By Rachel Adrian
A recent report from Imagine Canada, Charities in Canada as an Economic Sector details the importance of Canada’s charitable sector in providing services to Canada’s most vulnerable. As the demand to address social and environmental challenges continues to rise, non-profits will become an even more important element of Canada’s society and economy. The report also highlighted some very interesting similarities between the charitable sector and small businesses.For purpose charitable organizations and for-profit small businesses have many similarities, and as a result there is an excellent opportunity for them to learn from each other. Here are my three key insights into the similar challenges (and opportunities!) that face both for purpose charities and their for-profit small business counterparts: 1. Flexibility & Creativity
In many ways, charities have had to learn to behave more like small businesses in recent years. Being nimble, adaptable and creative are key attributes that can help both charities and small businesses scale and sustain.
Both sectors face challenges in securing adequate funding for research and development.
A large majority of charities have few or no staff, similar to small businesses. Small firms dominate both sectors. Barriers to entry in both sectors are fairly low, but barriers to success can be high, as described in the report. Having few employees and a smaller scale of operations is a major commonality between the two.
Need to Define Their Purpose
This is very important for both for purpose charities and for-profit small businesses. They get so caught up in the day-to-day activities that they often forget to look at the bigger picture. Defining a purpose that guides everyday activities is critical for both non-profit and small business success.
Many charities try to do everything, rather than specializing in what they really excel at. Defining exactly what they do helps to establish a brand and clarify their role for consumers. Many small businesses face similar challenges in that they try to do everything for their customers, rather than specializing in one thing, that they can do really well.
Check out this case study detailing how we helped the YMCA Calgary re-discover and define their social purpose and incorporate it into their strategy.
The charitable and small business sectors have many similarities and a lot to learn from each other. Changing dynamics in both sectors require these organizations to be flexible, lean and ready for anything. As described in Imagine Canada’s report, charities are a growing sector in Canada and contribute a significant amount to our GDP.Here at JS Daw & Associates we like to describe the non-profit sector as ‘for-purpose’ rather than non-profit. The term non-profit can set these organizations up to be marginalized and tends to highlight what they don’t do over the incredible value and impact that they do bring to our communities. Why aren’t we highlighting what they do on a daily basis? I would argue that the outputs and outcomes of these organizations are an equally valuable, but very different kind of ‘profit’.While non-profits and small businesses do share many challenges, they also share a unique and powerful drive to succeed. Both sectors are critical to Canada’s economy and play a vital role in our communities.