Be More Like a Nonprofit!

On Monday I thought out loud a bit about how nonprofit exceptionalism – the sense that the laws of business physics don’t apply because we nonprofits aren’t like them over there in the private sector – can do more harm than good. Nonprofits have a lot to learn from the best-run organizations in the private sector, since strong organizational practices will often add value regardless of the sector. And in my experience, nonprofits generally stink at some things that the best private sector outfits tend to be really good at, including long-term strategic thinking, staff development, financial management, and understanding the returns on capacity investments.

But the same is true in the other direction, as well: private sector organizations can learn a lot from the best-run nonprofits. This isn’t a new idea, and many of the items I’d put on that list have earned attention from other writers over the years. They include the ability to focus clearly on a complicated mission, to make their supporters feel valued and engaged, and to make a lot happen on the cheap. This list may also include organizational structure: Jason Fried’s column in the April issue of Inc. describes their efforts at 37Signals to keep the organization as flat as possible. He offers some interesting reflections on their experiences, but for many small and mid-sized nonprofits a loose organizational structure is the norm. A group like Center for Biological Diversity, which famously eschew structure despite its 60ish employees (it may be more a collection of free agents than a conventional organization) yet coalesces anyway into a strong strategy and high productivity, may be an extreme example. But you won’t have to look very far to find plenty of examples of less vertical, less structured organizational charts in the nonprofit world, and you might have to look harder than you’d expect to find examples of actual organizational charts at all.