Sherita Herring Executive Office
Nonprofit The Stepchild of Business
W hat is a stepchild? Besides “a child of one’s spouse by a previous union,” there are undesirable connotations. Merriam-Webster states someone or something that does not receive enough care or attention. RandomHouseKernermanDictionary states, any person, project, etc., that is not properly treated, supported, or appreciated. Stories like Cinderella teach that a stepchild is unfavorably treated, while a red-headed stepchild often describes a neglected, victimized, or unwanted person. To clarify my point of nonprofits being the stepchild of business, since 1988, I’ve been amazed how often nonprofits are viewed unfavorably with unreal expectations in comparison to for-profit companies. I find many misinterpretations about this valuable industry, e.g.; nonprofits are not real busi- nesses, and all employees must be volunteers. Probably the highest misconception is “non- profits can’t make a profit” when there are various kinds of nonprofits (501(c)(3) thru 29), but they can make substantial profits. In fact, the National Football League gen- erates over $10 billion annually, and it is a 501(c)(6) nonprofit, as are the NHL and the PGA Tour (NFL franchise teams are not nonprofit). Nonprofit doesn’t mean “no profit.” A Johns Hopkins University study reveals that the nonprofit sector has been supporting the U.S. economy for the past decade, generating over $1.9 trillion annually.With over 10 mil-
of the corporations. For-profits and nonprofits must operate under the corporation laws of their particular state. There’s a vast difference in what’s expected of business plan writers and grant preparers. When a for-profit business hires someone to write their plan, they don’t expect a guaranteed investor or loan from the document; nor do they ask the preparer to write now and get paid later when the revenue is secured. A grant writer is expected to guarantee a grant, and the writer is often asked to be paid from a percentage of the monies received. This doesn’t make sense when both writers offer the same service. A written grant proposal is simply a nonprofit’s business plan. The grant writer should be viewed in the same manner as the business plan preparer, i.e., getting paid for the work provided at the time the service is rendered; not based on secured revenue. My goal is to remove the blinders and enhance the reputation of the “nonprofit stepchild.” She may not go to the ball like Cinderella but the nonprofit industry is at least deserving of a comfortable seat at the business table. Sherita Herring, Founder and President of Kreative Images, has coached nonprofits worldwide. She has received numerous awards for her work in grant procurement, community empowerment, and nonprofit development. Sherita is also a motivational speaker, bestselling author, business strategist, business radio personality, and corporate trainer.
lion workers in 2010, this underperformer is the third largest workforce behind retail and manufacturing.This same study shows during the worst part of the down economy (2007 to 2009), nonprofit jobs increased by an average of 1.9 percent annually while for-profit job loss was 3.7 percent. According to Tactical Philanthropy and others, nonprofits employ scientists, CPAs, nurses, web developers, computer engineers, teachers, lawyers, executives, maintenance workers, photographers, landscapers, and many others. For-profit companies exist primarily to generate profits; owners can keep the revenue or disburse among their employees, shareholders, etc. Nonprofits are formed for particular causes or to provide community services. But profits cannot be solely disbursed to owners, employees, or board members. That doesn’t mean they can’t make profits. It means profits must be reinvested back into the company to further the cause of the organization. But organizations can still pay owners and staff, and cover expenses
32 I Nonprofit Professional Performance Magazine
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