An EPIC Solution for Economic Hardship in NPOs Part 1 (Intro & Time)
January 30, 2010
These certainly are hard economic times. Not only is it difficult for people to meet their personal obligations, but it is even more difficult – and most of the time impossible – for them to give to the extent that they would normally give.
What about business? Because people are spending less, are out of work in some cases, and are over-extended in most instances; businesses are generating less revenue. This in turn causes them to make cutbacks, which of course adds to the plight of unemployment, which then exacerbates and perpetuates the lack of a positive revenue stream.
Acknowledging that Non-Profit Organizations (NPOs) are in fact businesses, one can see that a non-profit’s revenue stream is severely damaged by this trickle-down effect as well.
A not-for-profit organization may in fact provide services or sell goods, thus receiving money, but this receipt of money is not the same as that of the profit-vacuum that engulfs For-Profit entities. It is a generally accepted and enforced philosophy that For-Profit businesses exist to “make a profit and return wealth to its shareholders” (Craddock, 2008). However, this is not the same for Not-For-Profit companies as NPO’s do not deal with a profit-per-X revenue engine; they deal with a revenue-per-X resource engine. This resource engine is broken into three parts by Jim Collins (2005, p. 17) as time (both the volunteer of it by people and the lapse thereof trough the passing of it), money (revenue-per-X), and brand (image, heritage, and mission/vision).
Since it has already been identified that money is an issue during economic times, it makes sense for non-profit companies to focus on time and brand during such hardships. In the time scenario, constituents are more likely to give of themselves (in physical presence) than of their money. Still, in economic hardships supporters can be asked, and are also more inclined to help through small(er) donations. One simple example of this may be that a supporter is willing to pay for one hour’s worth of an employee’s wage. Or they might help reward a volunteer by taking them to dinner; than through large amounts of money during economic hardship.
Read: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Get the Full Article
References
Collins, J. (2005). Good to great and the social sectors: A monograph to accompany Good to Great. New York: HarperCollins.
Craddock, J. (2008). The Purpose of Business. Presentation, Walden University.