Managing the Non-Profit Organization: Practices and Principles

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  • Edition: 1st
  • Format: Paperback
  • Copyright: 2010-06-03
  • Publisher: HarperCollins Publications

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The groundbreaking and premier work on nonprofit organizations The nonprofit sector is growing rapidly, creating a major need for expert advice on how to manage these organizations effectively. Management legend Peter Drucker provides excellent examples and explanations of mission, leadership, resources, marketing, goals, and much more. Interviews with nine experts also address key issues in this booming sector.

Table of Contents

Contributors xi
Preface xiii
PART ONE: The Mission Comes First: and your role as a leader
1. The Commitment
2. Leadership Is a Foul-Weather Job
3. Setting New Goals-Interview with Frances Hesselbein
4. What the Leader Owes—Interview with Max De Pree
5. Summary: The Action Implications
PART TWO: From Mission to Performance: effective strategies for marketing, innovation, and fund development
1. Converting Good Intentions into Results
2. Winning Strategies
3. Defining the Market—Interview with Philip Kotler
4. Building the Donor Constituency—Interview with Dudley Hafner
5. Summary: The Action Implications
PART THREE: Managing for Performance: how to define it; how to measure it
1. What Is the Bottom Line When There Is No "Bottom Line"?
2. Don't's and Do's—The Basic Rules
3. The Effective Decision
4. How to Make the Schools Accountable—Interview with Albert Shanker
5. Summary: The Action Implications
PART FOUR: People and Relationships: your staff, your board, your volunteers, your community
1. People Decisions
2. The Key Relationships
3. From Volunteers to Unpaid Staff—Interview with Father Leo Bartel
4. The Effective Board—Interview with Dr. David Hubbard
5. Summary: The Action Implications
PART FIVE: Developing Yourself: as a person, as an executive, as a leader
1. You Are Responsible
2. What Do You Want to Be Remembered For?
3. Non-Profits: The Second Career—Interview with Robert Buford
4. The Woman Executive in the Non-Profit Institution—Interview with Roxanne Spitzer-Lehmann
5. Summary: The Action Implications
Index 225


Managing the Nonprofit Organization

Chapter One

The Commitment

The non-profit organization exists to bring about a change in individuals and in society. The first thing to talk about is what missions work and what missions don't work, and how to define the mission. For the ultimate test is not the beauty of the mission statement. The ultimate test is right action.

The most common question asked me by non-profit executives is: What are the qualities of a leader? The question seems to assume that leadership is something you can learn in a charm school. But it also assumes that leadership by itself is enough, that it's an end. And that's misleadership. The leader who basically focuses on himself or herself is going to mislead. The three most charismatic leaders in this century inflicted more suffering on the human race than almost any trio in history: Hitler, Stalin, and Mao. What matters is not the leader's charisma. What matters is the leader's mission. Therefore, the first job of the leader is to think through and define the mission of the institution.

Setting concrete action goals

Here is a simple and mundane example -- the mission statement of a hospital emergency room: "It's our mission to give assurance to the afflicted." That's simple and clear and direct. Or take the mission of the Girl Scouts of the U.S.A.: to help girls grow into proud, self-confident, and self-respecting young women. There is an Episcopal church on the East Coast which defines its mission as making Jesus the head of this church and its chief executive officer. Or the mission of the Salvation Army, which is to make citizens out of the rejected. Arnold of Rugby, the greatest English educator of the nineteenth century, who created the English public school, defined its mission as making gentlemen out of savages.

My favorite mission definition, however, is not that of a nonprofit institution, but of a business. It's a definition that changed Sears from a near-bankrupt, struggling mail-order house at the beginning of the century into the world's leading retailer within less than ten years: It's our mission to be the informed and responsible buyer -- first for the American farmer, and later for the American family altogether.

Almost every hospital I know says, "Our mission is health care." And that's the wrong definition. The hospital does not take care of health; the hospital takes care of illness. You and I take care of health by not smoking, not drinking too much, going to bed early, watching our weight, and so on. The hospital comes in when health care breaks down. An even more serious failing of this mission is that nobody can tell you what action or behavior follows from saying: "Our mission is health care."

A mission statement has to be operational, otherwise it's just good intentions. A mission statement has to focus on what the institution really tries to do and then do it so that everybody in the organization can say, This is my contribution to the goal.

Many years ago, I sat down with the administrators of a major hospital to think through the mission statement of the emergency room. It took us a long time to come up with the very simple, and (most people thought) too obvious statement that the emergency room was there to give assurance to the afflicted. To do that well, you have to know what really goes on. And, much to the surprise of the physicians and nurses, it turned out that in a good emergency room, the function is to tell eight out of ten people there is nothing wrong that a good night's sleep won't take care of. You've been shaken up. Or the baby has the flu. All right, it's got convulsions, but there is nothing seriously wrong with the child. The doctors and nurses give assurance.

We worked it out, but it sounded awfully obvious. Yet translating that mission statement into action meant that everybody who comes in is now seen by a qualified person in less than a minute. That is the mission; that is the goal. The rest is implementation. Some people are immediately rushed to intensive care, others get a lot of tests, and yet others are told: "Go back home, go to sleep, take an aspirin, and don't worry. If these things persist, see a physician tomorrow." But the first objective is to see everybody, almost immediately -- because that is the only way to give assurance.

The task of the non-profit manager is to try to convert the organization's mission statement into specifics. The mission may be forever -- or at least as long as we can foresee. As long as the human race is around, we'll be miserable sinners. As long as the human race is around, there will be sick people. And, as long as the human race is around, there will be alcoholics and drug addicts and the unfortunate. For hundreds of years we've had schools of one kind or another trying to get a little knowledge into seven-year-old boys and girls who would rather be out playing.

But the goal can be short-lived, or it might change drastically because a mission is accomplished. A hundred years ago, one of the great inventions of the late nineteenth century was the tuberculosis sanatorium. That mission has been accomplished, at least in developed countries. We know how to treat TB with antibiotics. And so managers of non-profits also have to build in review, revision, and organized abandonment. The mission is forever and may be divinely ordained; the goals are temporary.

One of our most common mistakes is to make the mission statement into a kind of hero sandwich of good intentions. It has to be simple and clear. As you add new tasks, you deemphasize and get rid of old ones. You can only do so many things. Look at what we are trying to do in our colleges. The mission statement is confused -- we are trying to do fifty different things. . . .

Managing the Nonprofit Organization. Copyright © by Peter Drucker. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

Excerpted from Managing the Nonprofit Organization by Peter F. Drucker
All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

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Customer Reviews

Brilliant--and extremely helpful August 16, 2011
I read the textbook and listened to the tapes narrated by Peter Drucker. I found both very helpful and probably the "bible" for non-profit management. Drucker's wisdom and sensitivity in the art of management continues to establish him as a preceptor of management techniques for the new millennium. This textbook is very well priced compared to similar textbooks. It is an easy read that is straight to the point and easy to understand.
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