7 game-changing things nonprofits can learn from for-profits

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[Image description: A grey koalas peeking out from behind a tree trunk, staring directly at the camera. This koalas has nothing to do with this post. Or does it. Guess you better read the rest of the post to find out. Image from Pixabay.com. By the way, koalas look cute and cuddly, but I hear they’re kind of vicious. They’d not unlike some board members, ha!]

A while ago, I read about Juicero, a wifi-connected juicing machine. It was originally $700, and you had to subscribe to these proprietary packets of cut-up fruit and veggies for $7 each. You put a packet into the machine and turn it on—with an app on your phone, I guess—and it squeezes out one glass of refreshing juice! It was, at the time, the apex of human achievement. Alas, this tale of innovation and disruption did not have a happy ending. Bloomberg did an investigation and found out that you can squeeze the packets by hand and get the same amount of juice. They wrote a story about it, and the price for the Juicero dropped to $400 before the company tanked completely, and now people have to squeeze juice using non-wi-fied juicers, like common peasants.  

Why the heck am I telling you this? Simple: I keep encountering people who say that nonprofits should act more like for-profits. You probably do too. And of course, many of us bristle at the bizsplaining and the condescension. There are many blog posts out there, and many of them are incredibly insulting and make you want to roll your eyes: “Make sure you have what people in the business sector call a ‘bizz-nezz puh-lan.’ It lays out these things called ‘go-als.’ Businesses also do what is known as ‘ac-count-ing’ ”

But maybe we SHOULD put our pride aside and consider the things we could learn from our money-minded counterparts, with Juicero as an amazing case study, along with other companies that are actually successful. Here are a few lessons from for-profits that are not just useful, they may be game-changing: 

  1. Think bigger, bolder; sometimes beyond reason! Look at MoviePass. It didn’t just want to just be a business; it wanted to completely “disrupt” the movie ticket industry. It had one of the silliest “puh-lans” ever (to lose money every time someone sees a movie, with cash being burned at higher rates as more people became members), and it’s flailed so badly that currently I think I can only see the 9am showing of Paddington 2. But we should admire this company’s perseverance and gumption. Though its stock has dropped severely, you can’t say it hasn’t accomplished its mission of disrupting the movie industry. AMC, for example, released a similar membership model in response to MoviePass. We can learn a thing or two about being bold and relentless, maybe not to the point of denial, but close. Even if we don’t succeed, there might be residual benefits to society.
  2. Ask for WAY more money! Before Juicero tanked, it got venture funds totaling over

    [Image description: A Bitmoji image of Vu with a quizzical expression, saying “srsly?!”]

    $134,000,000! You heard that right! 134 million dollars for a wifi-connected juicing machine! Venture funds even for the start-up business ideas—some of which are brilliant, many are insipid—are in the millions. Bitmoji, which is a cute app that turns you into a cartoon in hundreds of different poses, which you can copy and paste into text messages, this app got a start-up fund of EIGHT MILLION DOLLARS! We nonprofits, meanwhile, are like “Our mission is to end systemic poverty. Here’s our grant application for $19.” We ask for WAY TOO LITTLE to do things that are extremely complicated! Ponder this question with your team: “Is our organization’s work more helpful to society than a wifi-connected juicer?” If the answer is yes, ask foundations and donors for $134,000,000. 
  3. Increase spending on overhead and not talk about it! Here’s a little-known fact: More for-profits have an “overhead” rate that average over 25%, with some industries like biotechnology and software at 50%! But nobody really cares. We nonprofits, however, freak the frak out when our “overhead” gets over 10%. We really need to increase our “overhead” so we can hire the staff we need, pay them decent wages, and provide them ergonomic chairs not help together with duct tapes along with a working environment that has central heat and air-conditioning AND is also free of mice. Juicero, before it collapsed, bragged about having 50 full-time engineers working on its design, and who-knows-how-many other positions like sales and marketing and research! Can you imagine how much more we could get done if we were fully-staffed and didn’t have to rely on hybrid positions such as “Director of Development, Communication, Evaluation, and Janitorial Services”?! For-profits also don’t yammer on and on about overhead; they focus on the “bottom line,” so we should knock it off with the messaging on “overhead” and just focus on outcomes.
  4. Find creative ways to keep staff! Two words: Ball Pit! Large companies like Amazon and Google want to keep their employees happy, so they provide on-site gyms, subsidized food, access to company cars, and probably a unicorn petting zoo! A couple of times in my life I got the chance to walk onto the Microsoft campus, where they have full cafeterias providing delicious gourmet food for cheap. They were magical. We nonprofits need to learn this lesson! We need better perks for our team members! Weekly massages and unlimited hummus on tap for everyone! We’ll all be happier and more productive and we can more effectively address the problems we’re working to solve, hell yeah!
  5. Talk about ourselves a lot more! Every other commercial on TV now—for those of us who watch TV instead of mainlining ten episodes of a show on Netflix or something—is basically from GEICO. Who knows how much of their budget goes into marketing and communications, but it’s probably a lot higher than what we nonprofits spend (I’m just spit-balling, but it’s probably $43 per organization on average). Let’s up our marketing! The public needs to know about the issues we’re working on, because there’s so much misconception out there. Let’s have more billboards, more full-page newspaper ads, more television spots, maybe an occasional blimp. We should also hire more communication professionals instead of asking our board chair’s niece to manage the social media for mandatory service hours.
  6. Take more and bigger risks and accept failure as part of the process! One thing I do admire about for-profits is that they are willing to try stuff and accept failure. Look at Google Plus. And Google Glass. And Google Wave. Tropicana spent 50 millions on a crappy rebranding that was a total failure. Colgate tried to expand its brand into a line of TV-dinners, because people love thinking of toothpaste when they eat dinner. We nonprofits and foundations, meanwhile, freak out at the thought of the slightest hiccup in our plans. We all need to get out of this mentality and adopt the for-profit-like belief that trying stuff and failing is part of research and development. Embracing trial and failure is the only way we can tackle society’s complex, entrenched problems. At least, that’s what people told me on Google Buzz.
  7. Be very confident, even about stuff we know nothing about! I do get irritated when someone who clearly has never worked at a nonprofit tries to tell me how to do my job. It’s like a surgeon advising a carpenter on how to build a cabinet; dude, get out of my face before I strangle you with this tote bag I got at a conference. However, I do weirdly admire the brazen attitude and unearned confidence. Maybe this is something we can learn. We tend to be extremely nice people who put up with crap instead of ruffling feathers. But maybe we need to ruffle more feathers. We should exercise this muscle; it’ll help us push back against many of the ridiculous things that are preventing us from doing our work, like restricted funds and quarterly reports on a 5K grant or something.

There you go, there’s plenty of valuable stuff we can learn from our friends in for-profit. If we just demand a lot more money and not focus on “overhead” and take more risks and invest in staff and be slightly more arrogant and not sit on chairs that are duct-taped and maybe filled with a nest of mice, we can accomplish so much more than we currently do!

Reminder: Last week, I mentioned my colleague and occasional debate partner Joan Garry has a series of videos coming out this week that could be helpful. The series is free and covers the five pillars of a thriving nonprofit. Check it out. (The video series does mention Joan’s Nonprofit Leadership Lab, which has a monthly fee if you join, but the videos themselves are helpful even if you don’t join the Lab).

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