Intruption in the nonprofit industry.

Like everything we know, the social good sector is in the process of enormous nonprofit industry disruption. Because of the big events, yes, including the pandemic and loss of jobs, nonprofits have had to change how they do things. But, it’s not just that. As we know, we said good-bye to the industrial age, and now we’re fully in the knowledge age. Everyone, including folks in their 80s and 90s, seems to know how to get on a video call. And, remote working, or a hybrid of it, has taken root.

Further, younger generations have pushed nonprofits to take a new look at things and make different decisions. For example, if you spend any time checking out social media, you know that sensibilities changed. Often you’ll see snarky comments about wealthy donors (with no experience what-so-ever in the mission) directing what communities should do. If you haven’t noticed, businesses and leading corporations are moving full-steam-ahead on social responsibility. As a result, more for-profit companies seek to become social enterprises and B Corps to make a profit and a difference. Nonprofits now have lots of competition.

Disruption Is Happening, Including in the Nonprofit Industry

It doesn’t take too much to realize that disruption is everywhere. For example, traditional banking is getting a run for its money with fintech. Remember those days when you had to visit your bank? Well, they’re ending. Banking, one of the oldest industries, is in the process of lots of disruption. But so is the nonprofit sector, and it’s about time. My good friend, Dan Pallotta’s, always speaking about what needs to change in the industry.

The reality is that we couldn’t continue with an industry where donors threw money at problems, and things didn’t ever seem to change. Even the future of fundraising and how it’s happening is different. As my team discussed in a webinar with another friend and thought leader, Paul D’Alessandro, CEO, High Impact Nonprofit Advisors, nonprofit disruption is now part of the equation. It’s everywhere you look—from artificial intelligence to impact investing and even blockchain for making donations.

Moreover, it’s an open secret that nonprofit boards don’t function well. How could we expect groups to make a social impact when you have people serving who have zero experience in the mission? Further, why should people and professionals listen to boards who don’t come from the communities—especially when they want to dictate terms and view things only through their filters>

I’ll share with you that I’ve always been about a hand-up and not a hand-out in my global social enterprises. In other words, provide support in the background and opportunity, but give communities a chance to figure it for themselves. I can’t see our team heading into communities in developing nations and tell people how things should work.

What You Need to Do to Lead Change

Yes, the nonprofit industry is going through massive change and evolution. And I don’t think that the sector will exist in five years as it does today. I think, for the better, it’s getting pushed to operate as what they are—businesses. A 501(c)(3) is a tax status, not a business model. Nonprofit leaders have to treat their organizations as businesses. Once that happens, we’ll see more change and scale akin to what’s happened with innovative organizations such as Charity: Water. That said, what could you do as a nonprofit leader to position yourself better?

1. Do Your Research on What Your Community Wants

First, if your nonprofit’s people-oriented, instead of working with the environment or animals, convene a meeting. Find out from your communities—not your wealthy donors—what they think and what they need. Moreover, make sure you lean on experts and try to remember that while money’s great, it doesn’t equate with experience. Just because you have money doesn’t mean you know how to impact a particular mission.

2. Reconsider the Structure of Your Nonprofit Board

As we know, everything begins with leadership, and that’s true for every organization in the nonprofit industry. In short, you need to see what the trends are and the discussions in the sector about the role and composition of nonprofit boards. Again, we all know many nonprofit boards don’t work. Take a look at your board and be bold and visionary. If you have a problem, fix it. You owe it to your mission and the people you serve to optimize your organization in every way possible.

3. Learn to Operate With Uncertainty and Lead with Disruption

Finally, think about becoming a leader and disrupting everything in your nonprofit to make it matter and make a substantial social impact. Get used to unpredictability and uncertainty. Once you know that’s going to be your everyday path, get used to it. The more uncertainty you face, the more comfortable you become with it. Then, ask your team and supporters to help you lead with disruptive change. Meaning, stop with the business as usual. It’s not working. People want energy, and they want change, so go with it.

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