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What is Nonprofit Management?

April 2, 2021 | Staff Writers

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When most people think about a nonprofit organization, it’s the mission that comes to mind. Whether they’re helping the environment or providing support for people with various health conditions, every nonprofit has a cause. They are formed to pursue a goal that benefits other people or society as a whole. 

But to fulfill these missions, nonprofits need good management. You cannot separate the business side of a nonprofit from the mission because, without good business practices, a nonprofit can’t fulfill its mission. More than anything, nonprofits need stable income and smart financial practices to sustain the organization. This challenge is one of the main reasons why nonprofit management is a growing field.

Nonprofit management is a specialty focused on improving the way a nonprofit operates. Budgeting, marketing, growth, and staff management are all parts of operating a nonprofit successfully so they can continue doing important community work

You need specialized skills and training to work in nonprofit management, but once you earn a nonprofit management degree there are a vast number of opportunities available. 

How Do Nonprofit Management and For-Profit Management Differ?

It’s obvious from their names that the biggest difference between nonprofit management and for-profit management is profit. The primary goal of any for-profit business is to generate as much profit as possible and grow its share of the market. It measures success by selling a product or service that people want, making money for its stockholders, and expanding its market share.

In contrast, a nonprofit’s goal is to provide a service, often to underprivileged communities or for causes that help society as a whole. As the name suggests, nonprofit organizations do not exist to make a profit. The people who use the services of a nonprofit usually don’t pay them, which means that the nonprofit has to find alternative sources of income.

While a for-profit corporation has many ways to generate enough profit to sustain the business, a nonprofit has to be a little more creative when it comes to keeping income streams flowing. A corporation or for-profit business can create a new product, raise prices, try a new marketing technique, or branch out into a new market. A nonprofit, on the other hand, relies on things like memberships, donations, grants, sponsors, and fundraising. None of these income streams are easy to come by, and they all require someone with specialized skills and experience.

Maintaining stable income for a nonprofit can be tricky. Plus, accounting and bookkeeping require a high level of transparency as donors want to know where their money is going. That usually means a tight budget with little room for error. Fundraising management and maintaining a tight budget is something that nonprofit managers are heavily involved in.

The nonprofit sector often relies on volunteers rather than paid employees. They do have some employees, but a large part of the labor they rely on comes from volunteers. Good volunteer management is essential. One of the best things a nonprofit manager can do is effectively grow the support of volunteers to help keep the day-to-day operations running smoothly without having to spend any more of an already limited budget. 

The biggest difference between nonprofit and for-profit organizations is how they measure success. For a profit-driven business, the larger their profit is, the more successful they are. But a nonprofit business uses a completely different yard stick. They cannot track stock prices or profits to measure their impact. Coming up with ways to determine if the nonprofit is heading in the right direction is challenging because social outcomes are difficult to quantify. How do you measure social impact? How do you track harm reduction and wellbeing for a homeless population? A nonprofit manager is tasked with developing various metrics to assess their impact and develop a strategic plan for their organization.

For-profit companies often hire expensive marketing firms to help them develop an image that’s going to attract new customers, increase profits, and make sure everyone knows about new products and developments. Nonprofits have an even more difficult task. Donors choose where to give based on what cause means the most to them. People who are willing to donate large sums to charity want to choose a nonprofit that shares their values. Nonprofit organizations must market themselves as being efficient and effective while always acting with integrity. A big part of nonprofit management is maintaining their image to ensure that people want to donate to their cause. 

How Do Nonprofit Managers Differ from For-Profit Managers? 

Most managers in the nonprofit industry do not get paid as well as their for-profit counterparts, and their career paths are very different than those working in a private company. 

Generally, for-profit executives are driven by a desire to lead, advance in their careers, and take on high-level positions. Those who choose to work in the nonprofit industry are usually more driven by the mission, and the impact of that mission is their measure of success. Whether they want to make a difference in the world or feel passionate about a specific cause, nonprofit professionals are more connected to the work that the organization is doing. This connection gives them a higher purpose and a sense of fulfillment that some people cannot get from a corporate job.

