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Don’t Forget the Third Sector

Nonprofits, Non-government organizations, charitable organizations.  All of these are names for business organizations that serve a special public purpose and enjoy special treatment under the law.  Even though these corporations are called “non-profit” and cannot be designed primarily for profit-making, they should operate using sound business principles and ensure that their expenditures do not exceed their income.

I like to call these organizations “mission-based organizations.”  For profit corporations (the “private sector”) exist to make money for their owners.  If they don’t do this, they will not survive.  Mission-based organizations (MBO’s), however, exist to fulfill their mission.  If they do a good job of fulfilling their mission, they will often be entrusted with more resources from their stakeholders to continue fulfilling their mission.

MBO’s are required to have a board of directors.  While it is not illegal to compensate board members, most MBO boards are comprised of volunteers.  Because of this, the MBO board often struggles with vacant positions, board members with little time, and lack of missional focus.  An effective MBO board establishes and maintains the mission of the organization, selects the executive director, provides financial oversight, ensures adequate resources are available to accomplish the mission, maintains organizational accountability, participates in the planning process, recruits new board members, advocates for the organization in public, and assists the executive director in his work. 

Most MBO’s regularly review their mission and their effectiveness in accomplishing that mission on a regular basis.  Part of this process is planning how the organization will continue to accomplish this in the future.  This plan is called the strategic plan.  Your Small Business Development Center (SBDC) consultant can facilitate a strategic planning session for your MBO.
The executive director of the MBO is the face of the organization.  He is responsible for implementing and managing the strategic plan adopted by the board.  While the executive director is often tasked with raising funds for the organization, it is equally important that he be the “friendraiser” of the MBO.  The most important work of an executive director may be moving people along the “Loyalty Ladder” with respect to the MBO.  While many folks begin as suspects and prospects of an organization, the executive director can help them progress into friends, advocates and fans of the MBO.

This is important because MBO’s are dependent upon the great spirit of volunteerism in the citizens to accomplish their mission.   Americans volunteer almost 8 billion hours per year and give in excess of $335 billion dollars to MBO’s. 

In addition to time and treasure, MBO’s and their boards are also in need of people who can offer talent and “tribe” to the mission.  Some of the most productive time spent by the board and the executive director is time spent seeking and developing friends of the MBO.  Everyone has something to offer.  Is there an MBO that you can help with your time, talent, tribe or treasure?

Want to know more? Make an appointment at the FSBDC near you.  You can find locations here. Additionally, the FSBDC at UNF offers a blog specifically for nonprofits.  Check it out here.


Mark Yarick is a professionally, certified consultant with the Florida Small Business Development Center (SBDC) in North Central Florida and is hosted by the University of North Florida in the offices of the Suwannee County Chamber of Commerce.
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