“What’s Next for Non-Profits?” – Christian Sarkar and Philip Kotler

“What’s Next for Non-Profits?” – Christian Sarkar and Philip Kotler

In this article we explore the approaches non-profits are taking now, and then explore opportunities for institutional innovation.

What does the non-profit do now?  

According to a global CAF survey, nonprofits are fighting against the clock to sustain themselves financially. One fourth of the responding organizations expect to close down within the next 12 months if the situation remains unchanged and one fourth are unable to predict their future.

Key Challenges

The impact of COVID has been felt by non-profits in ways that have created an existential crisis for many.  Austerity measures—like cutting salaries and laying off employees due to lack of funding—come at exactly the wrong time. The non-profit industry is being called to step in where government and other solutions are lacking.  In the US, for example, the lack of an integrated public healthcare system is a huge reason for the uneven response to COVID across states and municipalities.  One can argue that the system isn’t just broken, it simply doesn’t even exist.

Here, as per the CAF survey, are some of the critical issues facing non-profits which are suspending their work :

New Approaches to Fundraising

Additionally, the survey found that traditional revenue sources can no longer be relied upon to sustain administrative and operational costs. The majority of respondent organizations—just over 80%—focused on innovating and adapting their fundraising strategies. Here’s how:

  • 49.40% created new digital donation opportunities for donors
  • 36.04% created new products or services
  • 35.32% applied for public support (subsidies)
  • 34.61% focused on new donor segments
  • 27.45% engaged board members in fundraising
  • 19.57% dedicated more internal resources to fundraising
  • 6.21% added board members to enable fundraising

Interestingly, 16.7%  didn’t do anything differently – they chose not to adapt their fundraising strategies.

Rethinking Strategic Partnerships

Finally, the survey gives us some data on the outlook on partnerships:

Strategic partnerships, while often time-consuming and challenging, are regarded as an enabler of effective response. Two thirds of respondents are actively exploring partnership opportunities with other organizations.  This is a positive shift, and we believe it will be one of the key drivers of the future for non-profits.

What’s Next?

Will these changes be enough? The job of the leader now is revisioning – rethinking the narrative for the future.

We believe there are several new approaches non-profits should consider as they plan their futures.  Here are some we think can make a real difference:

  1. Revisit your Mission.  It is time for all institutions to revisit their mission, and to do it in a way that is participative and inclusive. Think beyond the organization, and examine the “unmet needs” of society – locally, nationally, and around the world.  Use the Mission Model Canvas developed by Alex Osterwalder and Steve Blank as the starting point. Also, don’t use AI, at least not until you have rethought your mission. Ask: what are the new jobs-to-be-done?
  2. Organize as an Ecosystem. Most non-profits are structured as top-down hierarchical organizations, with a centralized planning structure that is at best obsolete.  Take a page out of Amazon’s play-book, and allow your employees to self-organize around “two pizza” teams. Allow micro-innovation to flourish at the local level. What can non-profits learn from RenDanHeYi as it is practiced at Haier? Liberate your employees—they are closer to the “customer.” Read the story. Ask: what will happen if we organize ourselves around needs instead of services?
  3. Look for Entrepreneurial Opportunities.  The late Paul Polak used to say: “you can’t donate your way out of poverty.”  What he meant by that was that the donation-model doesn’t scale, it doesn’t solve the problem; at best it alleviates the problem temporarily.  A good example of this, way before COVID—in 1995, was when the Washington DC-based non-profit Solar Electric Light Fund decided to spin off its operations in India and launch a for-profit—SELCO—which has evolved into a network of organizations, each tasked to address gaps in the energy access ecosystem. It’s all about what Ed Morrison calls “strategic doing.” Ask: what services can we spin-off and scale as a for-profit?
  4. Design for Justice. Design justice rethinks the design process, focusing on the people who are normally marginalized, and uses collaborative, creative practices to address the deepest challenges our communities face. As you redesign your products and services, consider adopting the 10 principles of design justice. If your non-profit CEO earns more than 5-10 times the lowest paid employee in that country, then you may have lost your way. Ask: how can we build or embed justice into our operations?
  5. Embrace Brand Activism. As businesses begin to a more active role in making a difference in society, it is also time for non-profits to help guide those businesses as they seek to create an impact.  How can your non-profit and the ecosystem you have developed over the years bring business into the game, as a partner and as an agent of change?  Ask: What opportunities can our non-profit create for cross-brand activism?
  6. Build/Join a Purpose Platform. A purpose platform mobilizes people across society – experts and community members – to create lasting and sustainable solutions to society’s most pressing challenges, i.e. the Common Good. Is your non-profit able to build or shape the platform in your sector? Learn more from Simone Cicero.  Ask: what will it take to bring the players in our sector to build a purpose platform?
  7. Start/Join a Movement.  All social change happens via movements with a purpose to improve the future. As brand activism accelerates, there are more opportunities for non-profits to team and collaborate to 1) support existing movements, or 2) start and lead movements of their own.  Ask: what movements should we participate in to accelerate change and increase our impact?

All these suggestions require a cultural transformation – new mindsets, new behaviors, and new vision.

Now is the best time to begin that journey.  If not now, then when?

Christian Sarkar is the editor of this site, an entrepreneur, consultant, artist, and activist. He is listed on the Thinkers50 Radar for 2021. See also The Wicked7 Project and FixCapitalism.com.

Philip Kotler is the “father of modern marketing.”  He is the S.C. Johnson & Son Distinguished Professor of International Marketing at the Kellogg School of Management at Northwestern University. He was voted the first Leader in Marketing Thought by the American Marketing Association and named The Founder of Modern Marketing Management in the Handbook of Management Thinking. Professor Kotler holds major awards including the American Marketing Association’s (AMA) Distinguished Marketing Educator Award and Distinguished Educator Award from The Academy of Marketing Science. The Sales and Marketing Executives International (SMEI) named him Marketer of the Year and the American Marketing Association described him as “the most influential marketer of all time.” He is in the Thinkers50 Hall of Fame, and is featured as a “guru” in the Economist. Sign up for his newsletter >>

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