- represent 7.8% of GDP
- employ 10.5% of the labour force (excluding volunteers)
- deliver 2.5 times the economic punch of the agri business and 6 times as much as auto manufacturing
- amass $9 Billion in annual donations
- number 150,000 registered charities and non-profits
Examining the similarities between for-profit and non-profit businesses will help to explain their differences. What they have and do in common is what you would expect (to a greater or lesser degree): visions and goals; human and financial capital; organization, planning and systems; positioning, competition and marketing strategies; customer relationships; costs and revenues.
But their fundamental purposes are quite distinct. Profit-seeking businesses are about selling and buying ideas, products and services – profit ‘denying’ organizations exist to solicit third party support to fulfill unmet social needs.
The work force, management and boards of the for-profits are almost exclusively paid employees; for non-profits, it’s a mix of mostly over- worked volunteers and a few employees.
For-profits sell to and serve customers in exchange for revenue. Non-profits help and serve beneficiaries by deriving revenue largely from third parties (donors, governments, the public).
These dynamics and others tend to shape their different cultures, work environments and sometimes attract different people. For example, it can take softer skills to manage a team of medical volunteers in the field than it does to drive a department in a hospital. Colleagues competing for territories or quarterly bonuses may relate differently than those collaborating to reduce homelessness before winter. Marketers trying to differentiate their brands may have ample budgets derived from last year’s profits or company financing, whereas marketers attempting to raise awareness and fundraise may have to innovate with less because of donor fatigue.
As a service provider, consultant, volunteer and employee with many non-profits in a variety of capacities over decades, I’ve come to recognize one significant differentiator of that sector – PASSION. It’s almost inevitable that non-profit clients, managers, marketers and bosses are going to be more enthusiastic, engaged and motivated than their for-profit corporate colleagues. Causes and advocacy can provide more meaning and purpose to the job and those intangibles fuel passion.
I like to think of passion as the prerequisite to excellence in any endeavour. So, if you are a non-profit looking for staff, a marketing firm or a volunteer – look beyond the credentials for passion. If you are a service provider or volunteer looking for a non-profit client, look beyond the board and the budget for passion.
1 The sector is varied – it includes slightly different entities: not-for-profits, non-profits, charities, foundations, social enterprises.
2 Charities and Nonprofits a Strategic Component to Canada’s Success’, Posted by Brian Emmett, Chief Economist, Blog@Imagine Canada, Nov. 12/13