It may seem odd to include an article on non-profit organizations in a volume that is titled “Starting a Company”. However, perhaps the Volume should have been titled “Starting an Organization” instead. At the highest level, the difference between for-profit and non-profit organizations is quite simple: For-profit organizations, are primarily focused on making money for their investors. The primary function of a non-profit organization is to provide benefits to some portion of society. Although these primary functions seem to be different, they both are fundamentally based on serving the needs of their customers. In both cases, they are users of the products or services that are offered by the respective organizations. If the organizations do not fulfill their customers’ needs, they simply cannot be successful and reach their primary goal of either making money or providing benefits to their constituents.
Many of the articles in this collection discuss some aspect of revenue, the life blood of all for-profit companies. However, using a search and replace algorithm to replace the term “revenue” with “donations”, most of these articles are remarkably applicable to non-profit organizations as well. Following similar logic, donations are the life blood of non-profit organizations. Whether they are financial investors, customers, or donors, all share the same expectation to receive an acceptable return, as they define it, for the commitment they have made.
Unfortunately, many non-profit organizations, and especially their dedicated volunteers, tend to think of their organizations as being very different from for-profit companies that are “only” focused on making money. The reality is that both types of organizations are focused on fulfilling their primary mission of serving their customers. The only difference involves how the effectiveness of their efforts are measured. The similarities become obvious when reviewing the Seven Principles defined in this collection by changing the term revenue to donations and thinking of customers as product or service recipients. The articles in this Volume, “Starting a Company”, are equally applicable to non-profits as well.
The articles in this chapter may result in individuals considering starting a non-profit organization to carefully examine some of the basic premises that they have about the mission, goals, and the practicality of their plan. Some non-profits immerse themselves in the passion and emotion of their cause and lose objectivity. Clearly understanding some of the issues discussed in the chapter will help the entrepreneur develop crisp answers to questions that will surely arise as they begin to socialize their vision.
Virtually all non-profit organizations could benefit from engaging individuals with extensive business experience and practice some of the same basic activities as for-profit businesses do every day. This will include budgeting, forecasting, competitive analysis, user/customer feedback, quality initiatives, milestone creation, tracking, and accountability, and formal operational reviews. Only if they “do good” in these activities can they continue to “do good” for their customers.