While some overall management principles are the same among nonprofit, for-profit and government organizations, several aspects of management are unique to nonprofit firms. A careful study of the nuances of managing in this scenario can lead nonprofit professionals to find more success and fulfillment in their careers.
An online master of public administration program with a concentration in nonprofit management, like the one from Arkansas State University, gives professionals a valuable head start toward a thriving career as a nonprofit manager. This educational foundation prepares aspiring leaders to address the complex challenges they’ll face while managing organizations dedicated to social impact rather than financial gain.
The Organization’s Mission
The success of a nonprofit manager begins with the organization’s mission statement. According to the National Council of Nonprofits, organizations in this sector are uniquely distinguished by their commitment to advancing a specific cause or serving the public good, rather than generating profit for shareholders or owners. This mission-centric approach shapes every aspect of how these organizations operate, from strategic planning to day-to-day operations.
Nonprofit management should focus on casting vision in every project and every scenario in the workplace and it should always point the team back to the overarching cause with a sense of urgency, rather than trying to reach specific financial or sales goals. This mission-driven approach creates a fundamentally different work culture compared to for-profit businesses, where success is often measured primarily by revenue growth and profitability.
Legal and Regulatory Considerations
Nonprofits face a different set of legal requirements than do for-profit businesses or government agencies. Nonprofit managers need to be well-versed in the various legal requirements their organization must meet in order to maintain tax exempt status. These requirements include restrictions on political activities, limits on lobbying and strict guidelines regarding how funds can be used and distributed.
Enrolling in an online MPA program in nonprofit management gives aspiring nonprofit managers a foundation in tax laws as they apply to nonprofits. After graduation, managers must stay abreast of any changes or updates to tax laws that may affect their organization.
Funding and Budgeting
The overall principles of budgeting in a nonprofit organization are similar to how it works in for-profit businesses and government agencies, although the source of funding and allocation of money does vary. Nonprofits cannot keep any profits earned by their organization or accumulate any wealth; they must spend any earnings on operations for their organization.
Nonprofit management also involves the process of researching, writing and applying for grants to provide crucial funding for the organization’s operations. Successful nonprofit managers must develop sophisticated grant-writing skills and cultivate relationships with funders while simultaneously diversifying revenue streams through individual donations, corporate partnerships and earned income strategies to ensure long-term financial sustainability.
Contracting With the Government
In certain fields of service, nonprofit management can involve contracting with government agencies to provide human resources, facilities or other materials to a program. Managers must know the ins and outs of contract negotiation, as well as what it takes to fulfill every aspect of the contract.
Successfully managing government contracts requires nonprofit leaders to balance the organization’s mission with contractual obligations while maintaining the quality of services delivered to beneficiaries. Managers must also navigate complex reimbursement processes, meet stringent documentation requirements and prepare for regular audits and site visits. This specialized skill set combines financial acumen, legal knowledge and program management expertise in ways that are relatively unique to the nonprofit sector.
Personal Connection
For-profit businesses tend to focus on the bottom line. Nonprofits, however, must maintain a focus on the personal connections they have with the people involved in their organizations’ causes. These human connections form the foundation of nonprofit success in ways that transcend traditional business metrics.
Nonprofit managers need a people-centered approach to management, rather than a money- or project-centered approach. For the mission of the nonprofit to stay at the front and center, managers must prioritize relationships with employees, volunteers and the people their organizations serve. This relational approach creates trust, fosters collaboration and ultimately amplifies the organization’s ability to create meaningful social change.
Difficulty Measuring Results
Nonprofits often have difficulty measuring the results of their work, compared to for-profit businesses that can look at their sales and profits to quantify success. A nonprofit can sometimes measure success by the amount of money it raises at a fundraiser, by the number of volunteers that engage its cause, or by the number of people it serves. Sometimes, however, the work of a nonprofit is not about serving a greater number of people but providing a greater quality of service to a relatively small number of people. One life changed is worth all the work of the entire organization.
The unique challenges of nonprofit management provide an exciting opportunity for mission-minded individuals to grow as managers in the nonprofit world. Managers in nonprofit will need many of the same skill sets as they would in the corporate or government sectors, but they will also need to adapt their management skills to fit nonprofit scenarios and be flexible for the differences they will encounter. Through comprehensive coursework and hands-on internship experiences, an online MPA program equips graduate students with the practical knowledge and adaptive skills necessary to navigate these unique management challenges successfully.
Learn more about Arkansas State University’s online Master of Public Administration (MPA) Nonprofit Management program.