Non-profits Adopt Corporate Tactics

By Susie Steckner

Corporate culture is creeping into Arizona's non-profit world.

Driven by rapid growth, competition for funding and demands for accountability, many organizations are taking hard looks at everything from boards of directors to hiring practices to ethics policies.

"It is a rare non-profit today that can survive only on a well-intentioned idea and a mission statement without a solid business plan put into practice," said Robert Ashcraft, associate professor and director of Arizona State University's Center for Nonprofit Leadership and Management.

Nationwide, non-profit leaders have been moving toward corporate practices for years as a result of fund-raising scandals, a slow economy and competition for donations.

Take Southwest Autism Research Center in Phoenix, for example, which is updating its personnel practices as it prepares to hire up to 20 employees. Agency officials are reviewing their employee handbook and learning about things such as how best to ask for references and what type of offer letters to send.

"I just wanted to make sure we have all of our policies and procedures in place to make us more effective," Executive Director Emily Chappell said.

Arizona's non-profit sector is relatively young, so although its larger non-profit agencies have been taking cues from the corporate world for years, the midsize and small organizations are beginning to mix business with mission.

"As non-profits mature in this state, part of that maturity is an evolving awareness of the need to become more businesslike," said Herb Paine, owner of Paine Consulting Services in Phoenix and an expert in the non-profit sector.

Non-profit organizations are seeking business consultants, either for hire or for pro bono work. They're asking for organizational assessments, reviews of their ethics policies and training for board members on fiduciary and other responsibilities

Necessary for survival

Non-profit leaders say they are making internal changes because it is necessary to grow and survive. Just last week, for instance, a forum for non-profit organizations on how to serve as a board member drew about 150 people, three times the number expected.

"There is a hunger for this information. People are yearning to know how to do it right," said Tim Delaney, the event's keynote speaker and founder of the non-profit Center for Leadership, Ethics & Public Service in Phoenix.

In fact, Delaney has been hired by HomeBase Youth Services in Phoenix to work with its board of directors. The agency's executive director, Patricia Leach, said members want to see how to be more effective.

The agency, which serves homeless and runaway youths, has formed a technology committee for a needs assessment and is working to increase its pool of volunteers to supplement paid staff.

"The non-profits need to be well-managed and well-run and the natural byproduct of that is good programs and services," Leach said.

Growth is also prompting Make A Difference, a Phoenix non-profit agency that links volunteers with service projects, to be proactive and update its business practices, President and Chief Executive Officer Alison Rapping said. For instance, the agency, which now has 5,000 members, has contracted out its accounting and has hired Paine to analyze whether its long-range goals are in tune with community needs.

Reasons for change

Non-profit organizations around the country have been making such shifts in philosophy and operations for years.

The changes have been prompted by several factors:

• Scandals involving national non-profit organizations have tainted the public's trust. Earlier this year, the Better Business Bureau launched a program to give a Wise Giving Seal to national charities that meet the agency's standards. The Maryland Association of Nonprofit Organizations offers a Seal of Excellence to state non-profits that meet 55 performance standards such as frequency of board meetings, meeting topics, what subjects are covered in personnel policies and when audited financial statements should be prepared. Several Valley non-profit leaders are informally exploring the possibilit of Arizona adopting Maryland's program, Leach said.
• Tough economic times and government funding cuts have exacerbated concerns about accountability and vulnerability, Paine said.
• Competition for donations has increased, whether from an individual, corporation or foundation, and a growing pool of non-profit organizations, all on the hunt for money, employees and volunteers.

Project involves experts

One small sign of change is a pilot project between the Volunteer Center of Maricopa County and retired Honeywell executives.

The executives are offering non-profit organizations their expertise in strategic planning, finance, marketing, communications and human resources, said Paul Rauschelbach, one of the project's managers and a retired vice president of technology for Honeywell's aerospace division. Thirty-five organizations applied for the project's four slots.

Rauschelbach and the other executives figured this would be their way to give back to the community, but it has become much more to organizations.

With the retirees' help, A&A Cottages is designing a marketing strategy to promote its work, bring in new state contracts and reach new donors. To do that, it's developing a new brochure and learning the best techniques for approaching potential supporters.

"We don't get into the non-profit world because we want to run a business. . . . We get into the world because of the mission," said A&A Executive Director Christine Stanley, whose Mesa organization operates group homes for troubled youths. "But we have to become businesslike.