Survey of Arts Management

Course blog for American University PERF-570, Fall 2014

Should Nonprofit Positions Be Profitable?

This past week’s readings about nonprofit versus for profit organizations got me thinking about one of my favorite TED Talks- Dan Pallotta’s The Way We Think About Charity is Dead WrongOur readings outline the direct benefits a nonprofit status has on the functionality of the organization, but don’t address the effects of a nonprofit structure on employees or overall organizational health. In his talk Dan Pallotta argues that in order to attract top tier talent to the nonprofit sector, there has to be a significant financial incentive, and that people should be rewarded financially for contributing to the wellbeing of others, just as they are rewarded financially for contributing to the wellbeing of private corporations. I’m not sure where I’ll stand with this idea by the end of the semester, and would love to hear what my classmates think!

 

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3 comments on “Should Nonprofit Positions Be Profitable?

  1. Jenni
    August 27, 2014

    “This is what happens when we confuse morality with frugality.” It’s so true. The non-profit sector is often brutally crucified for the same attempts at innovation that for-profit companies are using to produce higher profits and retain loyal customers. I know I personally found myself struggling with the decision to go for an MA or an MBA for this very reason.

    For me, this talk really begs the questions: where do we, as future Arts (and most likely not-for-profit) Managers, go from here, and how can we make truly affective change in today’s market?

  2. trishayoung
    August 27, 2014

    This was an interesting video. It seems like it would be more profitable to be a for-profit enterprise and do charity work as an objective. Like TOM shoes, or (RED). It can be a huge risk to take a chance on advertising when results cannot be guaranteed.

  3. benjamendouglas
    September 3, 2014

    I think he’s dead-on.

    Two quick examples: when the arts org I founded in MS hired its first ED, several board members successfully argued that cost of living is cheap in MS and so $50,000 would go a long way. There’s no doubt it’s a decent salary. But it isn’t enough to attract – and keep good talent. She left pretty quickly. For our next ED search, the board had changed and our mentality had shifted to a recruitment philosophy. We wanted the best director we could find – and we wanted to keep them. Rather than just a salary and health insurance, we boosted the salary to $65k; added a cushy retirement offer (our preferred candidate was leaving state government); a longevity bonus; and short-term free housing to help with the transition. We were looking for a very specific type of candidate, and were at a point where the success of the organization hinged on this one hire. I don’t think there’s a single board member who regrets the added “overhead.”

    Second: The Bill and Melinda Gates Foundation is doing tremendous work around the world. Do you think they will be able to stamp out malaria, or other diseases, by paying their doctors, economists, and other experts at nonprofit rates? In order to make major impact, the nonprofit sector has to be able to attract the brightest and the best.

    Now, the flip side of that is that you have to be doing excellent work, and have corresponding fundraising to support all of that. But, as long as the whole pie gets bigger, I think it’s definitely ok to pay people what they’re worth.

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