Bettering the world is a mission stereotypically associated with the nonprofit world. Until recently, that is, when startups began finding meaning and profit in the same calling. The nonprofit and startup cultures normally seem to function on different planes, but when they put their heads together, they can learn much from one another. Here are five ways nonprofits can use tactics from startups.
- Pay employees well
Nonprofit salary is a hot-button topic because of the budgetary limitations they regularly face. No other industry faces the same kind of abashments the nonprofit does for paying employees well. Nonprofits often have much larger impacts than their profit margins show.
Most startup technology companies have profit margins between 15-20%, while nonprofits are expected to be at 85%. Given those higher expectations, hiring an executive director and giving them a manager’s salary will likely only perform at a manager level. Paying someone less than their worth will likely make them leave, which slows down the nonprofit’s ability to move forward and see results from their work. Therefore, paying positions what they’re worth ensures the future of the nonprofit.
- When hiring, look at previous experience more than titles
Nonprofits are similar to startups in how small but mighty the teams can be. It’s a given that everyone wears multiple hats. Someone who is in a senior role without extensive experience implementing programs will likely fall short. Likewise, someone who is just out of school or who has been in an entry-level position for years but has spearheaded new initiatives may be more appropriate for a senior position. The ability to lead, achieve goals, work in a team, and be a self-starter should always outshine a mere fancy title on a resume.
- Partner with other organizations
When philanthropic organizations run successful campaigns, strategic partners can make all the difference. In 2010, Zynga raised over $1.5 million in less than a week to help victims of the Haiti earthquake. They achieved this feat by partnering with other organizations like the popular Farmville game, through which players could see a donation platform. When donors see partnerships, they have increased faith in the organization, its reputation, and its mission.
- Focus on smooth user experience
In recent years, almost half of nonprofit donors did not give due to obstacles with websites. Likewise, the Nielsen Norman Group showed that improving website issues increased donations by as much as 10%. Startup companies, particularly in technology, found that user experience was equally important to the product they sell.
- Use metrics to assess and adjust
While money may not be the endgame for nonprofits, tangible results should be. Recent studies showed that 75% of nonprofits do not keep track of data showing their performance. Having information about impact, be it the number of people served, the amount of money raised, etc., is crucial to a nonprofit’s accountability and reach as well as its ability to receive grants. One method to improve this is Objectives and Key Results (OKRs), which is the process of breaking down the mission into a few key objectives and measurable goals.
No startup company could function without well-paid experts as employees with appropriate experience, partnering with appropriate other companies for mutual benefits, making sure their customers have a great experience, and looking at their metrics. Those in the notoriously cash-strapped nonprofit sector have much they can learn from startups, allowing them to have greater impact and long-term sustainability.