October 23, 2007
Staff Picks: Jack Covert Selects - Forces for Good
What industry generates more than $1 trillion in revenues, is adding more jobs than any other sector, and is ranked #3 after retail and wholesale trade? Non-profits. The social sector is gaining momentum in its ability to serve communities and influence policy, and the time has come for business leaders to pay attention. Non-profits have been looking to business for better operating practices for some time, and now companies should be looking to their counterparts for equally new insights.
In Forces For Good, authors Leslie Crutchfield and Heather McLeod Grant report on their three-year study to find successful non-profits and pinpoint the practices that made them stand out from the 1.5 million other U.S.-based non-profits. The authors ignored traditional measures of success like overhead ratio or annual fundraising and instead looked for non-profits that "are driven to achieve broad social change... [and] have an unstoppable desire to create deep impact as well." Six practices emerged from the twelve case study organizations: advocate and serve, make markets work, inspire evangelists, nurture non-profit networks, master the art of adaptation, and share leadership.
In the world of non-profits, organizations tend to either provide services to a community (e.g., Red Cross) or propose policies to influence public debate (e.g., Brookings Institution, a D.C.-based public policy organization), matching a traditional view from business--offering either products or services. Providing both categories better serves customers and generates greater profits, but North-Carolina-based Self-Help has had greater impact learning from the constituents they serve and advocating legislation to further their cause. This non-profit started by providing mortgages to low-income families, and found through working with clients that over 10,000 families were losing their homes due to predatory lending practices. After successfully lobbying the state legislature, Self-Help established the Center for Responsible Lending, which conducts policy research and advocates for changes to state and federal lending laws. This effort has led to 22 states enacting anti-predatory lending laws.
Businesses can learn from both watching the social sector and working with it. The "advocate and serve" practice draws striking similarity to the philosophy John Bogle used in founding Vanguard with the lowest-cost indexed mutual funds in the industry, and then advocating that passionately customers purchase the product for their financial well-being. Danny Meyer's Union Square Ventures connected Share Our Strength with American Express as he looked to expand a "charge against hunger" campaign nationally. Forces for Good has the good ideas and inspirational lessons only non-profits can provide--and which the private sector can't afford to miss out on.
About Dylan Schleicher
Dylan Schleicher has been a part of the 800-CEO-READ claque since 2003. Even though he's stayed on at the company, he has not stayed put. After beginning in shipping & receiving, he joined customer service and accounting before moving into his current, highly elliptical orbit of duties overseeing the ChangeThis and In the Books websites, the company's annual review of books and in-house design. He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.