I had lunch the other day with a brilliant woman who recently left her job as a finance VP at a major corporation to join a medium-sized non-profit as the new CFO. She was tired of the corporate grind and wanted more meaningful work, but things were quickly going south.

Good grief,” she sighed. “We spent an hour at the board meeting arguing over the decorations at the upcoming gala. Our strategic plan hasn’t been updated in two years. We have zero in the way of metrics and quality improvement. It’s one big conversation club– it takes months to make a decision. My old company was ruthless, but at least we got stuff done. I’m beginning to miss it.”

Sound familiar? Here’s another recent conversation with another respected leader, a highly successful executive director and board member for some of the nation’s most prominent non-profits:

After 20 years as an Executive Director of 3 organizations and a board member of many others, I launched a tech startup. Let me tell you: working with all these young people, I was so delighted with the urgency and drive and risk tolerance I saw in them. These qualities are largely missing from so many nonprofits.”

The nonprofit sector is filled with beautiful people and amazing programs. But as these observers believe, too many of nonprofits are held back by cultural characteristics that inhibit their function and ability to scale.  Consider that only a handful of non-profits in the last 50 years have grown past $50m in revenue, while tens of thousands of other companies have achieved this growth milestone.

It’s an urgent issue with tremendous consequences. Around the world, nonprofits have the job of tackling some of our most urgent challenges. Poverty. Education. Environmental destruction. Injustice. Whatever the challenge, and there are good non-profits hard at work on it. Together, the effort strains millions of people and consumes trillions of dollars. So to be effective, organizational leaders must to ask challenging questions, what management expert Jim Collins calls “confronting brutal reality.”

Let’s look at two sets of cultural values. Which one would you associated with effective practice and delivering benefit to the world?

Organization #1:

  • Primary concern is given to how people are feeling about the organization– performance expectations for specific visions are unclear or not established. 
  • Most people work long hours at low pay– this is “expected” and normal.
  • If a change in organizational direction is considered, most conversations focus on the risk of the change, not the benefits. 
  • Decision making process is unclear. Stakeholders offer subjective opinions for their preferred choices. 
  • The organization believes it deserves money because of the inherent virtue of its work.

Do any of these descriptions resonate? While many recognize these cultural deficits inhibit performance and growth, most accept it with fatalism: oh, it’s just a struggling nonprofit. What can you expect? 

But we can do better. Let’s look at a different set of cultural values, ones associated with the most effective organizations, for- or non-profit.  leading-edge nonprofits with bold, entrepreneurial leaders and gifted staff. People who work together as a team to tackle the biggest challenges. They have built a culture of high-performance. These organizations look like this:

  • they have a “go big or go home” attitude. They measure how much of the problem they are tackling with hard, simple numbers, and they push hard to solve all of it. 
  • they have a specific plan to solve the entire problem– with hard numbers, accountability, and an explanation of how they will pay for it all
  • they are biased toward action, experimentation, and risk, driving forward with a sense of urgency and shared purpose
  • they are collaborative–everyone works hard and supports each other
  • they focus on the smartest ways to generate revenue so they can recruit and retain top people and grow the org so it can solve problems, not just nibble at the edges.

Consider this quote from a recent article in Crunchbase News: “How nonprofits think, their culture, and how they solve problems and use technology shouldn’t be different because [they are] a nonprofit.”

It is worthwhile to ask yourself: where do we sit along this spectrum? Should we be thinking and talking about this? And doing things to move from one part of the spectrum to another?