Rosetta asks: what’s one thing nonprofits could do to improve the sector? My answer is, be ruthless about money and operate with heart. Sound provocative? It’s meant to get your attention. I think more nonprofits could benefit greatly from an immersion in business thinking. After many years working with both sectors, I offer the following observations.

Nonprofits exist to ask for money, so they can do good. Businesses exist to make money, while they do the good that their customers want. See where I’m going?

The most basic transaction is at play: people willingly, sometimes even obsessively, provide money in exchange for something they desire. Where this parallel implodes is that businesses make no secret that they are selling a product or service. Their organizational structure, performance expectations of staff, and all processes that get customers in the door, paying and satisfied support this common goal. If they don’t, the business fails.

Nonprofit leaders have the same skills and resources available to them as their private sector counterparts. In fact, a recent study by the Nonprofit Quarterly showed that nonprofit leaders outperformed for-profit leaders in 14 out of 17 leadership qualities, including persuasiveness, encouraging participation and sharing credit to name a few. Business sector leaders were better at coping with stress, push and pressure and maintaining energy. This doesn’t surprise me - as the report comments, nonprofit executives rely more on personal vs. hierarchical power. A telling finding: nonprofit leaders tend to rate themselves lower.

If more nonprofits harnessed the great leadership qualities their staff possess, while adopting the established best practices of business, imagine what could be achieved. I’ll be offering a free teleseminar on this very topic in a few weeks time. Watch for registration details on this site, or get on my enewsletter list to get your invitation first.