why is it so hard to kill a nonprofit?

Nonprofits vs. For-Profit Companies, Endurance, and Donor Loyalty

People who have worked in both the for-profit and nonprofit sectors bring a helpful perspective to both. Marina Glagovac, CEO of CanadaHelps.org (“the largest fundraising platform for smaller charities in North America”), came to the nonprofit arena following extensive leadership experience in eCommerce/Internet retailers.

I heard her on a recent podcast observe that if a business is not performing well, it will die. Customers, investors, and money will flee, and it will starve. But a nonprofit can perform poorly and live on. And on and on and on. How? Nonprofits often have a long-loyal core of donors, who believe deeply in the organization’s mission and heritage. Nonprofits can often report their “performance” in the form of incidental stories from here and there that sound wonderful, beautiful, and encouraging. For-profit companies don’t get to report their performance in that way. Their customers compare prices and features. Their investors look at comparative statistics across the industry or across a range of related investment options.

There’s an important role for nonprofit research here. Some nonprofits should die (or merge) and give their part of the mission to others who can do the job more efficiently or effectively. Most foundations and major donors are astute givers and apply at least some aspects of nonprofit performance evaluation to their decisions, with the help of research. Most grass-roots-level donors do not.

love, joy, peace … Michael

www.michaeljaffarian.com. Michael is a freelance consultant to nonprofits, with an emphasis on research. Contact him for a free, one-hour consultation. emichaeljaffarian@gmail.com.

Vol. 1 No. 15

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