Nonprofit Self-Esteem Crisis

Nonprofit Self-Esteem Crisis

Jonathan Spack is mad. He's mad about fallacies that he sees the nonprofit sector as having internalized -- fallacies that contribute both to poor management and to poor self-esteem. Here is his First Person Nonprofit Rant.

Our sector suffers from a chronic self-esteem deficiency. For most Americans, personal wealth is the primary measure of social status. If you've had financial success it must be because you're smart. This social Darwinism carries over to nonprofit organizations, too, morphing into a kind of sectoral Darwinism. As a result, many people-- both inside and outside the nonprofit world -- see our sector as being of secondary value and importance compared to the (for-profit) business sector.

The pervasiveness of this sectoral inferiority complex leads to some widely-held beliefs and practices that I consider harmful to our work,  and self-destructive when they are inwardly focused. Here are a few that really get me going:

1. "It's a lot easier to run a nonprofit than a regular business."

The reality is that nonprofit leaders must articulate the organization's values and advance its charitable purposes while managing its finances prudently. Balancing these obligations in an environment where access to capital is severely limited, revenue models are highly complex and infrastructure supports are sparse makes nonprofit management much more challenging than most on the outside realize.

Furthermore, nonprofits operate in a "muted market" which requires accountability to both those who pay for programs and services and the consumers of those services. In a for-profit business these two groups are the same, but not for us. The often differing and conflicting needs and expectations of funders and constituents add an extra layer of complexity to nonprofit work.

2. "Nonprofits are inefficient and wasteful."

An infamous 2003 Harvard Business Review article by Bill Bradley reinforced this notion by speculating that up to $100 billion in savings could be realized via reforms in the nonprofit sector.  And a 2008 New York University poll [4] reported that 70% of respondents said charities waste a "great deal" or "fair amount" of money, and only 10 percent said charities are "very good" at spending money wisely.

But nonprofit management has come of age over the past 25 years. Most nonprofits --  even smaller ones -- are run by leaders with professional backgrounds and impressive experience. There are now well over 100 degree-granting graduate programs in nonprofit management in the U.S. providing us with the next generation of leaders. Yes, there are poorly run nonprofits just as there are poorly run commercial enterprises and government agencies, but in my experience relatively few of those groups remain.

3. "Nonprofits would be more effective if they/we operated more like commercial businesses."

The current state of the economy suggests a rather serious flaw in this line of thinking. Should nonprofit emulate General Motors or AIG? There is a great deal nonprofits can learn from the business sector; however, the reverse is also true. When I hear someone say that "nonprofits should be more businesslike," I say, "Actually, I think businesses should be more nonprofit-like." Despite the occasional headline-grabbing scandal, values like integrity, transparency, and respect for constituents have long been integral to nonprofit practice.

4. "Nonprofits are warm and fuzzy places . . . no one gets fired."

Nonprofit folks like to think of ourselves as caring and compassionate beings. We care about the people our organizations serve and we care about our fellow workers. We value process and input into decision making as opposed to  top-down autocratic leadership. This is all good but it doesn't serve our constituents well if we move too slowly - or not at all - to deal with staff performance issues.

In the more hard-headed/hearted corporate world, if you don't produce, you're out; in our sector if you don't perform well you're often given a second, third or even a fourth chance. On many occasions I've heard executive directors agonize over what to do about a poorly-performing staff member. Every decision you make should be grounded in your organization's mission. Good management practice begins with honesty, transparency and fidelity to mission and constituents; it does not include tolerance for substandard performance.

5. "A nonprofit isn't a career; it's a job for housewives and young people."

Aside from the health care and education fields, which are essentially independent sub-sectors, nonprofit employment has historically been viewed by many entering the job market as a way-station on the road to more remunerative and prestigious work.

I believe this is partly because we are holding onto the outdated notion of nonprofits as receiving handouts rather than recognizing their rightful place as an integral part of society at all levels. Too many of us accept,  even embrace with martyr-like resignation shabby office space, below-market pay, substandard benefits, and limited professional development opportunities as our inevitable lot in life. Isn't our work important enough to warrant decent pay, good benefits, and a safe, comfortable workplace?  If we don't believe that ourselves how can we persuade anyone else to?

C'mon, fellow nonprofit folks! Shake off the chains of poor self-esteem! We are the champions! And we are changing the world!

Jonathan Spack, Executive Director of Third Sector New England [5], a Boston-based nonprofit capacity builder, is a lifelong Red Sox fan, seen here in the Red Sox dugout. He claims to be personally responsible for the team's historic 2004 World Series victory.

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