I’ve been around non-profits for much of my career. First, WHAT I LOVE: I love the people involved - their passion and energy are so often unparalleled in other arenas, and they’re usually very knowledgeable in terms of why society has a lot of the problems it does. People in this world are also usually wired pretty well to meet those same problems head on… it usually makes for a really inspiring environment.
Now for some of the things I DON’T LOVE: I’m sure I’ll ruffle some feathers with this one, and I realize I’m over-generalizing, but far too often what non-profits have in passion and energy, they lack in practical knowledge that leads to sustainability. Translation: they’re spending so much time fumbling around trying to find money that they don’t have near the opportunity they should to engage that passion and energy.
Dan often talks about the above, so I won’t keep hitting on that - but here’s the real reason I wanted to write today, the REAL thing that I do not love about non profits: The Non-Profit ‘Halo Effect’. You may have heard about this in Psychology before… the idea goes like this: A physically beautiful girl (or guy) walks into the room and one immediately assumes that this person must also have all kinds of other tremendously amazing qualities (e.g. smart, funny, kind, etc…) - the truth is, the person could be a total jerk, but psychologists have actually proven time and time again that humans tend to attribute all kinds of great qualities to people, simply by virtue of physical attractiveness.
A similar thing happens when people hear the word ‘non-profit’. People learn that an organization is a non-profit, and automatically assume that this legal distinction must also mean: ‘they must have my best interests at heart’, ‘they must be doing great work’, ‘they wouldn’t waste my money’, ‘I don’t have to worry about them selling me something’, or any number of other thoughts that really have no backing other than the ‘non-profit’ distinction.
Here’s the problem with that - just like with the beauty halo effect, we have no idea that any of those things are actually true! In fact, they often are not. Yet, people continue to just assume that non-profits are somehow better at solving problems because of that title…
Let me give you a few examples: I used to work with a great company that has helped millions of people restore their financial, spiritual, and relational lives. It’s a for-profit, and does tremendous amount of good for lots of people using their services, but its also able to sustainably provide great jobs for hundreds of people - all without ever needing to ask for a donation or be scared that the loss of a grant could close its doors forever.
What’s more - when I worked there, I actually worked with a great deal with non-profits who were using our services - we were able to give them great deals, and often donate products to their mission because we were a sustainable organization. Despite this, I was continually amazed by the number of organizations who called in and believed they should receive a donation SIMPLY BECAUSE they were a non-profit. Really??? That tells me nothing about your organization! Who do you help? Why are you helping them? How are you sustaining that mission? Why will they take this 90 day class if they don’t have some skin in the game?? These questions are questions that anyone or any organization who wants to ‘help’ should address first. And while you’re at it, how about leading with the answers to these questions (e.g. your mission) instead of leading with ‘non-profit’ and expecting me to assume that automatically makes your organization better than any that seeks profit.
But there is one organization that has benefited from the non-profit halo effect for centuries who is ABSOLUTELY, HANDS DOWN the worst offender: Higher Education. Now, let me back up a little bit - colleges and universities should have non-profit distinction, it makes sense to me that they don’t pay taxes due to the tremendous intellectual value that they will bring to a community - to say nothing of the economic value they can add. I get that, I’m not mad at them for getting non-profit status - not mad at all.
What is upsetting to me is the extent to which they abuse the ‘non-profit’ halo effect. People assume that a university has their best interests at heart, that a university wouldn’t over sell them, and that paying what university asks makes sense because it is an ‘investment in your future’ - and they believe these things because they believe a ‘non-profit’ can’t hurt them. The reality is far different - going to a certain university never guarantees a certain result - in fact, in far too many cases today, students are graduating into a world that is a far cry from the one they had imagined as a freshman or been sold by a college.
This happens because the non-profit halo effect causes people to lose sight of a simple truth about universities: at the end of the day, they have to profit. They have to put butts in seats or they will close, so they will engage in a marketing strategy that looks dangerously like those pursued by many for profits. Here again, I’m not mad at universities or colleges for it - it’s a completely normal, understandable, and mostly honorable way to promote the benefits of an institution - but be honest to folks. Have them ask real questions about whether the value they will receive for the service will exceed the cost or if the university truly has their best interests at heart. Sadly, the non-profit ‘halo effect’ surrounding higher ed has led students to unquestioningly sign up for hundreds of millions of dollars in student loan debt that many are having difficulty repaying - so much of this could have been avoided if people would simply vet non-profits with the same process they use to evaluate any other organization: is this organization sustainable? Will I receive more value for this service than the value I place on the money I’m giving them? Do they have my best interests at heart?
I love a lot of things about non-profits, and I think our higher educational system is the best in the world - but I’m also convinced that the non-profit halo effect, if unchecked, will cause a lot of people to waste a lot of money and will cause a lot of great for-profits to be ignored, simply because people assume that a for-profit could never be engaged in doing the same kind of good as a non-profit, and that’s gotta change.
