Special Considerations

Nonprofits Issues

Nonprofits’ unique characteristics make them a special category in distressed advisory services. One authority identifies six managerial factors unique to Nonprofits :

1. Intangibility of services
2. Weak customer influence
3. Strong professional rather than organizational commitment by employees
4. Management intrusion by resource contributors
5. Restraints on the use of rewards and punishments
6. Influence of charismatic leader and/or organizational mystique on choices.

Among other characteristics of Nonprofits that distinguish them from corporations, it is important to consider :

The role of fund raising in donative organizations

The successful Nonprofit carefully manages its relationship with donors. Donors might be considered the Nonprofit’s “market” rather than end-customers and market “demand” viewed as what donors want to pay for. Another view is that donors should be converted to contributors” who form a constituency supporting the organization because it deserves it.

The role of volunteers as unpaid professionals

For many Nonprofits, its volunteer workforce is essential to its success and the volunteers must be managed well to ensure that success. This means attracting, developing, and retaining these unpaid professionals. They need training to feel competent and empowered. They need satisfaction from the work – not a paycheck – and rewarded with recognition and a feeling of accomplishment and fulfillment.

The Nonprofit has multiple constituencies and multiple “bottom lines”

The corporation which has one dominant constituency – shareholders – and one dominant metric for success – financial profitability. The Nonprofit has multiple constituencies and therefore multiple metrics to determine success. Its constituencies include:

End-users of its services
Donors
Other sources of funding e.g., government
Board
Staff
The “Community”

And “success” may look different to each of them.

SRA is deeply aware of these distinct characteristics of Nonprofit organizations and tailors its approach to each engagement bearing these issues in mind.