In a fascinating Fast Company article, Nancy Lublin argues that earthly life cycles are critical to the efficacy of non-profit organizations.
For-profits go out of business all the time, some for good reasons, others not so much. Lublin challenges us, however, to name a closed non-profit.
A not-for-profit exists to cure something, address an issue, or elevate the status of a group of people; if and when that's achieved, we should be done. This is a little different from the for-profit sector, where companies die of failure -- I'm calling for death by success.
By example and to reinforce her point, she presents us with the case of a well-known organization, the March of Dimes.
... an organization created with a specific goal -- to help find a cure for polio. Unlike most not-for-profits, it succeeded ... in 1955. What a huge, awesome, world-changing accomplishment! But today it suffers from mission creep, having broadened its agenda to "improving the health of babies by preventing birth defects, premature birth, and infant mortality." I like babies. I'm all for neonatal health. (I had a premature, low-birth-weight baby six years ago.) But I think the organization should have quit while it was ahead. Today, Charity Navigator gives it only one out of four stars for efficiency. I wonder if morphing from one cause to another has been part of the problem. And I think it's fair to ask, Would it have been better to celebrate the early victory and shut down?
While the core issue is one of mission definition and governance, I think Lublin's article touches on important, far-reaching talent management and reward questions for those of us who serve non-profit organizations as internal staff, as outside advisors and as board members. Do our reward programs drive mission creep - or do they focus discretionary effort on results in service of a relevant and crisply defined cause? Do they incent the building of "donor-funded jobs programs" - or do they allow for some semblance of the creative destruction process necessary for innovation, providing room for reforming and redirecting effort and capabilities?
I realize that not all non-profits fit the mold presented by this article, and that there are indeed charities whose missions are directed toward legitimately ongoing needs - but I think the core questions are good ones, and important for those of us HR and reward pros working in this environment.
Some non-profits do close down. Remember, NPs can be charities, foundations, professional societies and a lot more: http://www.irs.gov/charities/content/0,,id=96931,00.html. There are more non-profits than there are corporations, if for no other reason than to give politicians a place to hide their funds raised and to keep their re-election campaign leaders employed between campaigns.
The ancient Office Managers Association morphed into the Administrative Management Society which finally self-destructed through reckless spending and dissolved around the late 1980s. As right-sizing and re-engineering pared organizational levels, the formerly substantial role of the middle manager in the American business pyramid virtually disappeared and membership dwindled until insufficient to support their expenses. Three past board members kept the AMS Foundation alive as a certification authority for the Certified Professional Manager credential and struggled to maintain its annual survey until it also disappeared (I think) fairly recently.
The National Secretaries Association transitioned from NSA to Professional Secretaries International until finally throwing off the burkha of "secretary"-hood to now thrive as the Intnl. Assoc. of Administrative Professionals.
Those are professional societies rather than charities, which tend to continue for the enrichment of their employees, suppliers and vendors despite having negligable public service value. Anyone who gets those annoyingly phony boiler-room scripted calls from "State Police Charity Support" outfits who pocket 99% of their income and give the minimum possible to a legitimate cause knows what I mean. Trouble is, there are only 17 IRS agents assigned to police abuses at charities in the entire nation.
Thus, charities are the hidden purse for power brokers. Abuses committed at non-profits are virtually immune from detection, they operate outside market economic forces, suffer few legal controls and are extremely useful to their sponsors. Those who run "Fix Problem Y" charities are unlikely to behave like Cinncinatus.
Posted by: E James (Jim) Brennan | December 14, 2010 at 05:26 PM
Jim:
Good information and fair commentary. I don't mean to imply that this is an across-the-board issue or has "global" relevancy, but I do think it is one more consideration for us to keep in mind, particularly as we work with executive rewards in the nonprofit arena.
And - to your point - rewards can only follow and support good governance, not surplant them.
Posted by: Ann Bares | December 17, 2010 at 09:31 AM
A happy new year to all your blog readers! Here's to a great 2011.
Posted by: Kelsi | January 06, 2011 at 03:49 AM