Nonprofits vs For-profits

Nonprofit organizations are often operated as a profit earning business with a few modifications. Sufficient information exists that each industry can learn from each other. An early shift in nonprofits was the thinking that not much can be asked of volunteers because they are not paid to treating volunteers as unpaid professionals with responsibilities and accountabilities to the organization (Drucker, 1989). This recent move to become more businesslike holds many risky factors for nonprofits. Nonprofits in some sectors are competing with for-profit companies. Nonprofit organizations have relied on donations and grants to exist and provide their social service. Today, nonprofit organizations are more self-subsistent; relying more on self-made income such as charging market price for services or alternate businesses that generate funds for the nonprofit entity (Dees, 1998).

Nonprofit organizations have learned proper business recording and reporting such as annual reports, balance sheets, and cash flow statements. For-profit businesses can learn from nonprofits in regards to attracting and mobilizing volunteers, which in the for-profit’s case would be the paid staff (Johnston, 2002).

Drucker, P. F. (1989 July/August). What businesses can learn from nonprofits. Harvard Business Review. 67(4), 88-93.

Johnston, R. (2002). On leading change: A leader to leader guide. Wiley, John & Sons, Inc.: Indianapolis, Indiana.

Dees, J. G. (1998 January/February). Enterprising nonprofits. Harvard Business Review. 76(1), 54-65.

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René Cintrón has over 10 years experience in management and leadership in for-profit and non-profit arenas including annual budgets and accounting, inventory control, marketing, office administration, community development, volunteer coordination, resource development and management, grant writing, and strategic planning. Mr. Cintrón is an Accounting & Business Administration Online Faculty member with Rasmussen College, and is pursuing the Doctor of Philosophy degree in Organization and Management with emphasis in Leadership from Capella University.

For more articles visit renecintron.com

Overcoming organizational change: the founder’s syndrome

Founder’s syndrome occurs when the organization, instead of working toward its overall mission, mainly operates according to the personality of a prominent person, usually a founder or initial member, in the organization. The founders of nonprofit charitable organizations are social entrepreneurs. These entrepreneurs have a clear vision of the mission and goals to solve a particular social issue. These issues have to be solved delicately; it is not an overnight venture. Founders merit special recognition because of the accomplishment of converting a vision into a reality. A leader is a visionary who has the end goal in mind and can see the big picture. The visionary ideals were turned to a real organization to benefit the community and/or social issue. Founders have made a substantial personal and emotional investment into the organization, and start it with a specific end solution in mind. The organization will have a mission and a purpose. However, this mission and purpose is that of the founder not the organization.

Nonprofits evolve through time and growth following the typical product (service) life cycle. A majority of founders are not too easily adjustable to this progress resulting in the management of the organization to follow the founder’s personality instead of a method that would continue to provide services to the customers. The founder, in turn, does not build or does not fully utilize a healthy board of directors because of the diverse points of view and visions for the organization. Some noticeable problems during this transitional stage include high turnover rate of board members and staff, continuous major struggles, and a lack of direction. The organization is still operated with same day by day surviving mentality that utilized at the start of the venture. This attitude must change.

A variety of actions need to be taken by both the founder and board members in order to successfully transcend into the new organizational mode. The end vision is not changing simply the method by which the organization reaches it. A clear strategy should be put into place. The organization should develop business strategic plan for the immediate three to five years similarly to for-profit organizations. Founders and board members must be good stewards of company resources to include volunteers and capital by creating budgets, fundraising strategies, and human resources organization. Do not simply use available volunteers; rather have meaningful activities that directly relate to the mission. A motivating environment should be in place for all including staff and volunteers. Each person in a leadership role must accept their new role and responsibilities during the change period.

Organizational change is a given. Identifying issues and knowing when to address them and adapt is part of the leadership role of the organization. These changes call for leaders to assess and advance in improving performance and individual development within the organizational environment. These transitions come from the challenging situations leaders confront. It requires the development of new concept and ideas, and demands that leaders learn and adapt.


Block, S.R., Rosenberg, S. (2002 Summer). Toward an understanding of founder's syndrome: An assessment of power and privilege among founders of nonprofit organizations. Nonprofit Management and Leadership. Vol. 12, Iss. 4; p. 353

McNamara, C. (1998 November / December). Founder's syndrome: How founders and their organizations recover. Nonprofit World. Vol. 16, Iss. 6; p. 38

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René Cintrón has over 10 years experience in management and leadership in for-profit and non-profit arenas including annual budgets and accounting, inventory control, marketing, office administration, community development, volunteer coordination, resource development and management, grant writing, and strategic planning. Mr. Cintrón is an Accounting & Business Administration Online Faculty member with Rasmussen College, and is pursuing the Doctor of Philosophy degree in Organization and Management with emphasis in Leadership from Capella University.

For more articles visit renecintron.com