Last week I threw up a lengthy post with a number of discussions, chief among them the issue of salaries and professional development in the nonprofit world. Another issue briefly touched on was the oft-heard assertion that nonprofits should be run “more like businesses” in order to improve their performance. Phil Buchanan, writing on the Independent Sector website, argues that trying to run nonprofits more like businesses is the wrong strategy:
These characterizations of the nonprofit sector as ineffectual — and the assertion that the sole path to improving performance lies in ‘business’ thinking — aren’t remotely accurate or helpful.
Buchanan concedes that which is certainly true: nonprofits, as a whole, still do need to strengthen themselves. “There needs to be more focus on the articulation of clear goals, the development and implementation of coherent strategies, and rigorous and relevant performance assessment — all in service of greater positive impact.” But, assuming that “running things like a business” is synonymous with “improved performance and outcomes” is flawed thinking in Buchanan’s mind.
It’s hard to argue with that. Just because businesses are for-profit and typically strive more pointedly towards a bottom line, and thus toward “productivity” and “results” (at least in the traditional capitalist sense of those terms), doesn’t automatically make them paragons of effective management, strategy, organizational acumen, etc. So, if not like businesses, then how should the nonprofit sector be run in order to improve? Instead of trying to adopt business models, Buchanan says, nonprofits would be better off “staking our own claim to a commitment to performance — and to the distinctive role we play in building a better, more just and livable world.”
But what does that really mean, “our own claim to performance?” What is that claim? If not a traditional business model, then what? Determining that the business world and its managerial practices are not applicable to the nonprofit sector (or at least not what the nonprofit world needs to be at the top of its game) is step one. But then articulating what the nonprofit world does need to be at the top of its game seems to be a very important step two.