Nonprofits are BUSINESSES
Why do people go into nonprofit work? Not because they enjoy running payroll.
Nonprofits - and the people who work there - exist to make the world a better place. They are mission-driven, meaning the work is focused around a single cause, a problem they want to fix.
The cost of fixing the problem usually is more than what people are able to pay. Therefore, nonprofits are set up to be able to accept donations to offset the costs. And, the nonprofits are not required to pay taxes on any excess revenue they generate. The business structure is driven by two tax policies.
Already, things are getting weird. Nonprofits exist to do good work, but are structured around tax law. Yep.
This is important because some people mistakenly believe that the term “nonprofit” means, “We don’t have to make a profit.” Or, even worse, “We don’t have to operate like a business.”
Wrong. A nonprofit is a business. It’s a business that enjoys some tax advantages. But it’s still a business.
And it needs to be run like a business. Payroll and all.
Most people go into nonprofits to change the world - and rightly so. World needs changing. The work the nonprofit does in service to its mission is called its Programming. If this were a “for profit business,” you’d call the Programming work “products” or “production.” The food pantry provides creates programs to distribute groceries to the food insecure. Apple creates iPhones and computers to sell to its customers.
Just like Apple, there’s much more to running the business than making and selling the iPhones. There’s Finance, Marketing, Customer Service, Governance, Legal, Human Resources, Facilities Management, and so much more… And, just like Apple, the nonprofit needs a brand, a strategy, a budget, and a clear focus for what it does and doesn’t do as a company.
The 6+4 System was designed for nonprofits to help them think like a business. It collapses business operations into “6 Segments” and summarizes the strategic thinking into “4 Foundations.”
The 6 Segments are structured to help you get critical tasks on the calendar so you don’t miss deadlines.
The 4 Foundations are meant to help you put words to what you hope to accomplish and how you plan to do that.
Poke around the website. You’ll find downloadable tools, definitions of the various 6+4 components, thought pieces under the “Insights” blog, and opportunities to make the system your own. You’ll find much of the information you need here, for free. If you need some tools and like planners for mapping out deadlines, we’ve got that too. If you are a bigger organization and need some custom help, reach out and let’s talk about bringing me in as a consultant.
My goal is to give nonprofits the tools they need to be sustainable BUSINESSES as well as critical CHARITIES. With all the good that nonprofits are doing, it would be a shame to lose them because their focus on Programming keeps them from the other parts of managing their organizations. Whatever plan a nonprofit has to change the world needs a plan - a plan that incorporates all aspects of sound business management.
Enjoy.
Cathy
