In today’s world, non-profit organizations can no longer rest on the idea or premise that the work they do is rewarding, or personally fulfilling. While the work that non-profits do is greatly needed, and at times greatly appreciated, it is greatly underfunded as well. In Philip Harvey and James Snyder’s article as well as Bill Gates article all authors clearly outline that in order for non-profit companies to be successful; they have to begin to re-align their organization’s goals, objectives with their financial statements. The question becomes how does a non- profit realign their goals, objectives and financial statements in such a way that they are still able to do their good work, but remain financially viable? Bill Gate’s answer is creative capitalism. Another answer, one that mirrors the idea of creative capitalism is the idea that organizations now more than ever must ensure that they are closely integrating their cause agendas into their business strategies instead of just writing a check. In each of these answers, organizations and corporations can find success.
“Charities Need a Bottom Line Too” (Harvey & Snyder, 1987) and “Making Capitalism More Creative” (Gates, 2008) both help to clearly outline what charities, corporations and nonprofits could do differently to be financially more successful and stable. Each of these articles holds several things in common. One of which includes the same observations that Jack Welch endorses. These observations include that business owners must first focus on winning, meaning that they must reach profitability before they can start thinking about their companies’ social responsibilities. We agree that an organization must have profit, and an infrastructure that will survive in the long run if the organization hopes to be able to donate any funds or products. We have also come to realize that charitable giving in a business culture will go a long way toward building a great company. Why should great companies build concern for the less fortunate local communities, and the world into their cultures? First, being socially responsible will attract and retain employees, it also makes business sense. Sharing profits with the community attracts customers and gives the company a reputation as a good neighbor. It adds to the bottom line by increasing exposure to new customers and making existing customers proud of their choice. People want to feel good about the companies in which they invest. Consumers are also very much aware of which companies make an effort to be environmentally responsible. While for profit businesses attempt to have a direct impact on their communities’ sustainability, the overall goal should always be to sustain the organization first and to maximize the wealth of shareholders second. After all, the shareholders cannot be made wealthy if the organization is not performing well and making a profitable margin. Attentive regard to shareholder wealth will always be necessary and appropriate in the business world. After the primary goals are met, community contribution should follow. Community involvement should rank high in the list of goals and strategic targets to meet because without the community, the organization could crumble. Businesses have to realize the potential that community contribution and involvement or the lack thereof has not only their bottom line but also on their reputation and the reputation of their shareholders.
Charitable organizations have to set their goals differently than not for profits do traditionally. In order for charitable organizations to survive they must think and plan as if they are for profit organizations. Considering that not-for-profit organizations depend on funding from outside resources and government agencies, their primary goals have to strategically align with business practices before they can reach their stretch goals for the cause that gave birth to their mission. What many charitable organizations have failed to do is to develop a team of individuals with a business sense to systematize the organization while the mission driven individuals can meet the goals of cause at hand. The two teams have to collectively work towards sustaining the organization through their interdependence and creating a relevant bottom line. Each concept outlined by each article supports that schools, charities and businesses can be helped by reframing how they approach their work, and how they approach the financial aspects of their work. Too often schools, charities and nonprofit businesses lose sight of the financial aspects of what they are doing, or lose sight of what their actual mission or objectives are. In the article “Charities Need a Bottom Line Too” (Harvey & Snyder, 1987) one organization continued to build schools, even though the building of those schools did not increase or help the organization get closer to their goal of increasing the education received by the children in that area. A number of nonprofits each have a story like this, of completing an activity, or to continuing to do something that is not supported by the results. What would have been helpful for this organization and many other nonprofit organizations is to take a look at what their goals and objectives are. Once the organization has clearly defined their goals and objectives, then they need to adopt some of the for profit businesses approaches. For instance, developing a budget, and readjusting that budget to align with the organizations goals and objectives as needed. Developing measurement tools that allow the organization to know if they are achieving their goals and the goals of the target population they are assisting. What might also be helpful is if the nonprofits begin to view their shareholders not only as the organizations or corporations that invest in them, but also as the population they are trying to assist. For instance, had the organization building the schools talked to their shareholders, maybe they would have discovered a better way to reach out and educate the students. Ultimately, whether the nonprofit organizations like it or not each has to begin to change the way in which they conduct their business if they have not already. The economy is in a constant state of flux, and any businesses success is based largely on their ability to create a sound business plan, and adhere to that plan. For nonprofit organizations, a large portion of their business plan will be soundly linking their goals, and mission to clear financial objectives. While this might be difficult at first, it is and will continue to be essential to each organization’s survival in the end.

References:

Gates, B. (2008). Making Capitalism More Creative. Time Magazine. Retrieved from http://www.time.com/time/magazine/article/0,9171,1828417-3,00.html

Harvey, P. D. (1987). Charities need a bottom line too. Cambridge: Harvard Business Review.