Thursday, March 8, 2012
How Charismatic Leaders Build Profitable Non-Profit Organizations
Starting a non-profit organization can be as challenging as starting a for-profit business. McNamara (n.d.) posited a few considerations for starting a non-profit organization, which include:
• What is the purpose (mission) for your new organization? It is important to determine the benefits and services you will provide to clients.
• What kind of non-profit organization do you want to start? You can informally begin a non-profit organization by merely getting some friends together or formally start a tax exempt non-profit organization under the IRS classification of 501(C) (3).
• Will you structure the non-profit organization or outsource it to other parties. A great deal of the work can be done by yourself or you may consider hiring an attorney or CPA.
Like any business, non-profit or for-profit, the rudimentary process of starting a company is pretty simple. However, the ability to create a profitable organization is a huge undertaking. The dirty little secret is that although non-profit organizations are not profit-driven, the more effective non-profit organizations, such as United Way and the Susan G. Komen for the Cure, operate essentially like any other company. Whether it is products, services, or programs, money is needed to ensure long-term viability.
Charismatic leaders are experts at creating non-profit organizations. Many religions are the result of a charismatic personality from Christianity to Scientology that focuses on social matters. Although the institution may exist long after the founder has died or moved on, non-profits’ existence rely on the ability to create relevant programs marketed effectively to generate revenue. Charismatic leaders build profitable non-profit organizations by:
1. Developing programs that address human needs. Non-profit organizations that have the greatest capital and resources have done some degree of market analysis. Charismatic leaders are data and research driven. Actually, charismatic leaders are excellent at dissecting and deciphering inefficiencies within the marketplace. The visionary traits attributed to charismatic leaders are often a result of compiling facts, critical thinking, and finding solutions to various problems. The late Steve Jobs of Apple is an excellent example of a charismatic leader’s ability to discover inefficiencies within the marketplace. By looking at the marketplace and the emerging needs of consumers, Apple’s invention of iTunes transformed the music industry into marketing and selling music differently online. Effective non-profit organizations do the same thing. Charismatic leaders create missions and crusades around problems they observe in society. Starting your own non-profit organization should be pursued as if it’s your life’s mission is to solve a compelling problem through your organization’s programs.
2. Hosting large events to honor local and national luminaries. Charismatic leaders are adept at expanding their branded personalities with other individuals who are acclaimed. By bestowing a leadership award to someone such as former President Bill Clinton, not only does Clinton become a supporter of the non-profit organization, the event is almost guaranteed to be sold out in ticket sales. This co-branding of charismatic leaders with other leaders provides non-profit organizations a greater presence, which garners greater membership and opportunities to develop and sell new products.
3. Recruiting board of directors with powerful political or business contacts. Although charismatic leaders may be reluctant to abdicate the decision making power of the organization to a board of directors, he knows that the viability of the organization rests with his ability to attract influential corporate leaders who can donate money and resources to the organization. These tax deductible contributions help organizational revenue as well as create a “feeder system” for future luminaries to be honored. Many boards of directors are aware of its function as a fundraising arm to the organization. It is essential to recruit board members who not only believe in the mission, but can financially and politically further its purpose.
For non-profit organizations to be profitable, the business and marketing of the non-profit organization must precede its programming. Non-profit organizations have to do good and well simultaneously—that is, doing the greatest amount of good while creating the greatest amount of funding sources. To do the reverse, sets the stage for the demise of the organization.
McNamara, C. (n.d.). How to start a non-profit organization: Guidelines and resources for entrepreneurs. Free Management Library. Retrieved from: http://managementhelp.org/startingorganizations/start-nonprofit.htm