By Emily Brewer

Nonprofits need to be enterprising to make it in today's world.

Shouldering a greater burden than before, with fewer resources and higher expectations, nonprofits no longer can hold out their hands and reap sufficient funds to do the job, say observers.

Jim Johnson is one the nation's leading proponents of increasing the efficiency and efficacy of nonprofits. He founded and directs the Urban Investment Strategies Center in Chapel Hill, N.C., which supports struggling minority businesses by teaching them business and management skills.

"In an era of devolution at the federal level, with fewer and fewer dollars coming from the federal government to address community problems, the nonprofit sector is going to have to address more of those problems and be more entrepreneurial to raise money to meet that mission," Johnson says.

"Competition is going to become more intense."

To become entrepreneurial, a nonprofit first must examine the entrepreneurial and business skills of the existing staff and board, Johnson says. Then it may need to recruit staff with those skills and train existing staff.

Beth Briggs, president of Creative Philanthropy in Greensboro, N.C., says that as more nonprofits boast professional administrators at their helms and increasingly sophisticated boards, they have the ability to step back and look at the big picture of fundraising.

"Today they have business sense and they have people thinking about where the money is going to come from and what they can do to get it," she says. To look ahead, nonprofits need to draw up a strategic plan, keeping clearly in line with the mission of the organization, she says.

"Nonprofits need a strategic business plan and need people on the board who understand how to run a business and how to meet the bottom line year after year," Briggs says.

Increasingly, donors are looking for business objectives and a solid plan before investing their money in the organization because many come from well-run organizations, she says.

There are a number of initiatives emerging around the country that pair nonprofits with businesses that can share their know-how with nonprofits. On the West Coast, about 150 software millionaires have formed Seattle-based Social Venture Partners, which works to encourage innovative nonprofit groups.

Social Venture Partners works with funded agencies to boost their marketing, public relations, computing and technical skills. Executive director Paul Shoemaker says that while business principles cannot translate fully into the independent sector, there are lessons to share.

"There is one fundamental difference between the two: there is no profit," Shoemaker says. "Once you accept that notion, can some of the principles be brought over and applied? Yes. You don't care where the idea comes from. Ideas get brought to bear and added to the stew, and eventually you get better and smarter organizations."

Nonprofits also often are rewarded for collaborating with other organizations.

"There is a perception in the world that there is substantial overlap between organizations," says consultant David Winslow. "Funders see themselves as investors in projects and do not want to be approached by an organization with a mission and then by another organization with the same mission and with the same people on its board. One of the ways around that is to collaborate. "It's an important strategy for maximizing resources. And funders love it."

As the sector seeks to learn more and more from the business world, there is a danger, warns Don Wells, director of the nonprofit management certificate program at Duke University. If taken to the extreme, he says, every organization would be operated with the premise that it should be earning a profit.

"In part there's a desire that nonprofits can find ways to be self-sufficient, because then society wouldn't have to worry about supporting them anymore," Wells says. "There's the thought that wouldn't it be wonderful if nonprofits were this perpetual motion machine finding ways to fund themselves so that the larger society wouldn't have to worry about them.

"The idea that nonprofits could reach a state where the sector could fund itself through entrepreneurial efforts can never happen. It's the pursuit of nirvana in a way."

Emily Brewer can be reached at
emilybrewer@mindspring.com