It’s a jungle out there. The Australian Not-for-Profit sector is crowded, with over 600,000 NFPs in operation.
That’s 1 for every 38 Australians. We have more NFPs than we do emus.
Many consider the sector to be at the point of over-saturation, the not-for-profit model broken with too much overhead, too much bureaucracy, lack of focus and not-for-profits hanging around after the job is done – existing for the sake of it.
So what needs to happen to transform the sector into an efficient, high performing ecosystem? Often, during our consulting, we’ll bring across learnings from the private sector (and vice versa). Today, let’s take an expedition into the Amazon. A company that has persisted, reacted to the changing market and gained such expertise they’ve been able to predict what their customers will want. With the sharp vision hindsight provides, it’s clear they wouldn’t be anything of what they are today had they continued just selling hardcopies of books.
While they are very much a for-profit company they act as a not-for-profit in the sense that they put almost every cent back into the company for sustained growth since starting in 1994.
From Q1 in 2009 to Q3 in 2013 Amazon has consistently pumped money back into the cause, keeping profits near or below $0 while revenue rises.
So how have they achieved this?
Founder Jeff Bezos: “We are stubborn on vision. We are flexible on details.“ Amazon can see the forest from the trees. Keeping clear the ultimate destination but allowing the path there to take as many bends as necessary.
They have avoided descending into the Heart of Darkness through strong branding and stronger retention. Amazon’s customer service has been voted the best in the world and how this was achieved can be read here. While NFPs don’t have ‘customers’ in the traditional sense, they are accountable to their funders and recipients. The customer relationship is there, just non-transactional, and must be nurtured all the same to stave off the inner Mr Kurtz.
Finally, Amazon aren’t lost in the woods. They’ve set up a tribe, partnering with or acquiring over 45 companies (it’s most recent and biggest investment being Twitch for $970 million) and while NFPs usually don’t have the means to buy out other bodies, developing partnerships with organisations that have complementary goals is a must in an uncertain future.
For Not for Profits to avoid becoming part of the white wash, leaders must guide their organisations to:
1. Find clarity of purpose and be adaptable
2. Articulate branding and nurture stakeholders
3. Establish strategic partnerships
The operative word is sustainability. It’s what every not-for-profit should be striving towards. Read up on 16 Steps for Building a Sustainable NFP Business Model for further advice on a NFP business model that lasts.
Hacking through the dense brambles of the NFP space is a daunting task but a focused vision, a personable approach and a considered team-up will get you into the clearing.