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Let’s Stop Assuming Non-Profits Should Just Be Run Like a Business

It is not uncommon for business leaders or entrepreneurs to suggest that charities need to behave more like business. Of course non-profit operations should be based on sound financial and management principles and practices, but I suggest blanket statements like “be more like business” ignore some fundamental differences between private and non-profit sector organizations. As well this default position of many business leaders is a tad insulting.

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Heretical Propositions

 Money can mean a lot of things for those who have it. It can feed us, open doors,  and keep us safe and warm. For those who have a lot of it -- we call that "wealth" --  it also provides influence and power. Those who make policy are those in power  and most of those in positions of power are making enough money to do more than  survive. In fact, onceyou have a certain amount of money and influence, one can  use both to create more wealth and power.

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Together, Differently

I sit on the Mayor of Edmonton’s Task Force to End Poverty. It’s a diverse group including the expected mix of leaders from government, business, education and community services. At a recent gathering we were working together to increase common understanding about poverty as well as to move forward with identifying strategies.

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Let's Play Pretend

Pretend you run a business that sells widgets that are critical to a buyer. The price of  each widget is $1000.00 and the buyer needs 100 of them. That’s $100,000. Now  let’s pretend the cost of each widget (materials, labour, reasonable marketing costs,  equipment maintenance, transportation costs, etc.) makes up 80% of the market  price, leaving you with a gross profit of $20.00 per widget or in the case of this order  of 100, a gross profit of $20,000 or 20% of the total price.

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Expanding Our Thinking About Poverty

For the majority of us, the experience of poverty is unimaginable. We intuit it must be difficult; we can read the reports of its impact and have some understanding, but in the end, we do not know poverty to the degree and depth those who live with it do.

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Becoming a Learning Organization

One key to organizational success has to do with the capacity of people to learn - learn from mistakes as well as learn from successes.The call for organizational learning has escalated over the years ever since our culture and economy transitioned from a "we make things" focus to what is called a "knowledge society."

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