and vision driven, and mission and vision-oriented sources of direct value that are created through the organization almost always go to different individuals and families than the ones who donate the funds that would enable those direct benefits. Donors, I add, make their contributions in this from what they can be brought to see as their available discretionary income.
• So in a very fundamental sense, and looking at this from the perspective of the people who make donations and who provide the nonprofit’s incoming revenue streams, nonprofits are in the business of creating and providing a sustaining sense of hope.
• Nonprofits are in the hope business, and that ultimately is their product and service, and even as they actually succeed in taking successful steps towards specifically fulfilling their overall mission and vision statement goals.

I find myself thinking of healthcare-oriented nonprofits that I have worked with as I write this, and particularly The Leukemia & Lymphoma Society. And I find myself thinking of educational opportunity and community development oriented nonprofits that I have worked with too, and in that regard I find myself thinking of Per Scholas.

The Leukemia & Lymphoma Society supports translational research that brings discoveries from the laboratory into clinical practice and application where they can save lives and improve the quality of life for many. And the Society also provides direct support for individuals and their families who are confronted with the at times terrifying challenges of blood cancer. Per Scholas offers opportunity for people from under-served and impoverished communities to create futures for themselves and their families. Both take positive steps and every single day towards fulfilling their missions and visions. But bottom line, their primary product and certainly as offered to those who financially support them is hope. In a fundamental sense and longer-term, that sense of hope means that they would in effect put themselves out of business by completing the realization of their mission and vision goals.

• So in a fundamental sense and certainly long-term, a mission and vision driven nonprofit seeks to put itself out of business by making itself no longer needed.

And this brings me to nonprofit leadership and to the type of person it takes to run a nonprofit on an ongoing basis.

• As I have already noted in other postings, the one consistent route to advancement up the table of organization in nonprofit systems, is to move between nonprofits (see for example, Nonprofits – Staffing and Career Potential.) With their limited staffing – a basic tool for limiting personnel and other non-mission expenses, most nonprofits rarely offer real, consistent opportunity for advancement from within.
• So people advance to higher levels of responsibility by moving on to work with other nonprofits. And this applies to top leadership positions for already established nonprofits, just as it does for every other non-entry level type of position, and certainly for higher level positions in those organizations.

That means that most new chief executive officers for established nonprofits at least, start there as outside hires with extensive experience in the nonprofit sector from working with other organizations – and in support of other missions and visions.

• Effective leadership of a nonprofit organization does not necessarily call for a specific overriding drive towards supporting any one particular mission or vision – though some nonprofit leaders start out with such a focus and maintain it throughout their overall career paths.
• Effective nonprofit leadership calls for an understanding and appreciation of the overarching value of societally important missions and visions per se, and a willingness to enter into and work to support them and on an ongoing basis.
• And when an executive assumes leadership with a specific nonprofit they do so agreeing to wholeheartedly support its mission and vision and for as long as they work there.

Any CEO should be expected to show loyalty to their organization and to the employees they lead there, and to their customers and others who rely on them. That is a general principle, and a test of principle and character that any chief executive officer should be measured against. Nonprofit leaders, or at least good ones, exemplify the spirit of that in their day to day lives. That at least is what I have seen in the best of them and the most effective of them as leaders. Businesses with primarily self-serving leaders who are in it only for themselves suffer from that; nonprofits with that type of leadership fail. And mission and vision become litmus tests for a nonprofit’s and a nonprofit’s leader’s success.

I am going to continue this discussion in my next installment where I will shift focus from the established nonprofit, to building and leading a new nonprofit – a nonprofit startup. Meanwhile, you can find this and related postings at my Guide to Effective Job Search and Career Development – 2. I have also posted extensively on jobs and careers-related topics in my first Guide directory page on Job Search and Career Development. You can also find this and related postings at Nonprofits and Social Networking.

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