This connection also means that managers in the nonprofit sector are likely to have more loyalty to the nonprofit organization they work for. A manager in a for-profit corporation is likely to leave if a better offer from a bigger company comes along. After all, if their goal is purely to advance their career, they are likely to take every opportunity to do so. On the other hand, a manager who is dedicated to their organization’s mission is likely to stick around for a long time. 

Nonprofit managers also have unique management skills compared to the for-profit sector. This mismatch in skills is why nonprofit management degrees and programs are so essential. These programs teach people who are interested in working in the nonprofit sector how to act like the manager of a large corporation. There are some differences, of course, but running a nonprofit like you would run a business is a key to staying viable. 

This balance in skill and the desire to make a difference is precisely why so many nonprofits look to hire someone with a nonprofit management degree. Successful nonprofit governance requires the right manager with the right education and experience.

Academic Disciplines that are Part of Nonprofit Management

Nonprofit management is a vast field that covers many academic disciplines. Some are what you might expect from a business management degree while others focus more on the nonprofit areas of philanthropy and fundraising.

Here are some of the academic disciplines that are part of nonprofit management:

Business Administration

Although their overall goal is much different, a nonprofit should still be run as a business, so business administration is a big part of nonprofit management. Business administration in the nonprofit sector focuses on ensuring that the nonprofit uses its budget as effectively as possible. They examine and approve budgets and closely monitor cash flowing in and out of the organization. 

All revenue must be accounted for and used properly and within the legal guidelines for nonprofits. In large nonprofits, this may even mean overseeing how funds are invested as another way to increase funds for the organization’s mission. 

Nonprofits must avoid debt, so budgeting is a large part of the business side of things. The organization should always operate within its means while being as transparent as possible about how they spend every penny. 

HR Management

Human resources are a key part of nonprofits, though most of the people a nonprofit manager works with are volunteers. Strong HR skills help a nonprofit manager organize and recruit new volunteers as well as manage the employees and consultants necessary to keep the organization going. This area requires knowledge in recruiting, interviewing, and legal compliance specific for nonprofits. 

Marketing

Marketing is an essential part of running a nonprofit. Maintaining a good image and reputation matters when it comes to fundraising and recruiting volunteers. Nonprofit managers must be skilled at public relations and fundraising as well as creating effective advertising campaigns to draw attention to both the nonprofit and its mission.

Accounting

Budgeting is one of the most important parts of running a nonprofit, and good accounting practices are essential. Nonprofit managers must not only be skilled at maintaining the books, but also legal compliance, ethics, financial reporting, financial governance, and the tax implications of being a nonprofit organization.

Skills and Qualifications for Nonprofit Management

Nonprofit management requires various skills and qualifications, some you can learn and some you have to develop with time and practice. If you’re thinking about pursuing this career, here are the things you need to know to be competitive.

What skills should you have for nonprofit management?

There are a variety of skills required for nonprofit management, including:

Leadership

Leadership is a requirement for any management position, but it’s especially important for nonprofits. A nonprofit manager deals with many unique challenges and needs to be decisive and inspiring to lead their team to success. They have to be able to motivate their staff and volunteers and must be able to clearly express the organization’s goals to donors and when being interviewed or reaching out to the media. Nonprofit managers must also make strong ethical and moral decisions and lead by example.

Communication

Communication is often the key to success in nonprofit management when it comes to dealing with staff, volunteers, donors, and the public. They must be able to clearly explain the organization’s mission and be able to convince people to not only support the cause but also invest in it by organizing and running fundraising events and reaching out to potential donors.

Tech and Data Skills

Just as technology and the availability of data has revolutionized business in the public sector, it’s affected nonprofits, too. A nonprofit manager should know how to collect and analyze all of the available data to make informed decisions about things like how and where to invest money to expand the organization’s mission and when and where to hold fundraisers. 

Vision and Commitment

As mentioned, people do not generally go into nonprofit management to get rich or with the hopes of getting into the corporate sector one day. Those who seek out this type of employment are usually passionate about the specific cause of the organization they work for or just want to do something that’s going to make a difference in the world. Believing in the mission of the nonprofit and being able to speak and act passionately for it are skills everyone hoping to succeed in this field need. 

