Strategy and the NonProfit Sector

1
Strategy and the Non-Profit Sector
2
NFP Sector in Canada

• Are business and strategic management concepts
  relevant in non-profit organizations?
• Are there certain aspects of life better managed
  by non-profit organizations?

3
Non-profit Sector in Canada

• Often ignored in discussions of strategic
  management
• However, this sector is important not only
  because of its size, but also because of the
  important benefits it provides society
• Hospitals, Universities, Social Service
  organizations, Arts councils, Food banks, Social
  clubs, Trade Associations and Places of worship

4
Aspects of Life Best Managed by Non-profit
Organizations

• Religion
• Education
• Charities
• Clubs, Interest groups
• Unions
• Health care
• Government

5
Non-profit Organizations

• Key Differentiator
• Source of revenue
• Profit-making firm
• Sale of goods and services to customers
• Non-profit firm (NFP)
• Dues, assessment, or donations from membership of
  sponsoring agency

6
Non-profit Organizations

• Strategic Decision Making
• Pattern of influence
• Derives from source of revenue
• Key to understanding management of non-profit
  organization
• Who pays for the delivered services?

7
Non-profit Organizations

• Strategic Management Concepts
• Institutional advantage
• Non-profit performs its tasks more effectively
  than other comparable organizations

8
Non-profit Organizations

• Strategic Concepts for Non-profit
• SWOT
• Mission statements
• Stakeholder analysis
• Corporate governance
• Portfolio analysis
• Strategic piggybacking

9
Non-profit Organizations

• Constraints on Strategic Management
• Service is often intangible
• Difficult to measure
• Client influence may be weak
• Client payments small source of funds
• Strong employee commitments
• To professions
• To causes

10
Non-profit Organizations

• Constraints on Strategic Management
• Resource Contributors
• Intrusion on internal management
• Fund contributors and government
• Restraints on use of rewards
• Result from 1,3, and 4