Free Management Library Includes Materials for For-Profit and Nonprofit Organizations
Written by Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Copyright 1997-2008.
Sections of This Topic Include:
Goal of Integrating For-Profit AND Nonprofit Information in the LibraryNonprofit and For-Profit Organizations Have Great Deal in Common
Different Names -- Similar Concepts
Features Generally Unique to Nonprofits
Library Indicates Nonprofit and For-Profit at the Top of Each Page
Library Designates Nonprofit_Focused "Additional Information for Nonprofits" in Certain Topics
Additional Information About Comparisons of For-Profit and Nonprofits
Goal of Integrating For-Profit and Nonprofit Information in the Library
To date, there has been a great deal of online management information that, at first glance, appears exclusive to the needs of for-profits. Online management information for nonprofits tends to be focused on activities unique to nonprofits, but not to the many areas of management that are common to both for-profits and nonprofits. Consequently, nonprofit organizations tend to miss out on a great deal of useful online information about management. Hopefully, one of the outcomes from the library will be an increased range of management information available to nonprofit organizations. Another outcome might be increased understanding about both types of organizations, including their strong similarities.For-Profit and Nonprofit Organizations Have Great Deal in Common
Many people have a misconception that nonprofit organizations are very different from for-profit organizations. While the two types of organizations are different in certain aspects (see General Features Often Unique to Nonprofits), the vast majority of management activities are common to both types of organizations.Often, in management practices, the most important difference to focus on is the size of the organization, rather than whether it's a for-profit or nonprofit. Small nonprofits are often much more similar to small for-profits than to large nonprofits. Similarly, large nonprofits are often more similar to large for-profits than small nonprofits.
Different Names for Similar Concepts
Each of these two types of organizations tends to have its own wording for the same (or similar) concepts. The following table depicts this different wording.
For-Profit Term |
Nonprofit Term |
| employees | staff |
| customers | clients |
| investors | funders |
| products | services |
| results | outcomes (see note 2 below) |
| chief executive officer | executive director |
| sales | revenue |
NOTE 1: For-profits often use the term "results" to mean a desired level of profit or certain solutions for customers (internal or external). Nonprofits use the term "outcomes" to mean impacts on clients, that is, enhanced learning, self-reliance, etc.
Features Generally Unique to Nonprofits
Nonprofit organizations differ from for-profit generally in the following areas:1. Nonprofits focus more on fundraising from donors, e.g., grants, contributions, etc. For-profit organizations, on the other hand, focus more on "fundraising" from investors.
2. Nonprofits tend fo focus more on board of directors' activities
For-profit corporations also have boards of directors. However,
their board members are usually more highly trained and experienced
in business, leadership and management than in nonprofits,
where board members are often volunteers who bring strong passion
for the nonprofit mission. However, with the fairly recent
Enron debacle, both for-profits and nonprofits are having to focus more
on developing their boards.
3. Nonprofits focus more on volunteer management
However, volunteers are (or should be) managed much like employees,
e.g., with job descriptions, policies, etc.
4. Nonprofit finances are a little different than for-profit
Nonprofits focus on "human capital" whereas for-profits
focus on monetary capital. Nonprofits have certain unique accounts,
e.g., restricted accounts, or accounts designating funds (usually
grants) that can only be spent on certain activities. However,
both types of organizations carry out very similar basic bookkeeping
activities, generating financial statements (they each use different
names for the statements, which are also quite similar), analyzing
financial statements and reporting financial information. With the recent
focus on for-profits being more accountable to the community and society,
for-profits are focusing more on social impacts than ever before.
5. Nonprofit taxes are different than for-profit
Many nonprofits can be tax-exempt (that is, exempt from paying federal
and certain other kinds of taxes) and tax-deductible (that is,
donations to the nonprofits can be deducted from the donor's gross
income). Accordingly, they are expected to file certain kinds
of tax forms. Certain types of nonprofits also must minimize certain
kinds of activities, such as lobbying or earning over certain
amounts of revenue that are not associated with the nonprofit
mission.
Library Indicates For-Profit and/or Nonprofit at Top of Each Page
Information at the top of each topic in the library will indicate if the topic is intended for either for-profit or nonprofit organizations, but not both.Library Designates Nonprofit-Focused Information With "Additional Information for Nonprofits" in Various Topics
Some topics will include a section dedicated specifically to nonprofit organizations. These sections will be marked with "Additional Information for Nonprofits".Additional Information About Comparisons of For-Profit and Nonprofit
Two Types of Businesses -- For-Profit and NonprofitLegal Forms and Traditional Structures of U.S. Businesses (for-profit and nonprofit)
For the Category of Organizational Development:
Related Library Topics
Recommended Books
Managing Organizational Change
Managing Organizational Change
Field
Guide to Consulting and Organizational Development
- by Carter McNamara, published by Authenticity Consulting, LLC. Provides complete, step-by-step guidelines to identify complex issues in for-profit or government organizations and successfully resolve each of them. This book is also helpful to organizations that are doing fine now, but want to evolve to the next level of performance. This is one of the truly comprehensive, yet practical, books about this complex subject! Includes online forms that can be downloaded. Many materials in this Library's topic about guiding change are adapted from this comprehensive book.
Field
Guide to Consulting and Organizational Development With Nonprofits
- by Carter McNamara, published by Authenticity Consulting, LLC. Provides complete, step-by-step guidelines to identify complex issues in nonprofit organizations and successfully resolve each of them. This book is also helpful to organizations that are doing fine now, but want to evolve to the next level of performance. This is one of the truly comprehensive, yet practical, books about this complex subject! Includes online forms that can be downloaded. Many materials in this Library's topic about guiding change are adapted from this comprehensive book.
The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just hover your cursor over the image of the book. A "bubble" of information will be displayed. You can click on the title of the book in that bubble to get more information, too.
Growing Your Organization
The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just hover your cursor over the image of the book. A "bubble" of information will be displayed. You can click on the title of the book in that bubble to get more information, too.
Also See
Capacity Building (Nonprofit) -- Recommended Books
