Why Nonprofits Fail

I know first-hand how two non-profits have failed. Neither can blame it on the economic recession nor on bad programs. They failed because they constantly underrated the real cost  of providing services to the community. 

According to  David Greco, Vice President of the Nonprofit Finance Fund, nonprofits should retool their thinking. Here are some tips Greco gave during a recent workshop in Phoenix:

  1. Nonprofits should ask funders for the real cost of providing services. Do not bring the cost of programs down.
  2. Have the discipline to say “No” to funders and others in the community who ask for services at steeply discounted prices. Think like a corporation as the 501-c-3 is just a tax exempt status.
  3. Educate funders that you are in for the long haul. Discounted services will affect your long-term growth.
  4. Change from being a program provider to an enterprise. Think business like.
  5. End the culture of funding programs. Instead, focus on the organization as an enterprise.
  6. Get real data and use it to highlight the good you do.
  7. Target growth in unrestricted income as this is your net worth. Have adequate cash in your reserves to grow your organization. Board designated reserves will add to your financial health.

Why are 4 diapers better than 5? Profit with a purpose.

Kimberly-Clark’s vice president of global sustainability, Suhas Apte says asking the right questions is critical to corporate social responsibility.

According to Apte, when Kimberly-Clark found that four diapers could yield the benefits of five on a daily basis, the company developed innovative products that would last longer, reduce waste and provide better options for consumers.   “Ask good questions,” he said while addressing the Thunderbird Global Business Dialogue held in Glendale, AZ from Nov 11-12. Kimberly-Clark has also launched innovative products like automated dispensers to reduce waste and excess consumption.

According to Apte, “We have to find the sweet spot to make your business grow in a sustainable way.”  An example is Kimberly Clark’s diaper bank program titled “Every Bottom Counts.” Huggies is the  Founding Sponsor for the National Diaper Bank Network and recently began a campaign to donate 12 million diapers in 12 U.S. cities over a 12-day period.

Social programs like these not only help the business grow but also yield profit with a purpose.