Conference Roundup: Learning From the Corporate World
Behaving like a business can have some real benefits for nonprofit organizations.
So said Kurt Aschermann, president and COO of Boston-based fundraising consultancy Charity Partners, speaking in the session “The Business of Fundraising: How Does the Influx of Corporate People and Business Models Help or Hurt Nonprofit Fundraising” at the DMA Nonprofit Federation’s 2008 Nonprofit Leadership Summit last week in Palm Beach.
It would be foolish for nonprofits not to begin exploring some of the practices instituted by their corporate partners, he warned.
Aschermann, who previously served as senior vice president and chief marketing and development officer for the Boys & Girls Clubs of America, said the organization reached out to corporations to get ideas on how they operated. BGCA, which is headquartered in Atlanta and has about 4,000 clubs nationwide, is a nonprofit that enables young people, especially those in need, to become productive, responsible citizens.
“We learned a lot from our corporate friends,” Aschermann said.
Among those lessons: that businesses just do some things better, such as hiring professionals, specifically those in marketing and sales.
“You get what you pay for,” Aschermann said, adding that not only do corporations hire the best and the brightest, but they “fire the lousy ones.”
“Nonprofits are not good at that,” Aschermann said. “We carry them, but they do us in every day. But they love the organization [so we keep them on.]”
It’s vital that nonprofits let go of those employees who no longer have a positive impact, he said.
Aschermann did caution that people who come from the private sector have to be educated about nonprofits, their staffs and the way things work, which often is quite different than in the for-profit world.
“People from companies are not used to having no resources,” he said. “They may not understand that you don’t have the resources to spend $1 billion to change (your organization’s) slogan.”
For-profit people also have some trouble working with volunteers and working toward consensus, he added.
“In the marketing department, they have trouble realizing the customer and the consumer are different people,” Aschermann said. “It adjusts the way you do marketing.”
Companies also taught BGCA that nonprofits need to cut down the decision-making process and jump on ideas and opportunities when they present themselves. BGCA pared its decision-making to a minimum by creating guiding principles.
“Action is sometimes more important than deliberation,” he said. “Speed matters. They’re not going to wait for us. Be fast in decisions and implementation.”
Also, Aschermann said, corporate partners know how to grow and maintain partnerships. He recommended nonprofits do what BGCA did — put together a core team to handle corporate partnerships.
“[Corporate partners] taught us how to behave as and with a partner,” he said.
One of the most important lessons BGCA got from its corporate partners is that an organization is a brand. Aschermann related that a 1992 BGCA survey showed that only 14 percent of people had ever heard of the organization.
“It helped convince the board we were failing,” he said, explaining that the blow helped trigger BGCA to create a brand strategy plan. Part of the strategy, for example, was that every chapter of the organization had to use the same logo. Chapters that didn’t follow brand strategy weren’t eligible for federal dollars, Aschermann said.
“The for-profits taught us we’re a brand and we better behave like it,” he said.
But the for-profit world isn’t just the teacher. It can learn a thing or two from nonprofits, as well.
“It’s a falsehood that the for-profit sector does it all better,” Aschermann said, especially when it comes to managing money. “Show me a company that makes 80 cents on a dollar.”
Nonprofit organizations are better at managing boards of directors, as well.
“These are boards where people pay their own way. We do it better,” Aschermann said, explaining that before he left BGCA, he and his staff added a clause to its board members’ duties requiring them to make the organization their preferred charity during their terms.
“We got the best people possible and had them do more,” he said. “Many of these people sit on many boards. [We told them] ‘You’ve got to make us first in your nonprofit world.’”
He added that board terms should be limited to one, since turnover can refresh a board and an organization.
One important trait of successful nonprofit organizations and for-profit companies alike is that they take what they learn and use it.
“Figure out what works,” Aschermann said, “and do more of it.”