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by Judith Nichols, New Directions in Philanthropy
Reprinted Courtesy of Modern Donor
 About Judith Nichols: Judith Nichols is a development practitioner, author and consultant with a variety of not-for-profit clients across the USA, Canada, Australia, South America, the United Kingdom, and Europe. A highly respected researcher, trainer and presenter, she specializes in helping organizations understand the implications of our changing demographics and psychographics on fund raising, marketing, and membership. Dr. Nichols has been a featured speaker and trainer at numerous conferences, workshops, and symposia.
Her latest book is Pinpointing Affluence in the 21st Century. She is the author of Transforming Fundraising, Lessons from Abroad: Fresh Ideas from Fund-Raising Experts in the United Kingdom, Global Demographics: Fund Raising for a New World and Growing from Good to Great: Positioning Your Fund Raising Efforts for BIG Gains as well as four other books. Her books are part of the Association of Fundraising Professional’s Heritage Collection. She is also the editor of Modern Donor, an e-newsletter with over 12,000 subscribers.
Addressing Change Proactively - Making every non-profit a "small giant"
The assets of the philanthropic sector would make the "non-profit economy" the seventh largest in the world – larger than the economies of Brazil, Russia, Canada, Mexico, and South Korea. (The World Factbook - PDF)
The world's non-profit sector engages nearly 40 million people and has annual expenditures of $1.3 trillion, larger than the gross domestic product of all but the six largest countries, notes a report from The Johns Hopkins University’s Center for Civil Society Studies. These findings are based on a study of the non-profit, or civil society, sector: the Comparative Non-profit Sector Project (CNP) conducted by 150 researchers in 35 countries around the world.
Among the findings:
The non-profit sector represents 5% of the gross domestic product (GDP) of the countries studied.
If this sector in the 35 countries studied were a nation, it would rank as the seventh largest economy in the world, ahead of Italy, Brazil, Russia, Spain and Canada.
The non-profit sector in these countries employs the equivalent of 39.5 million full-time workers, making it a major employer--with 10 times the employment of the utilities and textile industries.
The number of people employed in this sector amounts to 46% of the public. (This includes 21.8 million paid staff and 12.6 million full-time-equivalent volunteers.)
All told, more than 190 million people serve as volunteers in the non-profit sector in the countries studied.
The non-profit workforce - both paid and volunteer - is proportionately larger in developed countries than in developing ones. Significant civil society sectors are present, however, in many developing countries as well, especially those in Africa.
The scale of civil society in developing countries remains constrained by limited financial support. Only 22% of non-profit sector revenue comes from government in these countries, which contrasts sharply with the developed countries.
The United States does not have the largest non-profit sector; in fact, non-profit organizations in at least three of the countries studied engage proportionally more non-profit workers than do U.S. non-profits. Alliance magazine’s June 2006 issue, reporting on the UN Handbook program (www.jhu.edu/ccss/unhandbook), notes that:
Canada’s NPOs, including volunteers, account for nearly 8% of the country’s GDP.
Excluding volunteers, French NPOs account for nearly 3% of the country’s GDP.
The gross value added of the NPI (non-profit institutions) sector in Australia exceeds that of utilities; accommodations and restaurants; and communications combined.
In some ways, being larger adds necessary "muscle," providing the sector with increased bargaining power. The non-profit sector is a giant intermediary layer between private individuals and the government. It is where conflicts are worked out, or, better still, prevented from occurring.
But, on the negative side, this intermediary position is one of the reasons why non-profits are widely held to be slow to change, difficult to manage, and beset with ambiguities.
The instinct to preserve, the need to be trusted, and the imperative to react to social dysfunction all combine to discourage the relatively abrupt changes such as bankruptcies, buyouts, and mergers that often characterize the for-profit sector. (Nonprofit Strategic Positioning, Thomas A. McLaughlin, Wiley 2006)
Yet, change we must. The handwriting is on the wall:
(Who Moved my Cheese? Spencer Johnson, Putnam 1998)
- Change happens: they keep moving the cheese.
- Anticipate change: Get ready for the cheese to move.
- Monitor change: Smell the cheese often so you know when it is getting old.
- Adapt to change quickly: The quicker you let go of old cheese, the sooner you can enjoy new cheese.
- Change: Move with the cheese.
- Enjoy change! Savor the adventure and the taste of new cheese!
- Be ready to change quickly--again and again: They keep moving the cheese.
For change to be more than superficial and temporary, it must be systemic or holistic. Social change is no more the sum of its parts than a person is the sum of theirs. It has to involve all aspects of an organization working together. (Thomas A Steward, Editor, Harvard Business Review April 2006)
Common wisdom suggests that organizations must constantly grow or die. Yet, there are companies in the for-profit community which have chosen a different path.
Such organizations are businesses with non-financial priorities in addition to their financial objectives. Not that they don’t want to earn a good return on their investment, but it’s not their only goal, or even necessarily their paramount goal. They’re also interested in being great at what they do, creating a great place to work, providing great service to customers, having great relationships with their suppliers, making great contributions to the communities they live and work in, and finding great ways to lead their lives.
They have chosen to be "small giants" according to Bo Burlingham, author of Small Giants: Companies That Choose to Be Great Instead of Big, Portfolio 2005.
Not-for-profits can be small giants, too. But, being a small giant requires great leadership.
Leadership typically involves motivation (rather than coercion) of an individual or group to accomplish a group goal. Transformational leadership describes a potent form of leadership that results in empowering group members to transform organizations and societies.
Transformational leaders characteristically nurture personal and group improvement, share inspiring visions of the future, and foster commitment and motivation towards important goals. (Civic Engagement and the Baby Boomer Generation, Laura B. Wilson and Sharon P. Simson, Editors, The Haworth Press 2006)
Great leaders encourage change.
According to Kenneth I. Chenault, chairman and CEO of American Express, adaptability is one of the keys to organizational success in the rapidly changing terrain of the global marketplace.
Applying Darwinian theory to the business domain, he told a Wharton School of Business audience that "it's not the strongest or the most intelligent who survive, but those most adaptive to change. Over the past 10 years, the need for, and focus on, adaptability has accelerated." (http://knowledge.wharton.upenn.edu/article/1179.cfm)
Not only are non-profits competing for dollars, but these organizations are also forced to adapt to drastically changing funding patterns.
Corporations, community foundations, private philanthropies, and local, state, and federal governments are changing their funding approaches and expectations. As a result, non-profits are being challenged to realign their fundraising strategies, organizational structures, and program-delivery models. (Leveraging Good Will: Strengthening Nonprofits by Engaging Businesses by Alice Korngold, Jossey-Bass 2006)
Are we growing great leaders and small giants in our sector?
The future depends on it.
For more information please contact:
Judith E. Nichols, Ph.D., CFRE
New Directions in Philanthropy
385 Grand Street #L1402
New York NY 10002 USA
Phone: (503) 349-3212
E-Mail: Judnich@aol.com
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