There is a long-standing myth floating around that nonprofit organizations and agencies are NOTHING like other types of businesses. While the motivation for doing well may not be profit in the traditional sense, for nonprofit managers it is still necessary to supervise individuals, devise and adhere to budgets and pay attention to daily operations in the same manner that for-profit managers do. In fact, the most successfully-managed nonprofits tend to be run like efficient small businesses.
Nonprofit organizations with paid employees have to adhere to the same laws, regulations, payroll taxes and other stipulations that other small businesses do. While the structure and particulars may be a bit different depending on the size and purpose of the charity organization, managing a small nonprofit has many of the same challenges and components that a small for-profit business does.
A nonprofit manager still needs to keep a steady eye on the bottom line. In fact, this can be especially challenging for a nonprofit that does not have a steady revenue stream or income-generating product or service to offer. Finances can fluctuate and be difficult to predict and this requires a manager to pay close attention to expenses, while constantly seeking new and creative funding sources. Many have argued that nonprofit managers have a great deal in common with entrepreneurial business owners in this sense the focus is on flexibility, creativity and sheer determination.
Virtually all nonprofit organizations are mission-driven a strategy that has become a trendy necessity in for-profit businesses. Managers must constantly be linking organizational activities back to the mission, making sure that employees and volunteers stay focused and adhere to bylaws and policy, in addition to the mission. Ask anyone who has worked with or for a small business and you will likely hear similar tales of managers trying to keep employees, board members and others focused on the mission and purpose of the business.
For nonprofit managers, it IS important to keep current on concerns and issues affecting nonprofit management, but it is equally key to stay current on business practices. Being able to bridge the two worlds of charity work and management is what makes the best nonprofit managers indispensable.