"After decades of discourse about how nonprofits need to be more businesslike, I am driven to discuss the differences structurally and in more detail. The admonition to be more like a business is a preposterous proposition—ill informed and exhibiting a sloppy state of mind that tries to draw us all off track to a space of unaccountability. Don’t fall for it. For goodness’ sake—if you want to act like a business, be a business! The major distinguishing factor of a business is its ability to build the wealth of individual owners rather than build collective well-being and value. Decide which bottom line you are dedicated to, and make it your own"
Like Ruth McCambridge, I have long been a critic of those who claim that nonprofits should be more business-like and operate like business to remodel themselves along business and market lines. It is both an ill informed and dangerous claim.
The claim reflects a naive understanding of non profit organizations and is predicated on a false assumption that non profits need a dose of "business thinking" to be more effective and effective.
Others who express similar views to McCambridge and I, include Michael Edwards and Deborah Allcock Tyler.
In her article Use it or Lose it: Frittering Away Civil Society's Strategic Advantage in the excellent online and print journal Non Profit Quarterly, of which she is the Editor, McCambridge argues that non profits have a strategic advantage that they are often blind to because they don't recognize or use it.
And she argues that blindness to this strategic advantage is leading the nonprofit and civil society sector to lose its opportunity to become more influential, particularly in terms of responding to debates and solutions about important social, economic and political issues.
McCambridge argues that this strategic advantage springs from a number of distinguishing characteristics of non profits that need to be valued much more and worked with in a more conscious and powerful way.
Strategic advantage is not to be found in the lure of competition, business metrics, market orientation, growth for growth's sake and obsession with money and profitability.
Some of the strategic advantages highlighted in Ruth McCambridge's article include:
- the tradition of collective association and collective endeavor for the common good
- the tradition of being close to constituents and to communities and of providing opportunities to maximise and amplify their voice
- the importance of shared values and collective aspirations
- the importance of scale, particularly smallness and nimbleness
- close engagement and shared fit between the interests and aspiration of those who run the organization and those who benefit from its activities
- the focus on mutual benefit and the common good
- the tradition of mobilizing people to work together for shared value and of working non competitively in networks
- the important of trust and credibility in the eyes of constituents and stakeholders, rather than public image and brand
- acting as the vehicle through which constituents and citizens can take action for the common good and mutual benefit
- appealing to common cause and individual aspiration through activity aimed explicitly at common benefit as a way for engaging the energy of stakeholders.
- availing ourselves of our constituents/stakeholders’ unpaid/volunteer labor.