Growth Not Sustainability:
A For-Profit Entrepreneur’s Perspective on Nonprofit Organizations

Even though I am the founder, chairman and CEO of a for-profit business, I have a very close relationship to the nonprofit sector. My firm, BCT Partners, provides management and information technology consulting services to nonprofit organizations across the country. I have served on the board of directors for several nonprofit organizations, including the National Visionary Leadership Project, the Nonprofit Technology Enterprise Network and the New Jersey Public Policy Research Institute, among others. I have volunteered for numerous nonprofit membership groups such as the National Urban League, National Society of Black Engineers, National Black MBA Association, and my fraternity, Alpha Phi Alpha.

As an entrepreneur I see quite a number of similarities between well-run for-profit businesses and well-run nonprofit organizations. The line between the two is becoming more and more blurred each day. Case in point: There are a growing number of leaders in the private and nonprofit sectors who describe themselves as “social entrepreneurs,” including myself. The mission of a social entrepreneur is to make a profit and make a difference; to create financial value and social value.

In fact, today more than ever, we find social entrepreneurs running both for-profit and nonprofit enterprises.

On the other hand, despite the similarities, the most glaring difference I notice across for-profit and nonprofit organizations is not their organizational mission, but rather their organizational mindset. There are two paradigms that I see as prevalent across both sectors.

The first – a “growth” mindset – is an organizational paradigm that emphasizes continuous growth, continuous development, capacity building and future benefits. The second – a “sustainability” mindset – is an organizational paradigm that is willing to accept occasional growth, occasional development, survival and breaking even.

Clearly, the growth mindset is the more empowering of the two. I would argue that while both mindsets are prevalent in the private and nonprofit sectors, the private sector tends to place more emphasis on the “bottom line” in a way that necessitates a growth mindset. Based on my experience, the nonprofit sector certainly emphasizes growth, but to a lesser extent – sometimes as a means of maintaining programs and services –and in a way that is sometimes willing to accept a sustainability mindset.

As evidence, let’s examine the definitions of those who provide monetary support to each respective sector: 1) “investors” who provide “investment” to for-profit companies, and 2) “funders” who provide “funding” to nonprofit organizations. According to Merriam-Webster.com, an investor is someone who: 1. commits (money) in order to earn a financial return; and 2) makes use of for future benefits or advantages.

Similarly, Merriam-Webster.com defines investment as: 1) the outlay of money usually for income or profit [whereas profit is defined as “a valuable return”].

These definitions clearly speak to growth. By comparison, “funder” is not a word! According to Merriam-Webster.com, the definition of “funding” is 1) to make provision of resources for discharging the interest or principal

These definitions (or lack thereof) clearly speak to sustainability.

Are these definitions indicative of the respective paradigms for each sector? Is it the case that there is a private sector mindset of growth that is focused on “future benefits or advantages,” continuous development and a “valuable return” on investment? Is it the case that there is nonprofit sector mindset of sustainability that is focused on the mere “provision of resources for discharging,” occasional development, and maintaining the status quo?

My answer is no. However, while both mindsets are prevalent among for-profit and nonprofit organizations, experience has shown me that the private sector tends to exert more pressure on business owners to ensure growth. In my work with for-profits and nonprofits, I am far more likely to hear a goal of “growth” for a business and a goal of “sustainability” for a nonprofit.

My message to all leaders, including nonprofit leaders, is that sustainability is not an option for any organization. For a nonprofit organization, that doesn’t necessarily mean growth in fundraising; it could also mean a variety of other activities such as diversifying income, lobbying, developing partnerships, staff training, public relations, team building, succession planning, reorganization, and much, much more.

So how can you determine if your nonprofit organization subscribes to a growth mindset or a sustainability mindset? If your organization can answer yes to the following five questions, then you are well on your way to a growth mindset:

1.Does your organization set aside time for those activities that are important but not urgent?
2.Does your organization embrace technology as an integral tool?
3.Does your organization know the exact amount of time and resources needed to produce certain outcomes?
4.Does your organization evaluate its performance on a continual basis?
5.Does your organization bring a spirit of creativity, resourcefulness, courage, resilience and passion to its work?

The fifth question is perhaps the most important because it speaks to the fact that the characteristics of the growth mindset are the exact same characteristics as the entrepreneur’s mindset. For the nonprofit sector to move beyond sustainability to growth, they need not be run like businesses, but they must be entrepreneurial.

Dr. Randal Pinkett is an entrepreneur, speaker, author and co-founder, chairman and CEO of BCT Partners, a multimillion dollar management, technology and policy consulting firm based in Newark, N.J. He is the author of the forthcoming book, “Black Faces in White Places.”