Why Non-Profits Fail To Make An Impact

Why Non-Profits Don’t Make The Impact They Wish (& What We Need Instead)

  • Startup Visions
  • Avatar The Envisionary
  • Startup Visions
  • Avatar  by The Envisionary

  • Non-profits seem to be perfect for this human-centred world we find ourselves leaning towards each day, but there’s a reason so many fail to make impact.

    It actually pains me to say this, but non-profits don’t make an impact in the way they set out to.

    The heart of a non-profit is certainly in the right place when the focus is beyond the purely selfish capital gain mindset of many profit-led companies out there, but when it comes down to who still exists in 5 years time it’s usually not the non-profit, and even if they do still exist the impact they’ve created is often much lower than what they wished it was.

    That’s part of the problem though, ‘wish’. There’s a big difference between ‘wish’ and ‘will’. Non-profits are often run on a ‘wish’, an agenda for positive change or impact, but because they are (by nature of their business model) cash-strapped and reliant on the donations of benefactors a part of their potential impact is in the hands of whether or not they can get the funding or not.

    With ‘will’ the aim is different. It’s seeking to create solutions and keep motivated to make things happen with a will to succeed and find a way. Only, too often we find that a business’s will is generally towards making profits at any cost.

    Why Non-Profits Need A Profit-Making Mindset

    We may think ‘if only people would use that same motivation to make money to also make a difference’, but money is something tangible that people can often relate success to, whereas ‘making a difference’ or an impact often is the opposite, something not truly tangible or countable, and therefore it’s much harder to measure its direct impact.

    It’s exactly this difficultly in being seen as profitable AND impacting that can stop many non-profits from getting the kind of support they need. Yet, even if they did have a well-backed movement that spread through social media channels, it would take more than just growing awareness to help fuel their mission into realisation, into actual impact.

    The non-profit model is run on the principle of cost-saving resourcefulness or shoestring budgeting, rather than on strategic thinking and innovation, and it creates the self-fulfilling downfall of many non-profits.

    Instead of focusing on how to make an impact using resources to their maximum they instead seek to cut down on resources wherever possible (to not have to spend much), and in their eyes become a more attractive ‘streamlined’ proposition for generating donations.

    Non-profits need to focus on maximising their resources rather than over-streamlining them
    Non-profits need to focus on maximising their resources rather than over-streamlining them

    Yet, whilst profit-based companies could learn a thing or two about being less wasteful, a non-profit could do well to not base their success on how little they spend.

    Spending wastefully is no grounds for a successful non-profit (or profit) company, but not spending at all is a recipe for creating no impact at all.

    This goes beyond the non-profits and into the mentality of many overly resourceful ‘green’ thinkers of today too.

    Why Impact Fails When Resources To Leverage Is Low

    Non-profits may want to be more economical with their waste (a good thing and one which will help their environmental impact at least) but they can’t lead missions of helping thousands (or even millions) of people without some form of strategic plan to create impact beyond just their own words.

    I know. I tried and failed miserably.

    It’s just simply not possible to stay as a one-man (or woman) band for too long. At first, it might make sense whilst you develop your vision and couple it with your knowledge and your ‘personal fit’ (a term coined by 80000 Hours – an example of a very effective nonprofit imo), but over time you will just find the desired impact you wish to make will fail to ignite at all as you simply aren’t channeling enough people or resources into making that vision happen, and it becomes many people’s loss for grand visions to remain just that, visions that didn’t manifest into actualisations.

    Having learned the long and hard way myself, I researched why it is that so many of us (individuals and non-profits) are so interested in creating purposeful impact-led lives today but so few of us actually are able to turn those ideals into reality.

    A big part of my findings (over a few years) was in just how much we are still attached towards profit as a necessity for impact.

    The issue many people might have who wear their anti-capitalist green thinking caps would be how corrupt some profit-led organisations can be (although some non-profit ones can be just as corrupt), and how it’s a shame just how much ‘money’ is wasted in the world by those who make a lot and don’t use it to help anyone else other than their own vain wishes or need for comfort, luxuries, and survival validation.

    It used to sicken me too as I had the same idealist dreams that the world could become a better place if more people just became more resourceful minded and less selfish, but then I thought about the actual impact I was making in the world and whilst it was theoretically very large in terms of ‘wish’ it was actually next to nothing in terms of real impact or ‘will’.

    You see, ‘will’ finds ways to innovate and problem solve. ‘Wish’ doesn’t. ‘Will’ finds a way to make an impact beyond themselves. ‘Wish’ just hopes it will come to them.

    There’s absolutely nothing wrong will having the ‘will’ to create a better world but ‘will’ comes with a plan, and that plan needs people, it needs resources, research, talent, drive, technology, and development.

    Those things come at a cost.

    Why Non-Profits Need Profit-Based Companies To Create Impact

    The twisted irony within the profit/non-profit organisation divide is how non-profits pride themselves on the good humankind ideal of wishing to make an impact, to help people. We can’t deny that their work is a lot more human-led than many profit-based organisations out there, but it’s the profit-based ones that end up making the impact (whether positive or negative).

