Earlier this week The Wall Street Journal ran a series of interesting and informative articles online in the Philanthropy section that we felt inclined to comment on. One in particular, entitled “Should Philanthropies Operate Like Businesses?” was especially thought-provoking. The article poses the aforementioned question and sets up a debate between executives Charles Bronfman and Jeffrey Solomon from the Andrea and Charles Bronfman Philanthropies and Michael Edwards, a senior fellow at Demos, visit web a social issues think tank.
Bronfman and Solomon, argue that philanthropies must absolutely take a business-like approach, suggesting that “whatever the mission, there still has to be a balance between revenue and expenses, and goals must be set and met for funding to continue.” While Edwards argues that philanthropies should “use business thinking only where it is appropriate.” He proposes that a too heavily business-minded approach to philanthropy potentially impedes a charity’s “capacity to do whatever it takes to reach their goal and the freedom to use it creatively,” which in his mind is the essence of what breeds success.
While Edwards presents a strong argument, we have to agree with Bronfman and Solomon on this one. After all it’s what we tell our clients every day — your donors are investors in your cause and deserve to see a return on their investment. The best way to provide measurable results is to run your organization with the efficiency and effectiveness of a business. Click here to read the full article and let us know if you agree. And while you’re there check out, “Why Overhead Is Vital For Nonprofits.” It’s another good read.