NPOs are by definition set up and run by people who want to help Society in one way or another. Most are run by people with the best of intentions but with little experience in the running of a business. One might ask whether it is necessary to understand how a business runs to do good in society.
The answer is a resounding YES! The elements of any well run business include Marketing, Business strategy, Operations management, HR management and Financial management.
To run an effective business or an NPO the requirements have to be the same. Whether you want to deliver profit to a shareholder or services to those in need, if you misdirect your marketing efforts you will not be able to raise funds, if you misdirect your operations management you will not deliver the services to the right beneficiary, If your HR is poor your employees will not feel satisfied working within your organization and finally if you don’t have good financial management you will overcommit or run out of money or waste your money on the wrong goals and fail to meet your organization’s objectives and perhaps cause the whole NPO to fail.
Unfortunately the mindset of many CEOs who run NPOs is that either their ego tells them that they can manage everything without help as they are doing good for society and what could go wrong or they must not waste money paying an outsourced financial director to draw up budgets and allocate funds to projects as specified by funders and not spend in multiple directions and achieve nothing worthwhile in the long run.
This would never happen in a well-run business but the moment an NPO is created, all of the normal logical rules fly out of the window and the organization is populated by people who are completely inexperienced in running a business and feel that it is ok to waste money and resources on their ideas as long as in general they are trying to help the public.
We at Professional Management Consulting have been helping NPOs for 20 years and can offer financial management skills and operational advice to Board members and CEOs which will result in the NPO growing and improving its services in the future.
Take the high road and allow us to assist in maintaining your organization’s financial stability so that you are around to help in 10 to 20 years from now.
