What nonprofit organizations can learn from the closure of the Nonprofit Consortium

Letter published in Cape Argus, 24 May 2008.

It is with sadness that I heard that the Nonprofit
Consortium is closing its doors.

This adds to the list of well-known nonprofit
organizations that have been struggling to keep their heads above
water, or who have recently been forced to shut down.

There a sad irony in this – that an organization that
worked so hard to create an environment where nonprofit organizations
can thrive and find the income they need, has itself not been able to
find sufficient funds to enable it to continue to fulfill its own
purpose.

This is not so much because of anything the Nonprofit
Consortium did or did not do. In fact, the Nonprofit Consortium and its
staff have done much valuable work in the last ten years, and I have
regularly consulted with its staff.

The closure of the Nonprofit Consortium has to do with
fundamental flaws in the business model of nonprofit
organizations.

Fortunately, the closure of such a high-profile
organization presents an opportunity for other nonprofit organizations
to reflect on their business model and mindset.

These organizations can learn that they need to become
more proactive, and start selling the outcomes they create in the world
instead of asking for donations. They can learn the importance of
demonstrating that they are good investments and value-for-money. They
can investigate how they can build themselves into the business system
or value chain of businesses. Most importantly, they can discard the
outdated concept of a “nonprofit organization” and get to work on
earning themselves a good income.

While these organizations need to continue to make a
social profit, they also need to start making a financial profit to
manage their risk and expand their impact. They need to start thinking
of themselves as social enterprises.

Marcus Coetzee is a business strategist who helps leaders to think clearly about the future. To find out more about how he can help you, call 0828799131 or visit Marcus Coetzee.co.za.

Cultivating strategic clarity.

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