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Profiting From Non-Profits

I obligingly responded, "I work at a nonprofit," knowing full well what would follow: "You're kidding - you don't get paid?"
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This is the season of family gatherings, weddings, graduations, reunions. Last weekend I was at a family get-together and at least 30 cousins asked me 30 questions along the line of "What do you do?"

I obligingly responded, "I work at a nonprofit," knowing full well what would follow:

"You're kidding - you don't get paid?"

I always offer reassurance. Yes, we nonprofit workers do get paid. Okay, on average not very well. But we do make money.

"Why would you do that?"

"Didn't you go to college?"

"Aren't they closing due to the recession?"

"Isn't there a lot of corruption?"

And, of course, the topper: "I bet you could get a real job."

To the outside world, the term "non-profit" either suggests saintliness (Who cares about money?) or failure (Once again we have missed the quarterly earnings targets.), but let me give you the real story.

First thing you should know is that even though we're not in the game to make money, we bring a ton of it into New York City.

New York is the nonprofit capital of the world. More people work in the non-profit sector here than work in Finance, Real Estate and Insurance combined. According to a recent study by the Fiscal Policy Institute, 473,018 people in New York work in the non-profit sector. We're an industry. Major universities, like Columbia Business School, NYU Wagner School, Milano at the New School and Baruch train students in non-profit management. Yes, people are willing to pay thousands - sometimes tens of thousands - of dollars to prepare to work in the non-profit sector.

We organize ourselves by "issue" - hunger, homelessness, health, children, elderly, arts, faith-based, etc. You name it, we do it. But I can still hear you (or my cousins) saying "what exactly is it you do?" Fair question. Some days, even we wonder.

Many of us provide services - like tending to young ones, or frail elderly or the sick, or helping immigrants with legalization. But many more - a surprising number of us - work in management or upstream on policy or advocacy issues. A non-profit person interested in health might find a job as a nurse or doctor, anywhere from Memorial Sloan Kettering to the community-based Brownsville MultiService Family Health Center (a great organization, incidentally). But he might also become an urban planner, an evaluator, a systems analyst, an IT person or a human resources professional. In many ways we mirror the corporate system and need all the same skills.

Times are tough and everyone worries about lost employment. But from 2000 and 2007 the non-profit sector added more than 50,000 jobs. (Take another look at that Fiscal Policy Institute study commissioned by the Mayor.) We do have, as they say "limited resources." But the difference with us is that we've always had limited resources. That explains both the perpetual salary problem and our current buoyancy.

Most non-profits are small. Like most small businesses, we have to be resourceful, clever and effective. (Imagine what we could do if we actually had what we needed. It brings a whole new meaning to the concept of a "dangerous" city.)

A lot of our money comes from government. Not so much in those lovely stimulus packages. More along the line of: "We have to offer these services somehow - do you want to do it?" The city often subcontracts out work to non-profit organizations. Private foundations often hire us to provide "innovation" - ways to make things work better. Non-profits also raise money for themselves, frequently through fundraisers. (If you want to go to a few, let me know ...) Along with the usual direct mail solicitations, they hold raffles, small house parties and dinners. Someone once told me that there were enough restaurants in New York for everyone to eat out at the same time every single night. To tell you the truth, I think there are enough fundraising events in the city for every single New Yorker to go to at least one every night.

At bottom, the non-profit sector does that which the marketplace cannot do. (I'm paraphrasing Professor Lester Salamon of the Johns Hopkins Institute for Policy Studies.) These days, that's quite a lot. From where I sit, given the number of homeless, hungry, sick, unskilled, undereducated and just generally confused citizens in our city, there can't ever be enough nonprofits. Most are high energy, effective and relevant organizations. Corrupt? Are you kidding? We live under a microscope of scrutiny. Have you met Andrew Cuomo? Or Maria Simpson of the Mayor's Office of Contracting? No penny goes unaccounted for. As GM, the other kind of nonprofit, is about to find out.

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