For the general public, the designation “nonprofit” is often correlated with donations. The thought of a nonprofit entity earning revenue and having customers can appear contradictory. However, these entities can earn revenue and have customers, so long as these transactions serve their mission and purpose.

Why, suddenly, is earning revenue and having customers an important topic for nonprofits?

As part of its convergence project to remove inconsistencies and weaknesses in existing revenue requirements, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This new revenue recognition standard is intended to improve the comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, including nonprofits.

How can a nonprofit earn revenue and have customers?

Many nonprofit entities have contracts with government agencies that request the performance of specific services and are paid by the government for those services. Often time these transactions occur when government agencies elect to outsource certain services. These arrangements may be in the form of fee-for-service contracts. Nonprofit entities will now be required to review the terms of all their contracts to determine whether they need to apply the new revenue recognition standard.

Under fee-for-service contracts, the nonprofit entity…

Performance measurement (PM) informs strategic decisions. It provides critical data for nonprofit leaders, board members and funders to understand the effectiveness of organizations in serving their missions. We are in a moment where PM has the potential to be more powerful than ever.

However, those within the sector are realizing that PM has not lived up to expectations. Social problems still endure, despite PM’s prominence as a way to ensure accountability and inform strategic decisions since the 1960’s. Limitations exist because PM has created tensions, instead of bridges, between funders and nonprofit service providers. To truly move the needle towards ameliorating social challenges throughout the world, we must revisit the efficacy of what has been measured and how.

To harness the full potential of performance measurement, funders and nonprofits must join together to co-create mutually beneficial methods and metrics. Five interdependent recommendations will move the sector towards this type of partnership:

Reframe performance measurement as an ongoing process of learning, instead of a process of accounting.

According to the W.K. Kellogg Foundation, PM is no longer about proving something works, but about generating information to better understand how and why…

America has a long and rich history of national service, often turning to it as a powerful lever in times of crisis, as it did after 9/11, Hurricane Katrina and the Great Recession of 2008. Now should be no different.

A massive expansion of service is required to meet today’s challenges. It has the potential not only to help build or rebuild much-needed community support systems ravaged by this pandemic, but also — if designed intentionally — to be an integral part of the nation’s intergenerational poverty-interruption arsenal. How we drive that expansion and whom it serves must be central to our approach if we expect national service to meet our society’s most urgent post-COVID needs.

Thankfully, this pandemic will likely inspire a new wave of national service. But it is imperative that those who enlist aren’t just the most privileged people who can most afford to do so; rather, they should be as representative of and accountable to the hardest hit areas as possible. The new opportunities for national service must be fulfilled by Americans who reflect the full tapestry of diverse backgrounds, voices and experiences that make up our nation — especially those who already live in the communities of color disproportionately affected by this crisis.

The pandemic is…

As the country shifts to becoming a true melting pot that exemplifies the notion of E Pluribus Unum, the nonprofit sector is lagging behind. The sector remains staggeringly white in its leadership structure and fundraising tactics.

Aziz Gueye Adetimirin says, “Just 7 percent of nonprofit executives and board members are African-American, while more than 80 percent are white, non-Hispanic. The ‘Daring to Lead’ study found that 82 percent of executive directors were white, that recently hired executives were just as likely to be white as their longer-serving colleagues and that executive directors under 40 were only slightly less likely to be white.”

The monolithic representation at the top of the nonprofit structure bleeds into representation among fundraising professionals. Raymond Flandez writes that “of the 61 [major] institutions they surveyed, 17 percent of fundraisers were members of minority groups. But very few blacks, Hispanics, and others were working directly with donors, the researchers noted.”

These figures do not mesh with the trending demographics in today’s America. Yuha Jung writes of this saying,…

The lifeline of all mission-driven organizations is the volunteer. According to the Independent Sector, a national advocate for the nonprofit sector, “A volunteer can impact the quality of services in charities and congregations while reducing costs.” Everyone loves to save money, but when is saving money more important than taking care of the people that help implement and accomplish the ever-changing objectives and strategic plans?

I enrolled in the Nonprofit Leadership and Management Program at ASU to gain an expanded view on the sector. It is clear that the manner in which an organization provides goods, services and outreach can be determined by human capital. Not being able to fully deliver these services can be attributed to the constraints on budget, staff and lack of resources. These limitations can be decreased if nonprofits embrace the voice and vision of the volunteer. 

CEOs in the nonprofit sector are often considered visionaries who chart the voyage of the organization. We are familiar with the marketing video of the visionary speaking to a group of volunteers and encouraging them to donate time or make a financial contribution, but what about championing the volunteer experience? When will nonprofits actually welcome volunteers as people who can also be a part of charting the voyage? Being able to fully utilize volunteers and truly benefit from their skill sets can be addressed with the help of a volunteer…