By Leib Bolel
The chasm between nonprofits and for-profits when it comes to investing internally may not come as a surprise to you, but the repercussions can be damaging.
In most for-profit companies, the philosophy that one needs to “spend money to make money” albeit strategically is of common nature, however, within the nonprofit sector this saying can be met with skeptism, with many decision makers intentionally preferring to be less acquainted with it.
The costs of investing in professional staff training, employee support as well as other areas that will build or maintain a well-oiled organization, not only may challenge your budgeting forecast but will most likely have you questioning yourself. Questioning; “is there really the need” or, have you contemplating that “there must be another way around it” in order to save on the costs incurred would you be implementing this training.
The truth is, the majority of nonprofits mission is to accomplish something other than being a profitable entity. A for-profit company, is just exactly that, a company that is driven by pleasing its shareholders whom take the pleasure in seeing their investments moving one decimal to the right. With a predominantly laser beam focus of a for-profit, the basic 101 of business principal that spending money to make money is a decision that is as easily made as having to decide whether to put a bathroom in a new office location. It’s a need, it accomplishes a necessity – end of story.
In the nonprofit environ, regardless if it’s a one person operation or an operation of a few hundred, the decision of investing in your staff can vary from being overly hesitant to not even considering it. This is because many executives see every dollar they are raising needing to go to accomplishing whatever their mission is. With a nonprofit many a time functioning predominantly on contributions, the pressure of accomplishing end results can be more demanding on a nonprofit executive than a for-profit executive, simply because investors of a for-profit are of the same mentality that for them to get a return on their investment, staff need to be the best trained and equipped. The same person however that donates to a for-profit, their expectations can change dramatically when contributing to a nonprofit. This is because they would like to see their money making a tangible difference in the world immediately. This is where a nonprofit executive can get hinged up on making any decision in investing substantially for their employees.
Having worked both in the for-profit and nonprofit sectors, I have observed that the areas that for-profits are eager to invest in, the nonprofits don’t, and the areas where the nonprofits would like to invest in, for profits don’t. While the definition of success of a nonprofit can vary, The National Center for Charitable Statistics notes that one in five nonprofits will fail totally. Having sat on multiple nonprofit boards, the financial challenges that are faced is a common trend, these nonprofits were a far cry from failure but the training available to staff and employees were limited.
I believe that every dollar wisely invested in nonprofit staff, will provide dividends. Invest in them like a for-profit would, for the same purposes of success. In the short term you might face pushback, but the professionalism and most importantly a happy, competent staff, will enable your nonprofit to not only reach your goals, but exceed them too both from your mission perspective as well as financial.
Leib Bolel is forward thinking when it comes to all things Non-Profit and Synagogue. With a successful history as a pulpit Rabbi where he led his synagogue to double its membership while bringing its average membership age down from mid-sixties to early forties, and having served as board member on several nonprofits, he now helps nonprofits and synagogues to exceed their goals as organizations. For more information visit bolelcoachingandconsulting.com