For-Profit Thinking for Nonprofits?

Bob Cryer

Author: Bob Cryer

Executive Coaches of Orange County

www.ECofOC.org

Many people seem to think that nonprofits are fundamentally different from for-profits. However, most nonprofits might be a lot more successful if they used a for-profit business model to guide more of their thoughts and actions.

For-profit businesses are customer driven. They try to figure out what their niche of customers wants to buy at a price that enables them to market, deliver and service that customer need, pay their employees and suppliers, and make a profit that they can use to continually grow their business. A for-profit’s commitment to be driven by their customers’ wants and needs is a key to their success.

Nonprofits might be more successful if they committed themselves to this for-profit customer-driven mentality. Donors are a nonprofit’s customers. Donors hire nonprofits to deliver certain services or outcomes to the niches of people that they would like to help. The nonprofit’s employees and the people that they decide to help are the suppliers of the outcomes that donors want. The keys to nonprofit success are:

  1. figuring out what services and outcomes their niche of donors really want to buy,
  2. which of those services and outcomes their employees can deliver at an appealing cost,
  3. how the nonprofit can market those appealing costs and benefits to their donor niche,
  4. and how they can keep their donors satisfied with exceptional customer service after the sale.

This is the way a for-profit entrepreneur might think about building a successful nonprofit.

Is it time for more nonprofit directors to start thinking  more like a for-profit entrepreneur?