Business can learn more from not- for- profits than not- for- profits can learn from business

I have long been a critic of those who argue that not-for-profit and civil society organisations should become "more businesslike" and operate more like business and remodel themselves along business and market lines. It is in my view a ludicrous and dangerous claim.

The claim reflects a naive understanding of not-for-profit  organizations and is predicated on a false assumption that not for profits are run by well intentioned amateurs who need a dose of "business thinking" to be more effective and effective. My view has always been that the reverse is in fact true.

Business and corporations would in fact benefit more from the values, principles and practices of many not-for profit and civil society organizations.

So I was interested in this piece by Debra Allcock Tyler ( Director of the UK Based Directory for Social Change) which appeared in the UK Third Sector News.

Charities are good at what they do, and business should learn from us

By Debra Allcock Taylor

Nick Hurd's recent assertion that charities should learn from businesses is the wrong way round, says our columnist.

I like and respect Nick Hurd, the Minister for Civil Society. I really do. But I find myself in the grip of an overwhelming desire to bash him over the head with a copy of the Charities Act 2006 after his recent remarks in this magazine. He said: "The sector has to open its mind to absorbing skills from the private sector because it clearly needs more business skills."

Have people forgotten the recent financial crises already? Maybe I wasn't paying attention, but I don't think it was expenditure on grants for charity bodies that brought the world's financial markets to its knees, was it? Was the banks' decision to extend credit to a sub-prime market a good business decision, or just greed? Was it good business to have the hedge funds underpinning so much of the financial economy?


It is estimated that, at the height of the financial crisis, about 95 firms in the UK were going bankrupt every day, some 20 per cent more than during the 1990s recession.

With the coalition government opening up the public services to competition and private providers to a much greater extent than any of its predecessors, one can't help but wonder if business models really are the most appropriate mechanism.

This culture of commoditising social needs - characterising our needy citizens as consumers of a public sector product - is, I think, dangerous. Vulnerable people aren't consumers. They're vulnerable people. And we are really skilled at helping them.

So why do people who don't run charities keep telling us how to do it? What precisely are these business skills that we apparently need? The ability to deliver excellent services to vulnerable people on tuppence ha'penny? The ability to convince people to give of their time and money for no other reason than it's the right thing to do?

There are probably some badly run charities, of course, but in my experience they are the exception rather than the rule.

So I have to ask, what is this constant exhortation to ape the private sector really all about? Is this just a euphemism for becoming inappropriately competitive; focusing on revenue rather than cause and becoming bigger, because that's what drives companies?

Forgive the sexism, but it's a bit of a macho paradigm, isn't it? It's the size that counts? Well, I don't think it's about how big you are or how much cash you flash. It's about being good at what you do.
Bulldog Rescue & Rehoming survives on less than £25k a year and does what it says on the tin: a wonderful job with an army of volunteers who simply care about what they do. It doesn't need to become Bulldog and Budgerigar Rescue & Rehoming.

Be open to new ideas and ways of working. But charities - I beg you, ignore those calls to be more like businesses. You're absolutely great at what you do when you remember you're charities. Frankly, I think business has more to learn from you.