October 16, 1997 | Read Time: 4 minutes
Instead of lamenting the lack of general public understanding of its undertakings, the leaders and managers of non-profit organizations would benefit from rereading 1984, George Orwell’s classic novel of life in a drab authoritarian society of the future.
The novel vividly illustrates the power of language to shape both perception and reality. In order to control individual and collective thought, Big Brother — 1984′s sinister and omnipresent dictator — invented Newspeak, a simplified version of English with an ever-shrinking vocabulary. By eliminating words like “bad” and substituting words like “ungood,” the government used language as a tool to control the lives — and even the thoughts — of its citizens.
In a similar way, the adjective we typically use to describe ourselves, “non-profit,” frames our identity in terms of what we are not rather than what we are. Like the characters in 1984, we must also suffer the consequences of that choice: a rigid, simplistic, sometimes mistaken view of our organizations that translates into an unnecessary diminishing of our effectiveness.
First and foremost, we are preoccupied with the idea that non-profit groups don’t make a profit. Indeed, we shrink from the term “profit” itself, preferring “surplus” or “change in net assets” — even though it’s actually the inability to distribute profits to owners, not the capacity to generate profits, that distinguishes non-profit groups from businesses.
Too often, that shying away from the notion of profit makes us forget that non-profit organizations do have a bottom line. No non-profit group — except in very rare instances — can survive perennial budget deficits, insufficient cash reserves, or a failure to develop diverse sources of revenue.
Boards and organizations often ignore that reality. In his 1996 book on the New-York Historical Society, Kevin Guthrie describes in detail how that organization’s board approved a long series of deficit budgets despite the society’s increasingly precarious financial position. At one critical juncture, the board noted in the minutes its reluctance to sacrifice the “present momentum” of its programs in order to balance the budget. In other words, why bother about financial matters when everything else is going so well?
A healthy financial picture is an indicator of a healthy organization. Financial distress is often merely the tip of the iceberg, an early and visible indicator of deeper problems of mission, leadership, or direction. An orchestra that can’t fill a concert hall, a social-services agency that isn’t serving enough clients, or a relief agency that can’t persuade donors to support its work all face fundamental problems — and will be particularly ill-equipped to correct them after years of deficit spending.
Another manifestation of the non-profit world’s Newspeak mentality is the tendency to revel in our perceived second- or third-class status — and to use it as an excuse for poor financial performance and other shortcomings. Low salaries, shoestring budgets, and obsolete equipment are badges of honor that we often wear with pride, believing them to be an integral part of our identity. That mindset leads talented people to believe that they cannot work for a non-profit organization if they want to make a decent living. It also encourages organizations to equate low overhead with effectiveness and to make excuses for poor performance.
The limited mindset about our world has bled through to the general public. Knowing only that non-profit groups “aren’t in it for the money,” the public tends to express outrage whenever it hears of a non-profit executive who makes a high salary or a management practice that sounds too mercenary or “businesslike.”
For example, a non-profit hospital in Canton, Ohio, recently announced that because it had accumulated a substantial reserve, it would be able to build a new facility in a nearby town without borrowing any money or asking for government assistance. That declaration raised eyebrows. “We thought our hospital was a non-profit,” said one newspaper reporter. “Now we find out it’s sitting on a pile of cash. Sounds fishy.”
One way to combat the harmful effects of those common misperceptions is to stop defining ourselves by what we are not. Leaders of non-profit organizations should make a more concerted effort to create a positive definition of our world. Certainly we have plenty of raw material with which to work.
The non-profit world is the sphere in which society’s aspirations are formed, where human needs are met, and where citizens get together to form associations based on their common ideals. We are also that segment of society where people give money to good causes without personal gain and where ideas and values are the primary motivators.
This is not a serious appeal to rename the world in which we operate. Many others have already proposed alternatives, which have not been widely adopted. It is, however, an appeal to examine how our self-concept has been influenced by the label we have chosen for ourselves.
Words and labels create reality. That’s what George Orwell believed, and that’s what non-profit groups can learn from Big Brother.
Richard L. Moyers is director of communications at the National Center for Nonprofit Boards in Washington.
