My clients are in the foundation and nonprofit space but it sometimes irks me that consultants are asked to make these organizations "run more like a business." Unlike a for profit business, my clients' missions are not to maximize shareholder wealth, so is it right to be doing so?
In the end, the main difference between for profit and non profit is the disposition of profits. The largest foundations have assets that put them well inside the Fortune 500 and some operate with thousands of employees across the globe. Therefore, it is logical to consider them businesses because they are. Just because their missions are not oriented to shareholders does not mean that the leadership, strategy customer service, information management, human resource and business processes don't deserve your best improvement efforts. The outcome of applying your consulting skills is not profitability to shareholders but service to stakeholders.
Consider that a poorly run nonprofit or foundation loses the trust of its funders and service recipients. It also fails to generate enough revenue or control costs such that it compromises its ability to fully achieve its mission. Finally, employees and volunteers working at an organization with an inefficient, unfair or dysfunctional working environment will not contribute their best efforts. For these reasons and more, your best efforts to run your clients' organizations efficiently and effectively are valid.Tip:
That said, the constituents of every organization, for profit or nonprofit, benefit from competence consulting advice aimed at good "business" practices. This applies to public sector organizations as well. Some government agencies and nonprofits are so effectively managed that they put a lot of for profit businesses to shame. Your clients can be in this category. © 2011 Institute of Management Consultants USA