Are nonprofits less than . . . ??

It happened again! Addressing a large group of nonprofit, foundation, and national organization leaders recently, a business leader was trying to convey generally a positive message about how his company has taken the leap to employ people who need many supports to succeed in a competitive employment environment. However, where he tripped was when he uttered something like, "But then you are not employers here today."

HUH!? He was struggling because he likely would have liked to have said, but none of your organizations are "in business" or are for-profit enterprises. The social sector is often viewed as "less than" for-profit businesses for reasons that are just plain short-sighted.

Having talked on the value of this sector for many years and written on the topic, frankly I'm plum out of steam as there is no way to convince leaders here and around the country about the tremendous value that is returned to society by the nonprofit/social sector. Jim Collins did discover that value and wrote a monograph entitled "Good to Great and the Social Sectors" back in 2005. His premise was: "Why business thinking is not the answer" - a very wise man.

In 1998 the forerunner organization to the Community Research Institute (CRI) at the Johnson Center for Philanthropy at Grand Valley State University researched and published a report on the Economic Impact of the social sector in Kent County. At that time it was determined that the sector represented 7% of the local economy and that the economic impact was more than $1 billion!

A study was also conducted in 2006 and updated in March 2007 by CRI on this very topic and the following was found: The total economic impact of the nonprofit sector in Kent County was measured to be $2.1 billion and that local nonprofits (at that time) employed 33,000 people which may be lower in 2010 given the recession. Also it was noted that the sector supported an additional 14,800 jobs in the for-profit sector. Here's the link to this report as well as reports measuring the economic impact of the social sector for Newaygo, Muskegon and Ottawa Counties.

An important message is found in these reports which states while the economic impact of the sector is important, it is the impact that it is has on the quality of life which attracts and retains businesses in our communities as well as addressing the very serious problems surrounding the human condition.

Not employers!? Hardly! The social or nonprofit sector is critical to our society. The leaders do have strong leadership and financial skills and if they don't, they won't survive! Just like in business.