Why Viewing Nonprofits as Businesses Drives Growth and Impact
Nonprofits play a critical role in society, providing essential services and advocacy for various causes. However, many organizations struggle with sustainability and long-term impact due to outdated perceptions of how they should operate. Too often, nonprofits are seen as charitable efforts rather than structured, strategic businesses.
In a recent conversation with Laura Bonnell, founder of The Bonnell Foundation, we explored why nonprofits should be viewed and operated as businesses, the mindset shifts necessary for long-term success, and how nonprofit leaders can embrace a more strategic approach.
Why Nonprofits Need to Operate Like Businesses
Many nonprofit professionals hesitate to see themselves as business leaders. Instead, they focus on their mission, often neglecting financial sustainability, operations, and leadership development. However, nonprofits must adopt business principles to thrive.
1. Financial Management Matters
A nonprofit’s financial health is just as important as its mission. Budgeting, revenue generation, and financial transparency are critical for sustaining long-term programs. Bonnell emphasized the importance of understanding where every penny goes, ensuring financial decisions align with organizational goals.
2. Fundraising Is a Business Function
Many nonprofit leaders feel uncomfortable asking for money, but fundraising is essential for growth. Bonnell shared how she initially struggled with fundraising but later realized, “I’m not asking for myself, I’m asking for the foundation.” This shift in perspective allowed her to confidently pursue funding opportunities.
3. Leadership and Team Structure Are Key
A successful nonprofit requires strong leadership, clear roles, and accountability. Just like any business, nonprofits must invest in staff development, board engagement, and operational efficiency to sustain and expand their impact.
4. Branding and Storytelling Drive Engagement
Nonprofits must market themselves effectively to attract donors, volunteers, and partners. Bonnell, with her background in journalism, leverages storytelling as a key tool for raising awareness and securing support. She emphasizes that nonprofits don’t need media experience to share their stories—they simply need authenticity and clarity.
Shifting the Nonprofit Mindset
One of the biggest barriers to nonprofit growth is how nonprofit leaders perceive their work. Many believe they must operate on minimal budgets, that making money is somehow unethical, or that financial success diminishes their mission. This mindset holds organizations back.
Bonnell pointed out that nonprofit leaders often devalue their own work, saying, “There is a stereotype that people working for a nonprofit shouldn’t make money, but that needs to change.” Nonprofits must embrace the fact that financial sustainability enables greater impact.
Reframing Nonprofit Work as Business Leadership:
Nonprofits are not volunteer projects; they are structured organizations that require funding, strategy, and leadership.
Nonprofit leaders are CEOs, managing teams, operations, and financial health.
Growth and revenue are not bad—they are necessary for scaling impact.
How to Strengthen Nonprofit Development
For nonprofits to grow, they must implement business-minded strategies while staying mission-driven.
1. Build Strong Financial Foundations
Develop a detailed budget that accounts for operational and programmatic expenses.
Diversify revenue streams through grants, corporate partnerships, and donor programs.
Regularly review and adjust financial strategies to ensure sustainability.
2. Master Fundraising Strategy
Shift the mindset from asking for money to inviting investment in impact.
Establish long-term donor relationships rather than focusing only on one-time gifts.
Utilize fundraising coaching to improve confidence and effectiveness in donor conversations.
3. Strengthen Leadership and Governance
Invest in board development and training to ensure strong governance.
Implement clear staff roles and accountability measures to enhance team efficiency.
Seek mentorship and professional development to grow as a nonprofit leader.
4. Leverage Storytelling and Marketing
Develop a compelling brand narrative that highlights impact and success stories.
Utilize digital marketing, social media, and SEO-driven content to reach broader audiences.
Create a media strategy to increase visibility and credibility.
Bonnell’s experience as a journalist underscores how authentic storytelling can transform donor engagement. She encourages nonprofit leaders to share real, impactful stories that connect emotionally with supporters.
The Future of Nonprofit Growth
As the nonprofit sector evolves, organizations that embrace business principles will be better positioned for success. Viewing nonprofits as businesses does not diminish their mission—it strengthens their ability to serve communities, scale impact, and create lasting change.
Key Takeaways:
Nonprofits must prioritize financial management, leadership, and strategic growth.
Fundraising is not about asking for money—it’s about building partnerships and securing investment.
Storytelling and branding are essential for engaging donors and expanding reach.
Bonnell’s work with The Bonnell Foundation demonstrates how nonprofits can balance purpose and profitability. By shifting perspective and operating like a business, nonprofit leaders can maximize impact while ensuring long-term sustainability.