5 recommendations for revolutionizing the nonprofit sector

The nonprofit sector is known for non-competitive salaries, long work hours, and fostering a culture that does not adequately address burnout. Despite this, the mission driven nature of nonprofits has always kept me around. What can I say? I love this sector. Working with various nonprofits has helped me to acquire transferrable skills that I may not have gotten elsewhere. No two days look the same and thinking quickly on my feet has become a prerequisite for success in this setting. I wouldn’t trade this in for anything.

Based on my professional experience launching a youth-education nonprofit, interning with a global consulting firm that dealt with a range of for-profit and nonprofit clients, and working with various community based organizations, I’ve identified five practices nonprofits should adopt in 2016 in order to become more successful.

1. More nonprofits should change the conversation around how to measure and sell their social impact

The image above is a play on how nonprofits sell their impact.  An underemphasized area in the nonprofit sector is performance measurement. This is especially difficult because measuring social impact is challenging and it’s a fairly new concept in the sector. Most donors and foundations fall into the habit of relying on a nonprofit’s overhead as the main indicator of an organization’s success. Collectively, nonprofits are not doing enough to challenge this idea. Instead they should strive to provide other indicators that may speak to their organization’s effectiveness. Is it so drastic to think that investing in employees can serve as another indicator and that doing so doesn’t make an organization “ineffective”?

The idea that investing in employees is a sign of ineffectiveness further feeds into the unspoken rule that nonprofits must do more with less and should accept less. Low overhead does not equate to a more efficient and effective nonprofit; in many cases, we see high turnover as a result. (While it's true that Millennials want to find work with purpose, we’re also concerned about having savings for the future). Instead, a pattern of clear and compelling outcomes makes for a more effective nonprofit.

To that end, nonprofits should strive to become a little more sophisticated in how they measure and consequently communicate their impact. Change the storyline! For example, a college access nonprofit might say, “We didn’t just help 300 kids graduate from high school and pursue a college degree, we helped increase these families’ earnings by 20% over the next three years.” Highlighting an organization’s social return on investment can be more compelling and descriptive of an organization’s impact.  The Cara Program, an organization that works to address homelessness and poverty through community partnerships does a great job at this. Check out some of their stats here.

 2.  As nonprofit professionals who work within the sector, we should change how we label  the sector

The misnomer of the sector doesn't help how we ask for help or create incentive to change the conversation around how to operate more effectively. The term “non-profit” has grown to be synonymous with struggling organizations that survive off of grant funds. Nonprofits do in fact need to make a profit, but they do not pay tax on that profit as is required of for-profit businesses. Nonprofits should be run like a business since they need to make profits but the language we use should also encourage that to some extent.

3. More nonprofits should hire people impassioned about the organization’s mission with a track record of success

I’ve come across employees who, in any other sector, would have been fired because of their lack of experience or consistent mistakes made on the job. Why do we skimp on quality when it comes to hiring people in this sector? The argument can be made that what to look for in employees is less tangible. However, the stakes are just as high in this sector when we fail to assess for quality. The work we do has the potential to significantly decrease negative outcomes such as high crime rates, or poverty, which when left ignored can indirectly increase the costs incurred by society in the future. In addition, research by Sampson (2012) [...] concluded that, “ . . despite persistent poverty, racial diversity and other social challenges, [the presence of] community based organizations strongly predict collective efficacy and collective civic action, durably so.” (p. 209).

Hiring rockstars is one thing, but retaining them presents its own set of challenges and this brings me to my next recommendation.

4. Under-resourced nonprofits should match their high expectations for employees with rewards and perks that will make their employees’ feel valued

The organizations that hire great talent also incorporate perks that successfully combat burnout. One of the great things about working in the nonprofit sector is the close proximity between the client and the problem. In this way, nonprofits are uniquely positioned to understand the problems faced by their audience and help develop creative and tailored solutions. More nonprofits should consider creating an environment with perks that empower employees to find creative solutions to problems.

In order to hire the best, organizations must be able to provide rewards that acknowledge and appreciate the value individuals bring. Part of acknowledging an employee’s value might mean investing in professional development opportunities that build on an employee’s technical skills.

5. Nonprofits shouldn’t be afraid to toot their own horn…These innovations will rub off on the business sector

Nonprofits will become so good at creating long-lasting change within their respective communities, that businesses will integrate social impact and profit seamlessly into their bottom line.

Nowadays, it’s more common to see social impact as a standalone feel-good feature of most businesses. Businesses may tout that 10% of their profits will go back to poor communities (in their defense, it’s worded a lot more politically correct) but this kind of social impact isn’t really long lasting. While this kind of help may have an immediate impact on communities, businesses and budding entrepreneurs should begin to challenge themselves to think about their approach to social impact.

As I intend to transition into social entrepreneurship, some of the questions I have to consider, and those I urge other businesses to consider are:

• Is it really beneficial to give communities a certain percentage of my profits, or would it make more sense to employ people from these communities?
• How can I allocate my profits towards programs that build employable skills and/or create income for individuals from these communities?
• To me, the hardest question throughout this process is: How do we measure the impact of all of this?

What are your thoughts? Are these recommendations too lofty? If you work in the nonprofit sector, what are some things you’d like to see done differently?