“Making Money” at a non-profit

Last week I suggested you should answer “how do you make money?” at your company. It’s the easiest way to connect your data to value.

A thoughtful reader wrote in about non-profits:

The challenge with the non-profit space is how to align that reality with the "we don't do this for the money" thinking. Mission and vision always come before fiscal feasibility, and then the development teams are told to just raise more funds. So how does this impact the data teams? I think it flattens the value of the organization's data assets and each department clambers to be at the top of the analytics list. Data teams get vague responses from executives on what's a priority and they're told everything is or will be critically important for the mission.

In for-profit companies, connecting value to money is easy. Money is the primary way companies maximize shareholder value - which is the purpose of a for-profit company.

Rather than “maximizing shareholder value”, in non-profits it could be:

Shareholders = the people behind the public good identified (students in education, communities needing disaster relief, hungry children in need, etc.)

Value = how you measure the good you provide to your shareholders.

“Maximizing shareholder value” becomes “Effectively serving a group of people”. All non-profit mission statements essentially boil down to that. Of course, the leadership likely comes up with a more eloquent way of stating their mission and vision than that.

The business teams and data teams then work together to define how to execute and measure progress toward that mission.

Which isn’t that much different than asking…

“How do you make money?”

I’m here,

Sawyer