Grant Writing

Grant writing is an art unto itself, and a nonprofit manager who is skilled in it can make a big difference for their organization. Grant proposals focus on the mission and the interest of the nonprofit and tailor the content to reach the organization offering the grant funding. Having experience with grant writing is a very marketable skill, especially when it comes to nonprofits.

What qualifications do you need for nonprofit management? 

Most nonprofits require a master’s degree to work as a nonprofit manager, though some may be willing to accept a bachelor’s degree with the right amount and type of experience. There are many areas of graduate study that are applicable, including: 

  • Public Administration
  • Business Administration
  • International Affairs
  • Public Affairs

Of course, a degree in nonprofit management is also extremely helpful and may be preferred, depending on the organization. Note that some institutions do not offer a separate degree program for nonprofit management, but they may offer it as a specialization in another MBA program.

Certifications for Nonprofit Management

After completing a degree and gaining experience in a nonprofit organization, there are some professional certifications available that can help make you more marketable in various aspects of the field. They include: 

  • Certified Nonprofit Professional. This unique certification is for candidates with a bachelor’s degree that aligns with the core values of the Nonprofit Leadership Alliance, an Alliance Management Institute capstone experience, and 300 internship hours. 
  • Certified Fundraising Executive. This certification is through the Association of Fundraising Professionals and is available to those with a minimum of five years of fundraising experience for a philanthropic organization. In addition to a written exam, those seeking this certification must also meet requirements in professional practice, service, performance, and education. 
  • Advanced Certified Fundraising Executive. The Advanced Certified Fundraising Skillset Executive (ACFRE) certification is the highest professional credential available in this sector. Those who hold this certification are considered experts at fundraising. There are many qualifications, including submitting a professional portfolio, taking a written and oral exam, meeting work and volunteer requirements, and getting approval from the ACFRE board.

Belief in the Mission

Though not completely necessary, a nonprofit management candidate should have a strong passion for the mission of the nonprofit they want to work for. Truly believing in the mission of the nonprofit they work for brings a passion and motivation that doesn’t come from a degree or certificate program. If you don’t have an interest, it won’t disqualify you from the position, but you should still be familiar with the mission of the nonprofit you want to work for and believe in their cause.

Jobs in Nonprofit Management

There are many job opportunities available for people in nonprofit management and a lot of ways to navigate this career path.

What are the different types of management jobs in nonprofits?

Some small nonprofits may only have a role for a general manager whose job will encompass all of these roles, but there are many large nonprofits out there that hire or specific management jobs. These include:

  • Administrative managers. Administrative managers oversee staff and volunteers. They are responsible for patrol, billing, and are often charged with secretarial duties. This role may also change dramatically depending on the size of the organization. Larger nonprofits with a large office staff may have separate HR managers while the administrative manager oversees the whole department.
  • Financial managers. A strong financial policy is essential to keeping any nonprofit up and running, and a nonprofit financial manager is an integral part of the organization. Generally, they manage the available cash and oversee all the incoming donations and fundraising money. This role is often defined by the size of the organization. Larger nonprofits may have one financial officer overseeing the budget and another for forecasting the financial future of the organization. 
  • Fundraising managers. Fundraising managers play an important role in ensuring the financial viability of a nonprofit organization. As most nonprofits survive on fundraising and donations, a lot of them are hiring fundraisers with the expertise needed to increase cash flow. In this role, a nonprofit manager would oversee online campaigns, apply for grants, and seek out new donors. 
  • Public relations specialist. As mentioned, a nonprofit’s image is essential to bringing in donors and attracting people to fundraisers. A nonprofit public relations specialist deals with the public and the media. They are often the face of the organization as they are usually the person giving interviews. Job duties for this role include writing press releases, participating or overseeing interviews in the press, planning community outreach, and acting as a spokesperson for the organization. 

What is the job market for nonprofit management?

