Ask the not-for-profit employee

In My Humble Opinion
1

I’ve thought about starting this thread for a long time, since the for-profit world is entirely different from the not-for-profit world. The bottom line means different things in my world, and a lot of people have misconceptions. I’ve tried to correct them here and there when I could. This thread may sink like a stone, but we’ll see.

Ok, to start with. I have almost five years under my belt at a nfp. I am involved in almost everything, so I have a pretty good feel for it. And I don’t think nfps are all that great, so I won’t sugar-coat things.

Please be aware I will try not to answer too-specific questions about the company, if only because of liability laws. And if you ask me some things I may recite from our Sensitive Issues Handbook.

What I am trying to convey here is more a sense of the not-for-profit world than a specific company. So please, if you have questions, ask away!

2

Do they glare at you if you ask for a raise or anything else associated with money? Do they make you feel like anything you desire is taking away from the mission of the company?

3

Great thread, Anaamika :). I’m completing my first year at a NFP (I suspect our job duties are somewhat similar), so I’m curious to see if our experiences and perceptions are anything alike.

I’ll be reading this thread with interest:).

E.

4

Thanks, 'mika. I know I’m interested!!!

How did you get involved with the nfp world? Was it something you wanted to do as a career for whatever reasons (what were they if you had some :slight_smile: ) or something that just came up?

5

Thanks, guys. I’m glad there’s at least some interest. :wink:

Oh yes. I mean, I waste a lot of time on these boards but I get a lot of work done, too. Every minute is supposed to be put towards raising money. :rolleyes: Yeah right. Raises are once per year, 2 to 5 %. A sad, sad increase.
My former boss doesn’t make me feel like this but the higher-ups definitely do. But there is a lot of double-standards. For example, the lower end of employees - the ones who bring in the money, btw - have to share hotel rooms, and management doesn’t. Stupid stuff like that.
However, management is highly pressured to give a certain portion of their money back to the organization.

Hahahahahaha! No way, I was working for a temp agency and landed this position permanently. I will switch jobs before much longer. I have it two ways here - the work is extremely hard at times and low pay, but I work with wonderful people who I get along with every single day. We laugh at work every day, and my former boss was a good one.

Now things are changing, and I have a new boss.

6

I worked for non-profits until I burned out and joined the (by comparison) high-paying, jet-setting world of higher ed administration.

How is your board of directors/trustees? I’ve only worked for small non-profits and it seemed that many trustees saw their main function as being a pain in the staff’s ass.

7

Our board is set up differently at my place…the board is not the boss. Instead, the company is run by a national office, and the board are merely volunteers.

Which is a pity because while our board is fair to middling, our board CHAIR is phenomenal. She is just amazing…fights for us and does everything she can for us.

8

I’ve always worked for publicly-traded corporations, where everyone understands that the goal is to increase share-holder value. There may be endless arguments (and childish politics) over whether a particular action is likely to achieve that goal, but nobody doubts the goal itself.

At a non-profit, do you argue over goals themselves–for example, whether one aspect of your mission is more important than another, or whether the mission should be changed?

This puzzled me. Do you mean just in your job? Do you work as a fund-raiser? Because, I mean, they organization must have something that it does with the money, rather than just raise it.

9

Those kinds of fights are handled high up, and definitely not at my level. :slight_smile: But I know that there are discussions on which grant foundation to sponsor for example. We do almost no direct-to-consumer services; instead, we fund researchers and grantees.

No, I am the administrative assistant…but yes, we are supposed to look back at each day and see how much we brought in every day. But that counts if I do the deposits. What they are trying to say is - don’t chase things that aren’t lucrative. Don’t get all excited about a small community event that will only bring a couple thousand dollars, for example…

10

Did they used to call your work a “Non-Profit” organization?

I think George Carlin was right when he said, “Non-profit changed to not-for-profit because ‘non-profit’ sounds like it was accidental.”

11

It’s my understanding (and correct me if I’m wrong, but my mother works for a not-for-profit organization and this is how she explained it to me) that non-profit organizations don’t have shareholders and such and don’t try to make a profit, so to speak - that all money that comes into the company leaves it again, for charities or similar purposes. Not-for-profit organizations are not started to make a profit, but might still make a profit, which generally goes back into the company, depending on the type of company; my mom works for a credit union, different from a bank because it’s not-for-profit, and any profits made after costs go back to the members, people who have accounts with them, in the form of dividends.

