Businesses in America divide into two categories, non-profit and profit. The difference is the mission of the organization. Profit businesses benefit their owners and shareholders, and non-profit businesses benefit the "greater good". Because of this difference they have; (1) different regulations, and (2) different tax burdens.
Beyond these two differences, they are essentially the same. They each require talented management to survive, and they must have financially viable forecasts and clear missions. Without these fundaments, they fail. Just think of the struggling "Mom-and-Pop" being overtaken by the new Wal-Mart Super Center, or the local nature advocacy group being replaced by a new chapter of the Sierra Club, etc. Their members relocate, and the mission goes on.
So why not surrender to Wal-Mart or in this case, the Sierra Club? If you have the same mission, go ahead. It might serve you well to join someone else instead of compete with them. But most non-profits are created to fill a need that isn't being met. If a community needs money for their fire department, they start a fire defense fund to buy equipment and pay dispatchers. If a school wants to create scholarships, they set up an endowment.
But once the idea is hatched, the organization must be managed. Why do 95% of small businesses fail in their first five years? Because only 5% of the people who start them can manage them. Non-profits are no different.
The number one goal should be profitability. Non-profits must create positive revenue streams and set sustainable financial goals. Money can accomplish if it is properly managed. Too many organizations rely on small groups of big donors to fulfill their long term fundraising goals. These gifts are great supplements, but a businesses cannot succeed if there are only a handful of customers.
Non-profit leaders should create ways to engage their constituencies. Make the people come to you. Find a way to sell your cause and make people want to buy it. Even if people are only buying satisfaction, everyone wants to help a good cause profit.
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