Home Others How The Nonprofit Experience Is A Teaching Tool For Startups

How The Nonprofit Experience Is A Teaching Tool For Startups


A new business has many hurdles to overcome. Entrepreneurs can learn a lot by studying the strategies employed by non-for-profit organizations who manage to stay operational despite the odds. 

There are many parallels between a startup and a nonprofit, despite the fact that the missions couldn’t be more different. An entrepreneur is generally seeking profit and fame. A nonprofit is trying to address a certain issue or need. How could the nonprofit teach an entrepreneur anything?

Nonprofits Don’t Have Deep Pockets.

A corporation can lose big money in one area and make it up in another. Entrepreneurs generally don’t have deep pockets. Small businesses could go under from one wrong decision. This is often the case with nonprofits that struggle from month to month to stay afloat.

Nonprofit managers must work very hard to establish a secure cash flow. There is often little wiggle room for growth or experimentation. That forces the nonprofit director to be proactive in raising money, even when he or she would rather be pursuing the nonprofit’s mission. They must write grants, reach out to business partners, and fundraise with the public. If they want to expand or experiment, they have to be in a good financial position, or they risk destroying what has been built.  

This jumping through hoops is also what entrepreneurs find themselves doing. You have to be vigilant about cash flow. There can’t be growth without active pursuit of capitalization. This may mean courting and winning financial partners or working hard to meet loan requirements. There’s no letting up as the entrepreneur must pursue funds while also keeping the business going in the right creative direction.

Nonprofit Managers Stay Late and Arrive Early.

Like entrepreneurs, nonprofit managers are always working. They don’t mind putting in more hours if it will bring success to their organization. Their dedication is usually a sign that they believe deeply in their mission. They believe that it is critical for society, not just themselves.  

This type of energy is something that many entrepreneurs have naturally. They recognize that they must work hard to position themselves for success. Laziness isn’t an option. If there is a job to do, they must do it themselves.

Neither the nonprofit manager nor the entrepreneur can afford to gamble that their employees will be as committed as they are. 

To meet their goals, they must work and lead simultaneously. They don’t get to sit in their ivory towers like professors or their executive suites like corporate CEOs.

Employees Work for Less.

Nonprofits must learn how to hire and maintain their talent. They can’t use a paycheck to lure the best to their staff. Employees won’t be earning top dollar. So it’s important the nonprofit be able to sell itself in other ways. When conducting an executive search, they have to be flexible. They’ll need a recruitment research firm rather than a pay-per-person headhunter.  

For a nonprofit manager, every dollar spent on finding staff is a dollar lost to the mission. Still, they need to find talented people who are willing to trade private sector wages for a public-oriented mission. Often they find this type of employee in three ways. They find recent college graduates who are just starting out, middle-age workers who are changing gears within the workforce, or soon-to-be retirees who want to make a difference.

Startups will find those same groups of people are a good skills match for their talent search. They want workers who can be fulfilled without huge paychecks. This requires a type of work ethic that is motivated by the entrepreneurial goals rather than by money alone. 

If you are an entrepreneur, you should look to nonprofits for inspiration and even guidance. After all, startups need all the help they can get.