In 2017, there were more than 12.5 million jobs in the nonprofit sector. Of these, about half worked for organizations with less than 1000 employees. As of 2016, there were 1.54 million registered nonprofits in the United States alone. Plus, it’s projected that jobs for social and community service managers will increase 17 percent between 2019 and 2029, which is much faster than most other fields. In short, there are many opportunities out there for nonprofit management, in a variety of industries. Some of the most popular nonprofit sectors include: 

  • Arts access and education
  • Animal welfare
  • Child welfare
  • Disaster relief
  • Environmental protection
  • Gender equality
  • Health
  • Homelessness
  • LGBTQIA rights
  • Peace
  • Poverty
  • Racial equality
  • Refugee assistance
  • Veterans

Within each of these areas, there are hundreds if not thousands of individual charities, each with a different mission and approach. Some nonprofits have been around for decades and have survived many difficult financial times, in part thanks to good management and fundraising because of a qualified nonprofit leader.

If you’re hoping to pursue nonprofit management, there are countless large and small charities out there and they all need good managers. Some may have been around for years while others are still in the early phases. 

Largest Nonprofits in the United States

There are plenty of local and state charities and nonprofits to choose from when you start your job search. But, if you’re hoping to work for a large organization, there are many popular options out there:

  • United Way
  • Feeding America
  • American National Red Cross
  • Habitat for Humanity
  • Direct Relief
  • American Cancer Society
  • American Heart Association
  • Salvation Army
  • Mayo Clinic
  • St. Jude Children’s Research Hospital
  • YMCA
  • Boys & Girls Clubs of America
  • Goodwill Industries
  • Planned Parenthood
  • UNICEF

As you can see, there are a wide variety of organizations out there, so you’re sure to find one that suits your skillset and has a mission you believe in for your nonprofit career.

Salary Expectations

The salary you make as a nonprofit manager depends highly on the organization you work for and your title within that organization. Generally, salaries break down as follows:

  • COO: $121,000
  • Director of Development: $69,000
  • Director of Operations: $74,000
  • Executive Director: $74,000
  • Financial Controller: $72,000
  • Program Manager: $66,000

Choosing a Nonprofit Management Degree Program

There are many nonprofit management programs out there to serve a variety of students, including those who wish to study online. A bachelor’s degree prepares students with the basic leadership and business skills they need to enter the field, but some nonprofits, particularly large organizations that are nationally known, may require a master’s degree to work in this role. 

Bachelor’s in Nonprofit Management

Graduates with a bachelor’s in nonprofit management can enter into a variety of roles, including fundraising, public relations, and HR. This degree will most likely secure you an entry level position, though, in a small organization, you can likely move up with the right experience. That said, a lot of people who ultimately go into this field start with a business management degree and go on to graduate school to specialize in nonprofit management. 

Master’s in Nonprofit Management

The best nonprofit management master’s programs offer a mix of theory and experience. Students complete specialized coursework and participate in internships and capstone projects to gain professional experience. 

One of the big reasons to consider a master’s in nonprofit management is the strong connections and networking opportunities that can eventually make you more competitive in the job market. There are many programs to choose from, including in-person and online options. 

People who complete a master’s in nonprofit management work in higher-level roles than those with a bachelor’s and may take on roles like CEO, executive director, or program manager for national or international nonprofits. 

Best Schools for a Master’s in Nonprofit Management

As mentioned, most people who go on to pursue nonprofit management start with a bachelor’s in business administration and don’t specialize in nonprofits until graduate school. If you’re considering applying for a master’s program, here are some of the best schools out there:

The following schools are known for having good online programs in nonprofit management:

Conclusion

If you’re considering a career in nonprofit management, rest assured that there are plenty of opportunities out there. While you may be able to get an entry level position with a bachelor’s degree, most large organizations look for candidates with a master’s degree. While some schools offer a separate graduate degree in nonprofit management, others treat it as a specialty under their regular MBA programs. 

Nonprofit managers are essential for keeping these organizations running by playing many important roles. From seeking funding from fundraisers and donors to managing the organization’s image in public and the media, this profession has many responsibilities. It’s helpful to have a passion for the mission of the organization you work for, but it’s not always necessary. 

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