Almost 35 of the 45 years of my business career have been spent in and around the nonprofit association community. It has been a fascinating adventure filled with the excitement of many victories and accomplishments, while facing a great variety of challenges, as well as a few small defeats.

During the last 25 of those years, I have tried to maximize my efforts to find ways to expand my income by serving the nonprofit sector as an independent management contractor. I have been somewhat successful in pursing this goal but all the while puzzled by a strange phenomenon that seems to permeate most of our society. Let me illustrate:

1. On a number of project proposals over the years, I offered to provide a service to a group and finance the project because they had no money. Based on the success of the program, they would get a royalty in addition to the P.R., etc. It didn’t always work out that way but that was the risk I was willing to take.

2. In comparing the results of a nonprofit association offering a trade show or a publication, for example, competing with a profit-making entity, I have heard the inefficiencies and ineffectiveness of the “association” excused as “well, they are a nonprofit.”

3. In a business dispute, a retired judge acting as a mediator said, “My sympathies go to the association because you are a profit-making company and they are nonprofit.” I could not figure out what that had to do with the merits of the dispute.

Don’t misunderstand. The wealth of opportunity that abounds has contributed far more to my success than the agony of this frustrating lack of economic understanding.

There are certainly many associations that are both effective and efficient in serving their constituents, but there are many that are neither. Nonprofit status should not create an aura of invincibility that automatically gives it preference in performance over a profit-making entity.

What are our schools and colleges teaching about free enterprise? What do we need to do to provide a basic education in reality economics?

There is nothing magic about being a nonprofit corporation. It is relatively easy to attain nonprofit status. Somewhere, somehow, nonprofit organizations are going to have to meet certain standards of accountability just as is beginning to happen in the education arena. The educational system is in total disarray and not the least of the contributing factors has been the dogged determination of teachers and administrators alike to resist any and all attempts at performance standards and evaluations of both fiscal and results-oriented achievements.

How far behind is the nonprofit sector?

What do you think?

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