Most of us are tired of hearing that “government should be run like a business”. While it may be trite, those of us from the business world understand the frustration of taxpayers who look at how the money is spent and collected.
Nonprofits, however, are more like businesses than government. Fundraising is Sales and Marketing. Programs are Operations and collecting money, spending and tracking expenses is Finance. These are traditional departments in any business.
Because the bulk of nonprofits are small (according to the Weingart report, about 80% have less than a $250,000 budget), they really mirror a small business. Usually the CEO or Executive Director does a myriad of jobs. In many cases they do the books, write grants and do “other duties as needed”.
What we have observed as former business owners and workers is that a majority of Executive Directors come from the Program side. This means that, while they may have some experience in budgeting, the actual bookkeeping and Accounting functions were done by others. The same is true of Sales and Marketing. So the usual strength of a small to medium-sized nonprofit is in programs, which is good for well-run programs, but the sacrifice is at the running of an organization.
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