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Nov 8, 2011

Changing Gen Y’s Perception of Nonprofits, pt. 3

In the second installment of my blog series, I addressed the need for nonprofits to offer profitable “low” mission goods/services in order to offset the inherent money loss that is a result of their Key Mission activities. When an organization understands and operates under this concept, they jump over the first hurdle towards the finish line of nonprofit success.

So when is society counterproductive? First, budget balance is always the wrong policy. In goods times nonprofits need to be profitable and donors need to stick by them to maintain productivity and prosperity. It is not a good idea for donors to cut the profitable nonprofit off “because it doesn’t need the money.”

If an organization has a detailed financial plan that strategizes for recession, then it needs those profits from good times to remain reliable in tough times. Second, nonprofits who run deficits during recessions are not necessarily bad managers. Budget balance is actually a demonstration of failure to maintain Key Mission services during tough times.

Yes sometimes we view deficits as management failure.

But I ask you, how many for-profits lost money in 2008 and 2009? Did we fire all those CEOs? No, because we don’t use the word “deficit” when we discuss about for-profit finance. The word “deficits” has a negative connotation, but “lost $ in the third quarter” seems routine.

Bringing my series full circle, I’ll take you back to the original presentation at TEDx Claremont College. I closed my talk with this thought: “When nonprofits properly link their mission to money, the mission is so appealing, the challenges so great and the excellence so widespread that we all should aspire to a career in the nonprofit sector.”

I hope the students at Claremont heard that message. Please view the complete presentation below, recording curtsey of the amazing event organizers at TEDxClaremontColleges.