Keith Twitchell spent 16 years running his own business before becoming president of the Committee for a Better New Orleans. He has observed, supported and participated in entrepreneurial ventures at the street, neighborhood, nonprofit, micro- and macro-business levels.
While entrepreneurism often conjures images of innovative startups and visionary businesspeople, it is really a mindset that applies much more broadly.
One clear example of this is the nonprofit world. And, while there are obvious distinctions between being for-profit and not-for-profit, the similarities may be greater than the differences.
“In the nonprofit world, you always have to maintain an entrepreneurial mindset,” stated Lisa Chmiola, owner of the consulting firm Fablanthropy. “There are a lot of parallels to what I’m doing right now in running a business. You have to be flexible. You honor your mission, but how you serve the people you serve may change over time.”
A prime example of this was offered by David Schlakman, experienced not-for-profit development professional and current executive director of Early Learning Focus. Schlakman recounted the story of an organization that began by serving children with various learning challenges. As the group’s clientele aged, its services expanded into providing housing and jobs, and ultimately to operating small businesses that employ participants in its programs.
“Entrepreneurism is a huge part of whether a nonprofit will be successful,” observed Jonas Chartok, owner of Chartok Strategies, whose particular focus is social justice and education nonprofits. “An entrepreneur is someone who has an idea and builds a network of people to help bring it about. In the nonprofit setting, those people can be financial supporters or other partners who can help bring it to life.”
Chartok pointed out a key similarity between for-profit and not-for-profit enterprises.
“The person who gets it off the ground may not be the person who can take it to the next level. Just like a business, you need different skills at different organizational stages. Sometimes you have to let it go.”
Chartok cited a growing trend toward mergers and acquisitions in the nonprofit arena.
“Not every idea needs to be acted on independently,” he said. “Make it a natural step to look at partners. This can even be a potential exit strategy.”
Nonprofit consultant Chantalle Pierre also looks at the sector through the entrepreneurial lens.
“Entrepreneurism is a necessity for nonprofits, because entrepreneurism requires innovation, requires folks to be nimble,” she said. “You have to see obstacles as an opportunity to pivot, to be bold and consider other possibilities.”
In this vein, Pierre noted that typical nonprofit fundraising can be a rollercoaster, but an entrepreneurial approach can help smooth out the ups and downs.
“Nonprofits do certain things really well, and should consider fee-for-service partnerships with other organizations. What is it that you do well and can offer as a service? Perhaps you are really good at recruiting and training board members. Use your expertise to leverage a new revenue stream for your organization.”
Obviously there is a major underlying difference between nonprofit and for-profit entities, the focus, as Pierre put it, “on sustainability versus profitability. But you have to be entrepreneurial or you don’t sustain.”
Schlakman prefers the term “not-for-profit” to nonprofit, pointing out that “in a really bad year, IBM can be a nonprofit. The difference is that you are operating structurally not-for-profit. The focus is on the service side, not the revenue side.”
Still, in his view, making the business case is fundamentally the same as making the service case. “You have to have the ability to make people understand what the need is, how you can address the need, and how they can help you address the need.”
Despite the many similarities, and the imperative of thinking like an entrepreneur, a lot of nonprofits don’t really have the mindset or intention of taking this approach. Given the concurrence of the experts on the necessity of this for success — indeed, for survival — nonprofit staff and board leaders would be well-served to adopt entrepreneurial outlooks.
“They should make sure they continue to expand their horizons,” urged Chmiola. “Read about entrepreneurship, make sure you are keeping your eyes on the trends.”
