Beyond startups: Entrepreneurship in non-profit organizations
Entrepreneurial thinking is essential to the growth of non-profit and non-governmental organizations, Francis Pandolfi, the former chief operating officer of the U.S. Forest Service, said Oct. 18 at Princeton.
"Entrepreneurs have to be ready to deal with change and develop new opportunities from things that change. It is no different in the not-for-profit sector," he said. Pandolfi, who earned his B.S.E. in chemical engineering at Princeton in 1965, has experience in both the private and the public sectors. Prior to his position in government, he served as the chief executive officer of the Times-Mirror Magazines Corp.
Now working as a consultant to non-governmental organizations, Pandolfi discussed four important topics for non-profit entrepreneurs in the third workshop in the "Harnessing the Power of Entrepreneurship" series, sponsored by the Center for Innovation in Engineering Education. The series explores the application of entrepreneurial practices in settings other than startup ventures.
First, Pandolfi stressed the importance of a statement of purpose to non-profit organizations of all sizes.
"Private-sector organizations are profit-driven, non-governmental organizations are mission-driven," he said. "It's a very crucial distinction." This emphasis makes it imperative for organizations to have a compelling and competitively distinct statement that provides guidance and definition. "You're looking for an action tool versus a slogan."
All operations are faced with options and must decide between alternative uses for resources, whether a publishing house trying to choose whether to acquire another magazine or a small non-profit organization selecting particular programs to fund. A clear statement of purpose will help non-profit managers decide whether a given option will help accomplish their overarching goals, Pandolfi said.
Second, once a clear statement is in place, organizations must develop clear strategic plans, business plans and budgets to accomplish their goals, according to Pandolfi.
"A new idea without a plan is just another new idea," he said.
While strategic plans set a broad vision, business plans and budgets are necessary to spell out specific actions and tactics to bring the strategic plans to fruition, Pandolfi said.
Third, organizations must define clear performance measures to evaluate progress. Entrepreneurs in non-profit organizations have to focus on results just as they would in the private sector.
"If you can't measure it, you can't manage it," Pandolfi said.
Fourth, non-profit leaders should consider marketing. Pandolfi said experience has taught him that the concept of marketing is not typically well-received in either government or non-profit institutions because people tend to think of marketing as black magic -- convincing people to buy something they don't need for more than the product or service is worth.
"They don't get it," he said. "Marketing is finding out what people want and delivering it to them." It goes far beyond selling and requires extensive market research, which Pandolfi said is essential for non-profit organizations trying to remain competitive in a world where funds and volunteers are both extremely limited.
The next event in the workshop series, "Entrepreneurship in Higher Education," will be held at 4:30 p.m. on Nov. 8 in Bowen Hall Auditorium.