Horribly inefficient

There are innumerable examples of non-profit organizations that usually are advised to become more like profit businesses. Management experts and consultants as well as the general public view charities as horribly inefficient.

One common explanation is that the concentrating power of the profit motive is missing. It is widely accepted that non-profits are not that good at imitating business practices, assuming that they even try to do so. Too, businesses look down on charitable groups because it is assumed that without the profit motive, disorganization and uneconomical policies are to be expected.

That charge, of course, has some validity, but it is not invariably correct. Companies motivated by the profit motive frequently are guilty of the same charges. Some who have focused on profits in the past decade, such as General Motors, have fallen by the wayside. Furthermore, many in the charitable group succeed by being highly efficient. A good example is Habitat for Humanity, which builds inexpensive homes and operates in a cost-effective way. Successful non-profit groups have been good at motivating workers and have flourished at marketing as well.

In this present tough economic environment, it would be useful if businesses would be able to motivate workers without having to pay huge monetary inducements. What is missing from many profit-oriented companies is the motivation of workers.  If they look on their jobs as merely a meal ticket, they will be less efficient than others who have a wider perspective. Those who participate in Habitat for Humanity personify that latter group.

Non-profits frequently have a flat management structure and work right along with other workers. The workplace routinely is a pleasant place. Workers regularly are persuaded that their goods and services are helpful to people. Those non-profits cultivate their workers, even those who no longer are employed there. They are considered part of an extended family.

Non-profits try to convince donors they are getting value for their money, and they build long-term relationships based on frequent contact and saying thanks as if they meant it. They send many updates to donors (businesses could do that with customers) to substantiate the fact that a continuing connection is important.

We no longer should consider non-profits as horribly inefficient, but rather as role models that businesses should copy.


Bruce Whitestone