Think like a profit organization

Thought_BubbleMy frustration with non-profit organizations have always been the mentality around the way they are run.  In a start-up profit organization decisions are made by the entrepreneur who you would hope (as an investor) vetted the concept, asked for advice and understood the parameters.  In a non-profit organization they bring in experts to analyze the decision.  Most of the analysts come out of the non-profit world.  They are methodical and costly and many times the presentations that they come up with, IMHO, are not that different than what I could have come up with if I had been put in a office with some employees, board members and a big white board.  It is not easy changing that mentality but I do believe that the next generation of people who are supporting non-profit causes wants to see non-profit organizations think about sustainability and behave like they are a profit organization.

One of the things that I always love about MOUSE is that they thought like a profit organization and kept the overhead to a minimal.  The employees are all top level meaning there is no fluff.  Donors Choose is a non-profit organization but thinks like a profit organization.  They think about revenues, margins, impact and do not think about how they need to raise money every year from a donor base to run the place but have built a sustainable organization making an impact in schools across the country.  That is amazing. 

I sit on the board of two non-profits right now, Hot Bread Kitchen that I chair and the High Line.  Each of them did not get to where they are with out donor support.  The question now is how do they begin to think like a profit organization.  Hot Bread is currently raising money towards scholarships for our women bakers.  You can donate here.with the opportunity to win great stuff with your give.  I have been adamant about figuring out exactly how much money does it take to become sustainable.  How do we take out our social piece from our bread business and make sure our bread business is run like any bread business would.  It forces the board to look at the business with a set of profit eyes and be realistic about our financial goals including taking a look from top down at the organizational chart and does that make sense. 

Even at the High Line that has built one of the most amazing cultural park institutions that has made its mark on Manhattan in fifty years.  A powerful board that has had incredible leadership with two smart entrepreneurs that kicked off the whole idea.  I look at what has been built including the constant cultural happenings from art to events, a connection to the community, restaurants and retail.  They will continue to grow each of those areas as well as put on some killer fundraisers each year which are important too. Yet the question remains how do you built an endowment and pair that with the revenue opportunities to become a sustainable organization.  How do you get out of the constant large donor acquisition vs embracing all the people who walk onto the High Line each day letting them know that the park exists because of public crowd funding not the Government. 

Not surprising that I am a big fan of pushing non-profits to think differently.  Don't get stuck in the ways of the past where it is wealthy donors that are keeping the organization alive.  There will always be organizations that are doing good but have no chance of ever being sustainable but then be as lean as possible so that the majority of funds raised go to the mission.  I want to support organizations that are thinking out of the box not set in the past.