“The social sector wants to know who you are and what you care about before wanting to hear what you’ve done or what you’re capable of.”
– Jay Bloom, Bloom Anew
If you’ve decided to make the jump from the corporate to the social sector, recognize that you’ll be walking into a very different environment. Your knowledge, skills, experience, and connections may benefit the organization, but it’s a whole new ballgame in how they’ll play out.
High Level Strategy
| For Profit | Non-Profit |
| Goal: To achieve above average return on investment sustainably for the owners | Goal: To carry out a defined mission by delivering services in response to identified needs |
| Strategy may be construed using proven constructs based on market segmentation, buyer behavior, value chain economics, competitive dynamics, other factors | Strategy may need to account for issues with deep social complexity that are not solved easily |
| Above average returns generally proceed from competitive advantage | Mission generally advanced through collaboration across the sector |
Note: In Forces For Good: The Six Practices of High Impact Non-Profits, Leslie Crutchfield and Heather McLeod Grant cite nurturing non-profit networks as one of the six practices of high impact non-profits. Such networks consist of like-minded peers who use an “open source” approach and work in coalitions to influence legislation or conduct grassroots advocacy campaigns. However, high impact non-profits also live in the tension between the need for collaboration and the reality of competing against their peers in fundraising and grant acquisition.
Governance
| For Profit | Non-Profit |
| Senior business leaders with a high degree of organizational and fiscal expertise | Influential community leaders, program experts, funders, service recipients, etc. with varying expertise in management |
| Generally not involved in the day-to-day operations | Actively involved in fundraising; may be involved in day-to-day operations |
Senior Leadership Accountability
| For Profit | Non-Profit |
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Note: Non-profit leaders are more accountable to their employees than their for-profit counterparts. Non-profit employees tend to be mission-driven and passionate. They want their voices to be heard; they want to know that they are making a difference. Non-profit employees believe they could make more money elsewhere; they are less afraid of termination.
Financial Resources
| For Profit | Non-Profit |
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| Operational efficiency sweetens all funding sources | Operational efficiency may or may not influence funding |
Note: Resource availability in the social sector feels the influence of shifting political sands, federal, state, and local budgetary constraints, public awareness/interest, donor fatigue, etc. Committed funds may be withdrawn at will, thereby disrupting services and program outcomes.
Key Infrastructure
| For Profit | Non-Profit |
| Invests in technology, marketing, and PR at a level consistent with profit objectives | Limited funding for IT, marketing, and PR; all such investments scrutinized heavily |
| Impact: Investments improve operations via expanded market opportunity and cost efficiency | Impact: Employees lack proper tools to do their work; public lacks awareness of the issue area |
Note: A 2009 survey by Common Impact of over 185 non-profit leaders revealed that 79% of non-profits surveyed are spending 2% or less of their operating budgets to support key infrastructure (technology, public relations, and marketing). Compare this to the average 20% that service companies – the closest for-profit corollary to most non-profits – spend on building a healthy infrastructure. Less than 15% of non-profits have staff with functional expertise in technology, public relations, and marketing. Moreover, perceived “overspending” on infrastructure affects a non-profit’s seal of approval from rating agencies.
Organization Structure
| For Profit | Non-Profit |
| Hierarchy with clear lines of authority | Flattened hierarchy with a diverse power base |
| Leaders have enough concentrated power to gather input, weigh options, and make decisions | Leaders do not have unilateral power to make important decisions; they must lean heavily on their powers of persuasion, political currency, and shared interest |
| Impact: Relatively efficient decision-making process | Impact: Much slower decision-making process |
Culture
| For Profit | Non-Profit |
| Bottom-line results orientation Competitive (inside and out) Darwinian Risk taking Stress driven by organizational. style, competitive dynamics Legislated diversity |
Mission-driven with heart-felt commitment Cooperative More protective, inertial Risk averse Stress driven by organization style, funding concerns, magnitude of issue area, suffering of clientele Inherent/intentional diversity |
Note: You may experience grief/anger as you are truly present to the agency’s clientele and grasp the larger issues your organization faces every day. But as the Peace Corps motto suggests: It’s the toughest job you will ever love.