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Does Becoming More “Business-like” Mean Selling Your Non-profit’s Soul?

Has your organization begun to introduce for-profit business practices to become more efficient, innovative, or raise more money? Today it has become acceptable, even expected for non-profits to become more crafty to stay afloat, but at what cost? While for-profit techniques may generate more revenue for your cause, are they threatening to undermine the culture of charity? Have your say!

For-profit for the Non-profit

What does it mean to adopt business practices? According to Bill E. Landsberg in The International Journal of Not-for-Profit Law, adopting for-profit techniques means a shift to emphasizing quality, efficiency, flexibility, innovation, and “above all a disciplined focus on the financial bottom line, the for-profit’s raison d’être.”

Such practices can drastically improve your bottom line. However, there are drawbacks. Adopting such practices could effect your image, your staff morale, and could undermine your mission – the metaphorical soul of your organization. According to Landsberg:

The business practices the nonprofit embraces to assure its survival threaten to undermine its culture, mission, and public image. In an effort to save its bottom line, the modern nonprofit risks losing its soul.

Landsberg points to a real threat. After all, a business model that emphasizes the bottom line doesn’t fit well with community enterprises with a focus on public service. But not all business practices will be detrimental to a non-profit. So the question is: where do we draw the line?

A Fine Line

While the public may not have trouble with a non-profit becoming more efficient, say by getting a super-efficient database (like Sumac) that cuts administrative costs down significantly, their perception may change when that non-profit employs business-like marketing strategies, as you’ll see in the case study below.

Likewise, while the public certainly doesn’t have any qualms about The Salvation Army or an art gallery running a store to generate additional revenue for their organization’s services, the public may not be as understanding when such an organization invests in the diamond industry or wind turbines to do the same.

So where do we draw the line? Non-profits cannot deny the benefits of adopting a more aggressive business model, but how far can you go before selling its soul? Here’s a case study to get you thinking about that very question and about what the essence of charity is.

Case Study: Unicorns in the City

“The Science Centre is reviewing the footage frame-by-frame to determine whether Hickey-Jones’ claim is legitimate,” the press release stated. The (OSC) put the video online, established a “unicorn hotline” for future sightings and advised people not to use flash photography, should they spot a unicorn. The release listed a group called Narrative Advocacy as a source for additional information.

A few days later, a second press release announced the opening of a Mythic Creatures exhibit at the OSC, which featured fossils of extinct animals, along with a “life-size” model of a unicorn.

A quick web search would reveal that the name of the unicorn-spotter bore an uncanny resemblance to Narrative Advocacy’s group account manager, Peter Hickey. Narrative Advocacy is an agency that “develops strategy to manage, shape and anticipate public opinion.”

Public opinion on the hoax was mixed, while most media immediately tagged it as a PR stunt.

The OSC is an operational enterprise agency of the Ministry of Tourism and Culture and also raises funds from donors. CEO Lesley Lewis chaired the Science Centre World Congress in 2008 and she was instrumental in creating The Toronto Declaration, which aims to unite science centres worldwide as they help their audiences “contribute to dialogue on topics such as climate change, human health, the need for renewable energies, water shortages and HIV/AIDS.”

Taken from: Unicorns, Grassroots, and Silos: A (Brief) Look at the Perils and Positives of Using For-Profit Models in Nonprofit Organizations. By Benita Aalto.

Have your say: was it wrong for this non-profit science organization to create a hoax to boost ticket sales for their shows? Vote




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