Nonprofits operate very differently than companies--a point of frustration for many donors.  When for profit companies meet a consumer need, they generate revenue; when charities meet a societal need, they generate more demand for their services...but no money.   Nonprofits are actually two businesses- one that delivers the product or service, and one that generates revenue.  Nonprofits which are successful in one of those undertakings are not necessarily adept in the other.

It has always been difficult for donors to find worthy causes.  Aristotle said, “To give away money is an easy matter and in any man’s power.  But to decide to whom to give it, and how much and when, and for what purpose and how, is neither in every man’s power nor an easy matter.” People who are successful making money often find it difficult to adjust to nonprofit settings.  In a modern example, I read about James Unruh, former chief executive of Unisys, who has decided he will not volunteer at his local church any more. Like many businesspeople, he became frustrated by inefficient church meetings and by leadership he viewed as unproductive and focused on the wrong things.  Sociologist Michael Lindsay identified a triple toll caused by such blue-chip defections: churches lose bright volunteer leaders, churchgoers lose any connection with people of power, and the wealthy believers lose out on spiritual fellowship. 

The charitable world dearly needs for captains of industry find ways to bring their business experience and expertise to bear on charitable matters. Bill Gates compared his experiences at Microsoft and the Gates Foundation: “My job at Microsoft had 3 magical things.  First there was an opportunity for big breakthroughs.  Second, I thought my skills would let me help create a special company that would be part of a whole new industry.  Finally, the work let me engage with people who were smart and knew things I didn’t. (My) work at the (Gates) Foundation… also has the 3 magical elements.  The commonsense of the business world, with its urgency and focus, has strong application in the philanthropic world.”

It is important for people with means to do the hard work to become great givers. The nonprofit world, while very different from the business world, does involve Gates’ “3 magical things.”   As a foundation executive and a philanthropic consultant, I have seen many projects that made big breakthroughs in society.  The philanthropic world is filled with innovative organizations that are designed to be thought leaders in important new fields.  And always, the brilliant entrepreneurs in the nonprofit sector continue to inspire and humble me.