It is funny how sometimes the most profound insights can happen in unexpected settings. Such was the case while ushering at Rosh Hashanah services this weekend.
Just before the holiday, I was pondering a scenario that questioned whether nonprofits are mission-driven businesses. A colleague of mine shared the following case study: Suppose that a nonprofit pre-school had exactly one opening and two families vied for that slot. The first was a couple that had no connection whatsoever to the mission of the school but could pay 100 percent of the tuition; the second was a single parent who was strongly connected to the mission, but could only afford 50 percent of the tuition. Who do you take?
Alas, both the words “mission” and “business” are vexing terms here. Yes, one would want to enroll the child from the needy (and connected) family, but my hypothetical school needs to stay solvent, so the businesslike choice is to take the family that can pay.
With these thoughts still floating in my mind, I entered my synagogue early on Saturday for my morning of ushering. Immediately I became immersed in a sea of activity: the clergy was systematically reviewing last minute details; the staff was in high gear to ready the building; and a small army of volunteers was hastily preparing to welcome 1,000+ families. What was clear to me in those harried moments is that my synagogue operates as a highly functional organization – even on the holiest days of the Jewish calendar.
But what happened next was even more amazing: As the service started, the mechanical and coordinated motions seamlessly transitioned into a highly spiritual and uplifting experience. The countless hours of preparation and organization dissipated into the background. Like the foundation of a building, all that hidden work helped support and strengthen these special moments for our community.
As I absorbed this juxtaposition while fulfilling my volunteer duties, two light bulbs came on: First, I realized that my synagogue is a great example of a mission-driven business: it certainly exists to fulfill a higher purpose but it operates no differently than any other major organization. Indeed, even institutions of worship need people who know how to attract members, keep the building running and operate it in a financially solvent manner.
The second light bulb illuminated my quandary with the pre-school example. I never had a doubt that in order to fulfill the mission, the right choice would be to accept the child from the single mom. But how does one address the fiscal question? The answer is the strategic trajectory that one chooses.
In the algebra of nonprofits, to solve for “X” the leader of the pre-school needs to say: “we exist to welcome families from all walks of life so that they can be enriched by our pre-school experience…and we make this possible by earning revenue from tuition and by earning revenue from philanthropy. That is how we run our business, by viewing both our participating families and our financial supporters as necessary constituents to fulfill our mission.”
The pivot in my thinking is not that philanthropy is somehow a new part of the equation, but that its purpose is viewed in a different manner. Philanthropic giving is a strategic revenue source to realize the ultimate goals of the organization, rather than just to fill a deficit. The mission-driven business understands what its goals are and how to achieve them. The mission informs the choices that the organization will make, but the business planning ensures that it can sustain these choices in a fiscally sound manner.
Back at my synagogue, the service concluded and I felt myself moved by these insights. . The weeks ahead will surely allow me test my notions in real-life, and I hope to contribute toward making good decisions on behalf of my organization.
In this spirit of optimism, I hope that Rosh Hashanah is a season of renewal for people of all faiths, and that each of us has occasion to advance his/her understanding of the world in which we live. Happy New Year!
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It is funny that you would call synagogue an unexpected setting. I would say that it's a very conducive setting for profound insights - that's why I pray.
ReplyDeleteOtherwise, I think this makes a lot of sense. Collecting revenue and providing services are both important activities but the nonprofit model is not strictly fee-for-service. Even large, successful for-profit companies sometimes operate like that: e.g., Google collects revenue from advertising, but has succeeded because it provides a genuinely good search service - a lot of earlier companies failed by cramming so many ads into the search results rather than realizing they needed to decouple, to some extent, revenue from services.