    Now, of course, we may still wish that those companies with the money would ‘do the right thing’ and put it in the places that need the investment, instead of into private luxuries, but we should remind ourselves of a few things first.

    Firstly, those who made money to that extent know a thing or two about leverage, and that is absolutely essential towards creating impact.

    Secondly, that investment or donation your non-profit or mission needs to gain traction isn’t going to come out of thin air, and if you can’t get investment then you better have an innovative and strategic plan up your sleeve rather than waiting on the ‘good nature’ of enough people or profit-led businesses to give up their cash for something that doesn’t really provide an ROI for them.

    Thirdly, markets and demands change so quickly these days, and if your mission is static and doesn’t show growth opportunity or adaptability too then you might miss the small window that your plight would be popular enough for investment.

    Of course, the ‘mission’ might well be the important statement at the ‘heart’ of a non-profit but in reality without money or the strategic focus many profit companies possess in abundance then the mission often can’t come to be, so it’s vitally important that non-profits show an investable strategy that gives profit organisations a reason to back them.

    This starts with a strategic plan of exactly what the aim of the non-profit is, with a clearly defined end goal and a path towards getting there in which potential investors can easily look into and decide whether their investment is worth it.

    Non-Profits seek impact as making a positive difference in humanity

    To any non-profit, they would automatically think that their ‘change the world’ plan is worth it but that seeps back into wishing again. What needs to happen is a ‘connect’ between the values and qualities of a non-profit and that of a profit.

    Non-profits might be in luck though, as the world is changing towards more human-centered needs anyway.

    Why Non-Profits Are In A Potentially Great AND Risky Position Today (Depending On Their Next Steps)

    Instead of a business profiting from simply making something addictive in a consumer market within the attention economy, many consumers are becoming more aware of their own needs and the value they expect businesses to be providing.

    This human-centred value is something natural to non-profits and this is where profit-based companies can work effectively with non-profits to ensure the human-centred impact is delivered.

    Non-profits may feel a bit ‘sick’ at the idea that their good heart is being exploited by profit companies, like they are ‘selling-out’, but they would have to ask themselves what their main aim was in the first place? Was it to make an impact or to make a profit?

    If non-profits didn’t seek to meet-in-the-middle then it could only be a matter of time until profit companies started to seek to profit from this ‘human-value economy’ anyway, to ensure people donated to them and their promised charity appeals. After all, many more people would find a profit-led company who populate the search engines (or even own them) than they would charity organisations, and non-profits simply wouldn’t be able to compete this way.

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    However, the golden dice in non-profits hands is the desire to help people improve. With that enthusiasm lots of ideas can be created, lots of channels for potential growth, but they can only be led to growth with a plan that matches that enthusiasm. Otherwise, non-profits are in danger of sounding like everything to everybody, and not having a clear focus that can lead towards measured impact.

    As mentioned earlier, impact is helped immensely by leverage, and if non-profits don’t have enough scope for growth or trust in people and resources to empower other people to come within the organisation to innovate potential growth channels then that potential impact can be easily lost.

    The same can go for understanding the nature of competition. There can be a naive aspect amongst direct missions that aim to save the world but don’t see how non-profits can be in the same competitive market as profit-based businesses. There’s often a reluctance to accept that competition can exist and therefore a reluctance to adapt to changing needs.

    They might not see how they could be fighting for the same volunteers or media coverage because they assume the non-combative nature of non-profits is to ‘love not to fight’, but this lack of ‘will’ to truly make their vision cemented in the world through building up a strong and adaptable base can also lead towards many non-profits not being strong enough to make an impact.

    This can actually create tension within typical green thinking non-profits, where the prelude of unity and care for the world can end up leading to a fiery judgment of others taking away their right to make something good, but this is exactly why a ‘wish’ isn’t strong enough to help non-profits truly create impact.

    They need the ‘will’ to make it happen when competition surfaces, which it undoubtedly will if the trend is popular enough.

    It’s this pragmatic approach that can also stop non-profits from innovating fast enough, from seeing smarter ways of gaining investment. They might be hoping to land a big donor to cover all their costs and make their dream finally happen, but a pragmatic non-profit would be working more on building communities of like-minded changemakers, and seeking smaller donors who feel like they are part of the journey rather than just big donations that are simply targeted to keep them afloat.

    Impact comes from that leverage of focusing on bringing enough passionate people into the organisation who want to help bang the drum, not through just a voice on social media, but through active volunteering to be involved in a purposeful, value-led, impactful cause.

    Many non-profits start out that way, but quickly burned out because there wasn’t enough development of personal relationships or the empowerment of a team (or merging of other like-minded orgs) to grow beyond the initial struggles, or/and because there wasn’t enough initial funding to cover the overheads to match the grand vision.

    A vision to do good in the world is one thing, a noble thing, but non-profits simply won’t make an impact and will be washed out if they can’t garner enough leverage to build their vision into an investable and adaptable solution that is treated as a business.