Forbes: 10 Biggest Myths About Nonprofit Work

Nonprofits are among the most misunderstood companies in existence. While their creators tend to regard them highly, they usually get relegated to second-place status among other companies. Different areas of business tend to look at the field with confusion about how nonprofits actually work, whether they should be making a profit or what kind of causes they support. 

This has, of course, led to the emergence of numerous myths and misunderstandings about nonprofit work and what it entails. To rectify these erroneous assumptions and help clarify, 10 members of Forbes Nonprofit Council share some of the most common myths that exist about the nonprofit sector and offer concrete ways to correct the distorted view others may have of the industry.

1. Nonprofits Have Second-Rate Leaders

It takes extraordinary leadership to run a nonprofit. We have to use only a small portion of the funds raised to run the business. Nonprofit leaders often work in difficult places, helping hurting people and solving complex problems. Our impact is making a better world. Whether it’s the people or places you help or the donors who give, lives are blessed by the work of nonprofits. – C.H. Dyer, Bright Hope

2. Starting And Running A Nonprofit Is Easy

Many think that launching and running a nonprofit is easier than running a for-profit. I ran IBM’s Innovation Strategy practice globally and can tell you firsthand about this comparison. The regulations and reporting in a nonprofit are just as challenging as a for-profit. The lack of initial brand recognition makes it more difficult to raise money as well. Showing results quickly is critical. – Rosemarie Truman, The Center for Advancing Innovation

3. Nonprofits Don’t Need To Make A Profit

I believe the biggest myth associated with nonprofit work actually begins with the name “nonprofit.” I began using “not-for-profit” several years ago because while profit is not the primary focus of our mission-driven work, it is critical that nonprofits/not-for-profits are run extremely well so that they can be sustainable. We can’t make a difference in our communities if our doors are closed! – Arthur Mills IV, New Teacher Center

4. It Is Just A Tax Status

Many think of nonprofits as small, inefficient and not very professional organizations. Not true at all! Nonprofits are a fast-growing sector of the economy and many that support and champion important causes are also very financially successful organizations. The public sector used to look to the private sector for innovation and creativity—now it is time for nonprofits to shine! – Magdalena Nowicka Mook, ICF (International Coach Federation)

5. Nonprofits Are Not Metrics-Driven

Nonprofits are ultimately product/service-providing organizations. The only difference is that success is measured through revenue in for-profits while the metrics for nonprofits will vary by the mission and service provided. Nonprofits should be held to the same standards to ensure funds are being used to deliver value—and this can only be done if nonprofits are metric-oriented. – Deboshree Dutta, Women in Product | PayPal

6. Donations Are The Only Source Of Funding

Nonprofits depend on the support of generous benefactors. However, nonprofit leaders should not be 100% reliant on charitable donations to sustain their organization’s work. Instead, nonprofits should look to blend social enterprise models by offering life-enhancing products or services at affordable prices to beneficiaries or customers to diversify revenue streams and grow their missions. – Rupert Scofield, FINCA International

7. Nonprofits Are Simple ‘Do-Gooders’

Nonprofits are often seen as simple, unsophisticated and unaccountable “do-gooders.” Great nonprofits are engineers of social good. They use data to inform, listen to stakeholders, skillfully leverage community assets and design bold solutions to address a community’s greatest challenges or unmet needs. They create impact with thin margins while being accountable to the communities they serve. – Lynda Schueler, Housing Forward

8. A Nonprofit’s Sole Focus Is Alleviating Suffering

Many assume nonprofit work is focused on alleviating suffering; think food pantries, shelters and treatment centers. Less understood is the capacity for philanthropic collaboration to address the causes of suffering, namely lack of economic opportunity. Working together on systemic conditions may let us celebrate the closing of pantries, shelters, and centers because they are no longer necessary. – Thom Ruhe, NC IDEA Foundation

9. Nonprofit Services Are Free

For years, I have battled the assumption that services provided through our nonprofit are free. Nothing is free and someone is paying as a service might be funded through a local foundation or a fundraiser. Taxpayer dollars also sometimes support service delivery. The end customer may not pay in full, but someone has provided funding to the nonprofit to deliver goods/services. – Duana Patton, OHIO DISTRICT 5 AREA AGENCY ON AGING INC

10. Nonprofit Workers Are So Self-Sacrificing

When I started my company people told me, “Oh, you’re so self-sacrificing!” It was meant as a compliment, but I always thought it was off-base. Giving up my business career to help mothers and children was actually a huge win for me. Maybe I gave up the financial reward, but what I got was much greater—a chance to do work I sincerely found meaningful. Twenty-five years later, it still feels that way! – Howard Schiffer, Vitamin Angels

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