How management functions at not-for-profit organisations
The role of management at not-for-profit organisations is entirely different from that at for-profit companies. “In the UK, the world of not-for-profits is very different from – and infinitely more complicated than – that of business,” warns Nick Jenkins, speaking to The Guardian. Jenkins founded the London-based greeting cards website Moonpig and spent a year as chief executive of the London-based educational charity Ark.
A manager at a for-profit company is judged on the basis of return-on-investment and corporate growth – is the manager guiding the workers to achieve these goals?
At a not-for-profit organisation, the goals are based on success in achieving the organisation’s mission – helping people or changing society in a fruitful way. Evaluating this is a lot harder to do than just reading a corporate balance sheet, and professors of management have been cracking their heads about it with mixed success for decades, as one commentator recounts.
Function of management versus the board at not-for-profit organisations
Because goals are different for not-for-profit organisations than at for-profits, management has a somewhat different function, and takes on rather different roles with respect to the board. At least in theory, at a for-profit, the board plans and management executes, the board makes rules and management abides by them, the board determines risks and management controls them.
At a not-for-profit, management is likely to share, or even take over, a large part of what would normally be the work of the board. This is partly the result of limited resources, but also because both board and management must together drive the charity’s mission. Boards at charities can’t indulge in debates about business conditions or how the market is evolving; the board wants to be right with management on whether people are being helped, or whether the good the organisation seeks to effect is being achieved.
Not-for-profit management requires zeal and tact
Perhaps since not-for-profit organisations work in a very different way than for-profits, managing them requires a thoroughly different approach.
“Not-for-profit organisations are messy,” explains expert consultant Joan Garry. “When I started as CEO of a charity, the first thing I learned was that we had less than 500 quid in the bank.”
Garry points out that, given the obstacles, a manager at a not-for-profit must have not only a driving zeal to succeed, but the tact of a diplomat when dealing with workers and volunteers.
Garry adds that, in the not-for-profit sector, every decision feels like it is desperately urgent. Managing with this kind of pressure requires real dedication in order to mobilise scant resources and pull together a group of low-paid workers and volunteers. And when you need to motivate people who aren’t earning a large paycheck, you have to speak softly and remember the names of their spouses and children.
Not every manager can achieve results within these limitations. Successful not-for-profit organisations tend to have one, or, if they are lucky, a few leaders who have what it takes to succeed.
Leadership is critical to not-for-profit management
Leadership is a key component of not-for-profit management, because managers must not only share the vision of the board about achieving goals, but they must also be able to infuse the entire organisation with the need to succeed.
It’s not just a question of motivating workers and volunteers: It’s more like being at the head of an army engaged in an ongoing battle. Managers are needed for leadership everywhere, solving day-to-day problems and formulating strategy to get results. They must be right on the shop floor with the workers, and equally shaping policy in the boardroom. They will also have to represent the organisation to the press and to the public, speaking passionately about the organisation’s mission.
And then there is fundraising, which requires constant and far-seeing leadership. The manager must connect with donors and stakeholders from a variety of backgrounds. Good leaders are also concerned with the future of the organisation and about the morale of the staff.
As Nick Jenkins said at the start, it’s all infinitely more complicated and being a successful manager at a not-for-profit demands skills quite different from those that make for a good executive at a for-profit organisation.
“But as a wise woman once commented, in the not-for-profit world, management is ministry.” Given the challenges, perhaps the comparison is a good one.
BoardEffect supports directors and management at not-for-profit organisations
Both board members and management need the support of a high-quality board portal like BoardEffect.
BoardEffect creates collaborative software that makes collaboration at the board level easy and secure – we serve over 200,000 users worldwide, providing competitive pricing and exceptional value.
It allows not-for-profit boards of directors in sectors from developing nation funding to healthcare to work together wherever they are, and with whatever device they are using – it is user-friendly, so no extensive training is required.
The BoardEffect platform has been developed to be clear, intuitive and elegant. This is particularly important, as the high-profile audience who use BoardEffect usually have other jobs and commitments. Ease of use has become our “true north” – ensuring that our system can be used successfully by those with any level of technology experience and comfort. We back this up with 24/7/365 training and support for all users.
Communication among trustees is safe, and sensitive data stored on the portal is protected by the highest grade of encryption. They can securely access board books and other documents and collaborate with other users electronically. Collaboration can include discussions, surveys, electronic voting and more. The platform has unlimited storage that can be configured for each group to work privately.
BoardEffect ensures the highest level of security through a five-part security programme. We encrypt data in transit through Transport Layer Security (TLS) and at rest (AES-256), and have secure SSAE16 audited SOC1 and SOC2 data centres with fail-overs, mirroring, third-party penetration testing and 99.99% facility uptime. We also have disaster recovery and business continuity plans, specialised compliance modules for healthcare, intrusion detection systems and much more.