So, what I’m saying, is that I’m pretty sure that non-profit and not-for-profit aren’t the same thing. Once again, please feel free to correct me if I’m wrong, this is what I got from my mom and my dad when they were filling out something for my dad’s non-profit Alano Club.

~Tasha

12

tashabot is correct. Our company is a not-for-profit, our goal and intention is not to make a profit, but to make the bottom line each time. However, it’s better to make the profit. A small share of it goes to National, which then pays our (admittedly meager) salaries and benefits. The rest of it turns around the following year in the form of grants. Therefore our website and e-mail address is a dot com, rather than a dot org.

13

I’m pretty sure non-profit and not-for-profit mean the same thing. Mahaloth alludes to the nomenclature change that happened in the past decade or so. NFP is a clarification that there may be a profit but that’s not the goal of the org.

That was my question about the thread title; non-/non-for-profit could be anywhere from credit unions to education to foundations to the United Way to grassroots community service orgs. I assumed the OP meant the last, but apparently not!

14

Another NFP veteran here, having worked for three different NFPs in the past seven years (two of them were less than a year each). I have the wifflebat theory of NFP management, which says that staff ought to be issued wifflebats to use at will on the board of directors. Our NFP’s board is pretty great these days, but in the past, boy howdy–and I’ve heard real horror stories.

Daniel

15

I work for a NFP school and have studied this topic in depth. The one thing I try to get everyone to realize is that NFP’s are still a business and they are still trying to make a profit. As my favorite Prof said:

“ALL companies are run for-profit, it is what you do with the profits that makes a difference.”

A NFP is a choice for people running businesses. In that decision making process they are looking at the bottom line. If it can be helped by going NFP, then management will do so (taxes, etc).

Just because a business is NFP does NOT mean it is morally, ethically or ??? superior. There is no guiding organization that stamps a NFP as being somehow socially superior. You fill out paperwork, meet certain conditions, and ding! you’re a (an?) NFP.

At the end of the day how managment chooses to spend the profits makes the differences between what most consider to be morally, ethically or ??? superior.

Backing up a bit: A for-profit organization must declare profits and distribute them to the shareholders in a fair way (mostly). It can reinvest the profits into the ompany because management sees that as the best way to spend the profits. Such is the case with Miscrosoft - AFAIK, they have never spent money on dividends to investors, they keep it all and make the business better.

Now, a NFP can choose to allocate its profits within the company or to some other charitable cause. BUT, and this is VERY important for you to know, management can also say, legally, that the profits of the company must be reinvested into the company - even if that means BMWs for all of the managment. Or penthouse suites at the Radisson for its managment when travelling (as per Anaamika observation.)

Thus, do not just lump a company into the “morally sound” category because it is an NFP. Bonuses for employees/managment? Yep, can do. Corporate training sessions in the Bahamas with Golf paid for? Yep, can do. Purchasing lunch every Tuesday for suppliers? Yep, can do. Donating profits in the form of grants? Yep, CAN do, but not REQUIRED to. As long as an NFP is sticking to its articles of incorporation (what they say they will do, like “To help the elderly.”) then it is acting legally. Even if said elderly are transported to the local Bingo parlor in a Mercedes van.

A NFP is a business model just like a LLC, S-Corp, J-Corp, single entity employer or ??? It just has a few more hoops to jump through, depending on the juridiction. I think in the USA a company must be in existence for a year before it can apply to be an NFP. Here in the Czech Republic, it can be started in a few weeks with 3 Board members and a registered charter.

-Tcat

16

Oh man, that’d be great. I spent ~4 years working at a not-for-profit business association. In addition to a board of directors we had a fairly large membership base that liked to tell us how we should be spending our time and effort, and at least two other major committes composed of various muckety-mucks from our membership base. Right before I left they were adding ever more committees and task forces to harass the already underpaid and overworked staff. I think I answered to no less than six separate people at one point, each with requirements for me that would have constituted a full-time job.

17

Also a non-profit employee here.

I’m at a company that has over 400 employees, and at least at my level (and at my boss’s level as well) things seem to operate much as they would in a non-non-profit. :slight_smile:

Remember that in any successful organization, more money will come in than goes out. In a non-profit that money does not go to stockholders, but remains in the company.

18

As a former NFP employee I’ll agree with you to a point.

What’s the point of setting up a NFP other than To Do GoodTM?

There’s no point in investing in it, because no one can profit from their investment.

