Saturday, July 25, 2009

A Non-Profit Complexity

Throughout the last few weeks, I have been sensing a struggle that the Fulfillment Fund is dealing with: should the organization serve where the need is the greatest or where the “returns on investment” are highest? If this were a for-profit entity, there would be much less confusion. One of the benefits to for-profit management seems to be that many of the organizational questions can be solved with analyzing how they affect the value of the company. It is not this straightforward in not-for-profit organizations.

Take the Fulfillment Fund for instance. According to its publications, the purpose of the organization is to mentor, counsel and guide disadvantaged high school students to achieve a college education. To fulfill this mission, the organization should operate in the schools that have very limited access to college preparatory programs and services. Unfortunately, however this provides many roadblocks for the organization. The schools that may have the greatest need in Los Angeles may also be the most difficult to access and partner with, and thus the services are less effective. With less effective services, the organization risks not being able to communicate its impact to supporters and potential donors. If I were studying this organization as a for-profit company in my strategy class, the “right” path would be clear-cut: operate only in markets where its services are effective and profitable. If a non-profit takes this approach, is it running the risk of not fulfilling its mission? I am curious as to have a non-profit determines the appropriate scope for its services, ensuring both that it is fulfilling its mission and maximizing its return.

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