Nonprofits are often run quite differently compared to the way corporations are run. Some of these disparities are good and make sense given the differences between the two types of organizations. However, there are some important lessons nonprofits can and should learn from corporations that could be beneficial. 

Here are three key areas where nonprofits can learn from corporations:

Invest in Talent

You can’t save the world without a team to help you! 

Investing in talent is a no brainer for most corporations, but this often isn’t the case at nonprofits. Nonprofits are often too focused on the short term and concerned about saving money. They fail to make longer term investments, especially in personnel. 

Most leaders in the business world would agree that investing in your people is one of the best investments any organization can make. 

You want to be able to attract the best talent and work hard to keep those employees. This means having a good culture, and competitive benefits and salaries. Without this, you simply won’t acquire or retain the top people. You always want your team to feel valued and appreciated. This will motivate them to bring their best every day. 

In his 2013 TED talk, “The way we think about charities is dead wrong,” Dan Pallotta talks about how society unfairly has 2 rulebooks: one for nonprofits and one for all other businesses. 

“So in the for-profit sector, the more value you produce, the more money you can make. But we don’t like nonprofits to use money to incentivize people to produce more in social service. We have a visceral reaction to the idea that anyone would make very much money helping other people.”

This double standard means “talented people have to choose between doing well for themselves and their family or doing good for the world.” Pallotta argues you should be able to do both, and that acquiring top talent is what will help nonprofits grow and accomplish their goals.

Adapt Quickly

Adaptability is key to any successful organization these days.

Businesses of all sizes utilize real time data to monitor their organizations and to make adjustments along the way. They have a continuous feedback loop that allows them to constantly learn and to build upon their learnings. If something is not working, companies are able to pivot very quickly.

As Melinda Gates noted in her TED talk, “What nonprofits can learn from Coca-cola,” nonprofits make the mistake of not evaluating or measuring until the end of the project. 

“In development, evaluation comes at the very end of the project. I’ve sat in a lot of those meetings, and by then, it is way too late to use the data.”

Nonprofits need to learn to collect, monitor and evaluate real-time data so they can make real-time adjustments along the way. This can help minimize losses and improve performance.

Take Risks

Businesses understand the value of taking calculable risks. They understand that a willingness to take risks and think outside the box is often what leads to the biggest successes. And that this type of innovation is really the only path towards growth. 

Businesses aren’t afraid of failure. They know they can learn from their mistakes and build upon those learnings to do better in the future. 

Nonprofits, on the other hand, are largely risk-averse. This is partially due to the focus on keeping costs low. It is also due to the unfair magnifying glass nonprofits are viewed through thanks to various watchdog groups. Many feel that one big mistake could end their organization and are terrified by the thought of failure. 

This is counter-productive. Being risk-averse is limiting. It prevents thinking big and setting ambitious goals. The way to grow and accomplish your goals is by encouraging innovation and taking risks in the pursuit of new ideas. Nonprofits need to understand that taking risks is key to their survival.

While non-profits are different from for-profit companies, they can still learn valuable lessons from the corporate side of the economy. When non-profits follow businesses’ lead and invest in talent, learn to adapt quickly and proudly take risks, they will grow and be able to solve large societal problems and make the world a better place.