This past weekend, I, along with members of my fraternity, Phi Sigma Pi, traveled to Detroit. We were volunteering with the non-profit organization Blight Busters. Wanting to create a more positive community for his children, John George founded Blight Busters 18 years ago to revive communities in Northwest Detroit by demolishing dilapidated buildings and building new houses and community centers. Today, Blight Busters has worked with more than 120,000 volunteers to create millions of dollars worth of homes and facilities. They have even collaborated with The White House Fellows — a program of fellowships to senior White House staff — on renovation projects in Detroit and have been recognized by President Barack Obama.
Non-profit organizations like Blight Busters exist everywhere. At the University of Michigan alone, there are numerous outstanding examples of quality non-profits. These include GlobeMed, Habitat for Humanity and Students for Educational Equality. You may have worked on numerous service projects in school. You may even work to create your own non-profit organization in college or after graduation. But how does someone take his or her passion and turn it into a viable solution for the societal issues we face? We turn to the experts in the industry for some insights.
I fortunately had the opportunity to chat with George. An energetic and kind-hearted man, George spoke to me about his experience building Blight Busters.
“I started the organization for my children so that they can grow up in a community without all the negative things surrounding them,” George said. “We certainly face(d) challenges at first, like raising dollars and keeping volunteers motivated.”
George went on to explain that his organization motivates volunteers by giving them a holistic view of the communities they work for, providing fulfilling and hands-on projects and, after completion of the projects, showing volunteers the tangible impacts they made.
“We believe if we keep showing the good will and provide visible results such as the increase in home ownership and local businesses, the volunteers will be driven and feel a strong connection with what they are doing.”
George added that his organization has collaborated with a number of organizations at the University and is actively recruiting for volunteers.
In addition to having a strong, motivated team, non-profits also depend on the same organizational, technological and financial infrastructure that serves as the foundation of for-profit organizations. Apple, whose stock topped $500 this week, is a good example.
Its late CEO, Steve Jobs, proposed that managers should take ownership in the creative process and not rely on the people who you set out to help and serve. Henry Ford once said, “If I had asked people what they wanted, they would have said faster horses.” Another example would be Zara, the Spanish clothing retailer. The company’s store specialists use PDAs and other electronic devices to communicate directly with Zara’s supply chain and designers. This allows them to report changes in consumer taste on a real-time basis, providing Zara with a powerful competitive advantage.
Financially, non-profit organizations aren’t as concerned about profit figures like return on investment and pre-tax income. Instead, they focus on fulfilling their organizational missions — demolishing old buildings or making Detroit into a better city. Having acknowledged their focus, managers of non-profits should then create sets of financial statements that help them make decisions. On creating financial statements, I recommend reading Part IV of the article “How to Analyze Non-profit Financial Performance” by Harvard University Prof. Peter Frumkin.
With financial information, managers should then set objectives and goals for their organizations. Metrics for measuring performance vary for non-profits with different charitable missions but each involve measurements of absolute and relative effectiveness, efficiency, growth and liquidity. Take tree planning as an example. Managers are interested in how many trees they planted (absolute effectiveness), how they are performing with respect to peers with similar size and mission (relative effectiveness), how much time it takes to plant a tree (efficiency), how many more trees and how much faster they can plant trees this year compared to previous years (growth) and how well the non-profit can pay back its debt obligation and afford mandatory expenses like rent and wages (liquidity).
Managing a non-profit organization can be as challenging as managing any for-profit company. It’s vital that managers of non-profits know how to motivate their personnel and volunteers, create a sustainable organizational and technological infrastructure and use financial information to help set goals and evaluate performance. There is a plethora of resources available that you can use to help your cause.
If your organization would like to volunteer for Blight Busters, call (313) 255-4355.
Jason Pang Jao can be reached at pangjao@umich.edu.