The dirty secret about non-profits is slowly seeping into the West Michigan community: non-profits need to be run like businesses. The changing economy and less discretionary income for individuals to donate has left many non-profit organizations struggling to make ends meet. But non-profits don’t make anything, don’t sell anything, and don’t really have owners that make money. They provide education, religion and services to those that need help. So what is the deal with them having to be run like a traditional business?
Let’s get one thing out on the table: these are non-profit corporations. Despite the distinction, at their heart these entities are corporations. They just have a different look to them. Businesses provide services in exchange for income. Non-profits are no different. They derive income in order to benefit individuals or other non-profits. Just because there is someone other than an owner benefiting from the income derived by the non-profit does not mean that a non-profit is that much different than a traditional business.
Tami VandenBerg, who co-owns The Meanwhile and Pyramid Scheme bars in Grand Rapids, is the executive director of Well House, a non-profit that provides housing for homeless individuals. VandenBerg, who has been at the helm of Well House since January, has utilized her entrepreneurial experience from her business ownership to help impact Well House. Her looking to outcomes, financial experience and developing community partnerships has helped Well House expand under VandenBerg’s guidance.
VangenBerg is not using unscrupulous business tactics or pouring money from her for-profit businesses to prop up the non-profit. She is just applying the same principles that have made her a successful entrepreneur to her running of a non-profit. She is not sitting back and letting the world around the non-profit control its success but she is actively pushing and looking new ways to expand and succeed.
The ultimate goal of a non-profit organization is to do some charitable good. In order to do that charitable good, the non-profit is going to need to derive income. In order to do that charitable good for a significant amount of time, budgets have to remain balanced. In order to maximize that charitable good, partnerships with other entities that can support your non-profit are needed. These seem like simple concepts but they are overlooked by so many non-profit organizations.
Non-profits organizations and other social enterprises do so much good but ultimately they are businesses. Ensuring they follow similar business principles and operate in a manner to protect themselves is very important. While business owners are looking to run their businesses to benefit themselves ultimately, non-profits are run to benefit those that need the help. Why would you take the steps to protect your business but not take the steps to protect your non-profit organization. To find out more about this information and more, contact a non-profit attorney today.
Source: “Dual Roles: Entrepreneur applies business acumen to running GR nonprofit” by Jane C. Simon at MiBiz.com