Comments on: What can we learn from the non-profit world? https://berkonomics.com/?p=5173&utm_source=rss&utm_medium=rss&utm_campaign=what-can-we-learn-from-the-non-profit-world Dave Berkus' business insights Wed, 25 Jan 2023 21:04:24 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Harley Kaufman https://berkonomics.com/?p=5173&cpage=1#comment-159611 Wed, 25 Jan 2023 21:04:24 +0000 https://berkonomics.com/?p=5173#comment-159611 Hi, again, Dave
I’ve had the privilege of being in charge of two (now) very successful 501-c-3 orgs for a decade. First lesson is that the commonly used name for them is wrong and leads to an incorrect approach to the business (and yes, 501-c-3’s are businesses!). The proper nomenclature should be “not for profit (NFP)” and I believe this is the way they are described in the IRS code. This change of perspective allows leadership to understand that all the goals of a for a for profit entity should be respected in an NFP. In the NFP world the profit is generally called the “remainder”; a term from the federal reporting document called the “990”. View the NFP as requiring revenue (most often, donations, but may have other sources) to exist, and hopefully have a remainder at the end of the FY to add to their reserves for the rainy day that will, most assuredly, arrive.
NFPs have a mission statement and goal markedly different from a for profit entity. It is not profit, it is the mission! This may help volunteer leadership (most drawn from for profit entities) to adjust their thinking appropriately.

Harley

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