Not-For-Profits are businesses.
Recently, government entities, both State and Federal have begun insisting that Not-For-Profits act like “real businesses”. From record keeping to annual audits, they want to see the same sort of professional practices as businesses in the for profit world. The problem is, they may not want to treat your NFP the way they would a retail supplier. For instance, one of my recent clients has been waiting 6 months for payment for services provided. How would the sandwich shop down the road react if you insisted they provide lunch every week for 6 months without pay? Then there are government contracts that require housing be made available for up to 100 clients, but will only pay for those rooms that are currently being used?
Not-For-Profits are a business, and just like any business they can’t continue without sufficient income to meet their costs. But many NFPs seem to believe that it would be wrong for their business to turn a profit. Nothing could be further from the truth. As with any business, costs of doing business increase for NFPs, even when your income doesn’t. And as the old saying goes, if you’re not moving forward, you’re falling behind. Most NFPs do their best to run lean in order to direct as much funding to their cause as possible, but even a small office staff has to be paid. This concept seems to be news to many funders who limit their donations to field work. I get it, we all want to feel that our generosity is going directly to those we want to help, but what about those who are actually providing the services? How about the people in the office making that work possible?
