ROI in a Non Profit?

I had the opportunity yesterday to attend the Saratoga Chamber of Commerce event featuring Dan Pallotta at the City Center. Hundreds of business people came to hear the famous speaker elaborate on his iconic TED Talk, The Way We Think About Charity is Dead Wrong, one of the top 100 most-viewed TED Talks of all time. His aim - to change the way people view nonprofits and to encourage them to operate like a business not a charity. The rally cry: spend to make an impact, emphasizing ROI not overhead.

For businesses, it’s commonplace to allocate large sums to promote the company wares knowing that marketing well spent reaps sizable returns. In the nonprofit world, according to Dan, there is a double standard. Organizations with huge audacious goals such as eradicating a disease, stopping hunger or ending poverty are expected to remain humble while doing so, ask for free help and spend as little as possible to promote their cause.

Dan talked about the need for nonprofits to use funds for stronger marketing campaigns, better salaries to attract top MBA talent and, in a case about a soup kitchen - to spend on quality ingredients and an efficient, clean facility.

From my perspective in commercial real estate, I’ll add that the ideal office will also have a strong impact on a cause. How? Consider an organization whose mission includes advocacy. Close proximity to the Capitol, to politicians, to policymakers will put them squarely in front of those they are trying to influence.

Community-based organizations require a facility that will adequately accommodate their programs, in a secure building, in the neighborhood they serve. Environmental organizations will want to walk their talk in a building that produces little to no carbon footprint. Large volunteer organizations may seek a convenient, comfortable meeting space for their constituents so that more time is spent on the cause and not on the commute.

The cost of renting an office space or owning a building will take a slice out of the operational pie chart; yet, it may well be a factor that could make or break a nonprofit’s mission.