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.

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