There’s no point in being an owner, because you can’t sell it or liquidate its assets, and put the proceeds in your pocket.

And if your NFP is in any way dependent on grants, donations or contributions, your funders are going to ask why their funding is sending your staff to training sessions in the Bahamas.

So pretty much the only thing left is To Do GoodTM.

Granted, there are exceptions. The Green Bay Packers football franchise is a not-for-profit, specifically so no one can buy the team and move it out of Green Bay. But even in that case, I suspect the people of Green Bay consider that a Good Thing.

19

Taxes, favorable deals (I get reduced rates at event spaces, speakers will generally charge less, etc), location (some places only rent to NFPs), etc.

Management chooses what to do with the profits in an NFP based along the guidelines they set. If they choose to pay themselves $250k a year, they can, and they can argue that they are worth it yada yada yada…

Religious organizations are NFPs. Whether they are $cientologists, Methodist, Muslim, Satanist, Moonies, Hare Krishnas, Cult-of-Bob, or Evangelists they can be NFPs. Now, how many times in the past have we seen these organizations do less than good? Remember that Swami in Oregon that had a different Mercedes for every day of the year? He eventually got caught for tax fraud, but would he have gotten caught if, say, he only had a different Mercedes for every month? Did he need to have an end-game to reap the rewards, or was he doing just fine living for the moment? Oral Roberts lives a great lifestyle. I would think his God would like him better if instead of living in mansions and driving fancy cars he helped feed the poor, but, there you go.

Again, an NFP is a tool. Doesn’t matter what the limitations are, you can get around them. Can’t liquidate and put the proceeds in your pocket? So what? Build it up, take huge salaries and benefits (medical, dental and life insurance policies for everyone!), then drive the thing into bankruptcy (“I felt the image of $1,000,000 a year office space would help attract donations, yer Honor. I guess I was wrong. Oops.”) and move on when you need to.

I’m just saying that people need to wrap their minds around the fact that just because something is labelled NFP, it does not automatically mean it Does Good. It CAN and MIGHT Do Good, but it doesn’t have to.

How about this angle: You and I want to make better-than-average money. We come up with a plan to help the elderly out. If we do it for profit, our salaries would be pretty low. We’d have to count beans, our insurance policies would have higher premiums, yada yada yada. Then we learn about NFP setups and find out the the EU Government will subsidize our offices (as long as they are outside of Prague and located in an economically depressed area - true, btw) and that we can increase our salaries significantly (maybe not +50%, but +20% can be argued), give our families full insurance coverage, and even drive company cars, charge most of our supplies on tax-free credit cards, etc. OK, we are helping the elderly out; we Do Good. But we are also helping ourselves, and our families in the process, more so than if we ran a for profit company. Liquidate Assets? Why? Position ourselves for a corporate buyout? Why? Take our LLC public? Why? This is a 10 person business that helps out the elderly…it ain’t an IT start-up. Time-value of money! I am getting more money NOW, my personal expenses are less NOW (company car), and my future expenses can also be less (schools charge NFP employees less to educate children). OK, we’ve Done Good. Yea. But there was nothing altruistic or morally superior about our decision. In fact, it was solely greed that drove us to do it and the NFP was the tool we chose.

-Tcat

20

Something else I want to say, too. About corruption.

See, lots of people are justifiably afraid of their money not going to where they had intended. With a little research, it’s not difficult to find out if it’s going to the wrong place…regularly.

You see, embezzlement does happen. And then we are stuck between a rock and a hard place. We can either:

  1. Go public with the information. Let everyone know who stole, and what, and the steps we are taking to counter this. Like, making them pay it back.
    OR:
  2. Hide it, and move on. Make them pay it back, under extreme secrecy, so not even the employees fully know what’s going on.

Generally not-for-profits opt for the second choice. Why? Because no matter what, they feel, it’s bad publicity. So when it comes out, it looks even worse that they hid it.

I generally don’t agree with this approach, but the public is completely non-understanding when it comes to this sort of stuff, and generally screams for blood. But the thing is, with small staff and heavy turnover, things can be stolen even under the noses of supervisors.

Then you say, hire more staff and pay them more. Yeah, except we can’t pay them more, because then the public looks at us and says “Wow, they spend all their money on paying their employees and not on the cause. I’m going to go to [this other charity].”

But if you’re paying less, you don’t always get or keep the best employees. So it’s a no-win situation.