Similar to trending nonprofit phrases like “mission creep,” “strength-based” and “values driven” – the phrase “sector blurring” is gaining more traction. It is an incredibly important idea and should be seen less as an idea but more as a best practice in both the for-profit and nonprofit sectors. Most people generally like the idea that nonprofits should learn from the for-profit sector, and vice versa - but what does that actually look like?
Most successful nonprofit ventures today have included a social enterprise program or fee-for-service model to bring in additional income to their organization. Likewise, many effective businesses are investing in their marketing and community investment departments. Businesses are launching corporate responsibility campaigns, encouraging employees to volunteer and developing formal foundations that have a legal obligation to donate annually.
The distinction between a business and nonprofit was once very defined. Now with a growing number of social enterprises, B-corporations, impact investing and cause marketing campaigning this line is blurred - the line is as wide as a football field. The blurring of these boundaries is seen by some as generally positive but also a confusing era in business. Whether your goal is to maximize stakeholder value or maximize graduation rates in the community, there are some underlining lessons that each sector can learn from each other.
Lessons to learn:
- Let your mission guide you. Whether it is to make a profit or serve the community, both play a role in our economy, communities and working environment. Every idea starts out with a goal. Stay focused on that goal, your dream and keep refining your vision. As you grow and develop, make sure your mission stays forward facing. Pivoting your goals and innovating your programs is great, but always keep your vision in mind, as it will guide you and define your venture.
- Create a community. Develop your stakeholders, respect them and empower your supporters. Whether you are selling a product or providing an afterschool program, you need a community of supporters. These supporters will become your base, keep you accountable and keep you informed. Your customers or clients are the most import piece of your puzzle. As you build your community of supporters, they will support you.
- Build your Board and Bench. In both sectors the Board of Directors influences the work, drives funding and develops policies to create a solid business model. Similarly, in both a nonprofit and business, your team is important. Fostering new leadership, management and a hard-working and trusting team is essential for success. Strengthening both your bench and your board are critical to making a profit and making a positive impact.
