On Money: Critical lessons business leaders can learn from non-profits (Part 1)
Updated: Apr 21, 2021
In this 4-part series, we explore four critical areas of operation where business leaders could learn a great deal from innovative nonprofit leaders. In part 1 of the series, we’re talking about money and accountability.
So often, business leaders wade into the non-profit waters in the form of mentorship, boards and corporate partnerships. In these relationships the power dynamics are such that business leaders are positioned as the ‘experts’ and non-profit leaders as the padwans; wide-eyed neophytes eager to absorb all the knowledge and wisdom that will lead them down the path of success.
It’s true that many non-profit leaders have learned a great deal from the business community. But it is also true that business leaders could learn a great deal from non-profits. Sadly, this opportunity is rarely explored. If business leaders adopted some of the strategies, innovations, and community engagement tactics at which non-profits excel, it could make an incredibly powerful impact on their businesses, work cultures, and careers.
Of course, this is not true of all non-profits or non-profit leaders. There are many non-profits that operate archaically and either refuse to evolve or cause harm through their ways of being - just like any industry.
However, there are many well-run non-profits with brilliant leaders at the helm. It is from these non-profit leaders that business leaders could learn plenty.
So, what can be learned from innovative non-profit leaders?
Money - $$$$
Responsibly manage money: One of the most critical skills in running a business is managing budgets, cash flow, and spending. In most businesses the more we sell, the more money we make. However, non-profits are not in the business of making sales. Nearly every funded cent is allocated, and most of us do not have much of a slush fund to cover unexpected expenses. Budgeting is a science and there is no one better at budget planning and scenario building than non-profits. Non-profit leaders find ways to leverage networks to get what we need to pay people fairly while also being thoughtful about how resources are allocated to achieve the planned impact. Non-profits value the impact that every dollar can have.
Be resourceful & accountable: There is no organization more resourceful than a non-profit. We have to leverage every ounce of skill and experience in-house in order to achieve a desired impact. Every day we’re having to learn new things and expand our abilities so we can be accountable to and for everything and everyone our organization interacts with. We do not have the budgets to pay for problems to “go away”, we need to tackle issues with our teams and with a learning mindset. It is truly incredible what even a small team can accomplish when all our abilities are engaged, and we are pushed to expand our skills.
Lead with transparency: Non-profits are an open book. We are governed by laws that require us to share our financials publicly every year, and sometimes, more often than that. Collectively, we are striving to make it a ‘best practice’ to publicly reveal up to date information regarding financials, board diversity, program impact, and other key info so that we are accountable to stakeholders and the communities we serve. For example, a T3010 is a public filing each year that shows the top 10 highest paid staff, revenues, expenses, and more. We share public audits online, and we measure the impact of our activities and share the results (intended and unintended!) with the community. The best non-profits lead from a place of transparency, not as a marketing tactic, but as a holistic strategy to be held accountable by the communities they serve to do and be better.
Sharing our financials and other (perceived) sensitive information including salaries, diversity, unintended impacts and more can make us feel vulnerable. However, through transparency we are held to greater account, building trust with customers and the communities we serve.
Join us for part 2 in this series when we discuss, ‘Innovation’.
This blog is a collaborative piece by EPIC team members Michael Prosserman and Tina de los Santos