PDF Managing the Non-Profit Organization

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Understanding the aspects of nonprofit management will help you apply the appropriate management principles to your organization. Review and understand the requirements under which you must operate your organization to stay within the laws governing your nonprofit. Some nonprofits are not governed by the IRS code--the nonprofit status is granted by a state and you will only need to follow that state's regulations. If you have received a c designation from the IRS, you'll have to follow the regulations for your particular designation.

Determine whether your organization has an IRS c classification. Your accounting practices and allowed operating methods will differ for different classifications. For example, a c 3 organization is considered a charity, and donations made to the organization are tax-deductible. A c 6 organization is tax-exempt, meaning it pays no taxes on most income earned, but donors to the organization do not receive a tax deduction for making a donation.

An example of a c 6 organization would be a trade association of plumbers. If that plumber's association set up a c 3 foundation, the foundation's donors could write off contributions. The c 3 foundation could conduct charitable, research or educational activities, but not promote the industry or plumbers, which the c 6 association could do under its IRS designation. Read and understand your bylaws to ensure you follow the requirements to operate the organization under which your IRS status was granted.

For example, if your bylaws state that you must have seven board members and a vote by the membership each year to elect board members, you must follow these bylaws to keep your IRS status. Create job descriptions for committee members, with the purpose of the committee, scope of work and responsibilities of committee chairs and members.

Many nonprofits solicit volunteers, then don't give them clear directions on how to operate their committees. Groom future board and committee members in advance of their service by recruiting potential officers and chairs to serve on committees. Recruit from your membership base, industry vendors and suppliers, academia or well-known celebrities or industry leaders.

Your bylaws may have guidelines for board participation, so review them prior to making invitations. They convert what you want to do into accomplishment. Augustine said. Strategies convert intentions into action and busyness into work. Strategies are not something you hope for; strategies are something you work for.

You need a strategy for marketing , improving , people , money , and time. Quantity without quality is the worst thing and will result in a total failure. Then that goal must be converted into specific results , specific targets , each focused on a specific audience , a specific market area. How are you really going to reach this specific segment.

Next comes communication —lots of it—and training.


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Then logistics what resources are required. Then feedback and control points. But one does not compromise on goals, does not pussy-foot around them, does not try to serve two masters. Usually, there is no lack of ideas in non-profit organizations. What is needed is an innovative strategy. The successful non-profit organization is organized for the new—organized to perceive opportunities. One strategy is practically infallible: Refocus and change the organization when you are successful.

Improve the areas of success, and change them. And so the executives who run innovative organizations must train themselves to look out the window, to look for change. The first requirement for successful innovation is to look at a change as a potential opportunity instead of a threat. Every one requires thinking through anew. Advertising and selling are afterthoughts. I would add that it produces positive value for both parties.

Managing the Non-Profit Organization—Principles and Practices (by Peter Drucker)

They make assumptions based on their own interpretation of the needs out there. How do you get a response from market research? What must I give in order to get? How can I add value to the other party in such a way that I add value to what I want? Reciprocity and exchange underlie marketing thinking. How do we stand out in some way? On the other hand, marketing would suggest that it would be more successful if it defined its target group, whether it might be singles, divorced people, gay people, or whatever.

How do you orchestrate very diverse groups and have a successful institution? The market, very largely, will determine the character of the institution and the character of the product. Acquaint donors with what you are as an organization so they can identify with your goals 86 , and present a case for support which spells out the magnitude of the challenge, what we propose to do about it, how realistic it is to achieve that challenge, and how your gift can make a difference, You are building a constituency, understanding, and support.

The most important person to research is the individual who should be the customer. The way to train people is behaviorally: This is what you do. Non-profit people must respect their customers and their donors enough to listen to their values and understand their satisfactions.

Non-profit institutions tend not to give priority to performance and results. Yet performance and results are far more important—and far more difficult to measure and control—in the non-profit institution than in a business. The really good ones create a want. Two common temptations have to be resisted. First: recklessness. Performance means concentrating on available resources where the results are. But equally dangerous is the opposite—to go for the easy results rather than for the results that further the mission.

They usually are symptoms of the need to change the organization.


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  • And manners are the social lubricating oil that smoothes over friction. Trust is mutual understanding.

    Managing the Non-profit Organization: Principles and Practices

    Not mutual love, not even mutual respect. If you start low, you can never go higher. Slow is different than low. One features performers. Force your people, and especially your executives, to be on the outside often enough to know what the institution exists for. There are no results inside an institution. There are only costs. Adjourn it so that everybody has a little time to think. Important decisions are risky. They should be controversial. Acclamation means that nobody has done the homework. But which question is each trying to answer? Then, you gain understanding. One way, ask the two people who most vocally oppose each other to sit down and work out a common approach.

    But far too many decisions remain pious intentions. There are four common causes. Performance is the ultimate test of any institution. Every non-profit institution exists for the sake of performance in changing people and society. But there is also a temptation to downplay results. There is the temptation to say: We are serving in a good cause.

    That is not enough. If a business wastes its resources on non-results, by and large it loses its own money. Service organizations are accountable to donors, accountable for putting the money where the results are, and for performance. So, this is an area that needs special emphasis for non-profit executives.

    Good intentions only pave the way to Hell. This is the time span in which we do it. This is who is accountable.

    This is, in other words, the work for which we are responsible. People decisions are the ultimate—perhaps the only—control of an organization. Next, the executive forces himself or herself to look at more than one person. What have they shown they can do in their last three assignments? One can always relax standards, but one can never raise them. The only test of performance in the top position is performance in the top position. In the end, what decides whether a non-profit institution succeeds or fails is its ability to attract and to hold committed people.

    Are we holding them? Are we developing them? The true test of a relationship is not that it can solve problems but that it can function despite problems. And their success is my success. David Hubbard. In no area are the differences greater between businesses and non-profit institutions than in managing people and relationships.

    Managing the Public's Trust in Non-profit Organizations

    But the responsibility for developing the work plan, the job description , and the assignment should always be on the people who do the work. The effective non-profit executive finally takes responsibility for making it easy for people to do their work, easy to have results, easy to enjoy their work. That brings satisfaction and self-respect. Workmanship counts, not just because it makes such a difference in the quality of the job done but because it makes such a difference in the person doing the job.

    Without craftsmanship, there is neither a good job, nor self-respect, nor personal growth.


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    • For good performance, we give a raise. But we promote only those people who leave behind a bigger job than the one they initially took on. The right decision is to quit if you are in the wrong place, if it is basically corrupt, or if your performance is not being recognized. Promotion itself is not the important thing. What is important is to be eligible, to be equally considered. If you are not in such a situation, you will all too soon begin to accept a second-rate opinion of yourself. The usual need they feel is to change the routine. An unexpressed need may be that they no longer are learning.

      When you stop learning in a job, you begin to shrink. The excitement is not the job—it is the result. Nose to the grindstone, eyes on the hills. If you allow a job to bore you, you have stopped working for results. To understand where you best belong. To make high demands on yourself by way of contribution to the work of the organization itself. To practice what I call preventive hygiene so as not to allow yourself to become bored. To build in challenges. But the human race is not too good at it yet because organizations are pretty recent inventions. There is a strong correlation between what we hate to do and what we do poorly.

      Too many think they are wonderful with people because they talk well. What is the purpose? Who is the master? And all worlds are small worlds. I think that women probably have to do it a little better, and a little harder. But in fact, the greatest attribute a woman can have going in any organization, is to play as a team member. My role is to facilitate their brainstorming and thinking. Leaders are not born, nor are they made—they are self-made. On the contrary, one is always conscious of them. But one can only overcome weakness by developing strengths.

      Non Profit Organization

      Achievement comes form matching need and opportunity on the outside with competence and strength on the inside. One is improvement —to do better what you already do reasonably well. The second is change —to do something different. Both are essential. Many achievers have discovered that teaching is one of the most successful tools. The teacher usually learns far more than the student. Self-renewal is not a warm glow. Both are action.