What Small Businesses Can Learn from Non-Profits and Vice Versa

What Small Businesses Can Learn from Non-ProfitsAfter hearing Siamak Taghaddos, CEO of GotVMail describe how non-profits have many of the same needs as small businesses, I wanted to see what others were experiencing.

I contacted four others who work with the small business community to get their take.

How did they see the needs of non-profits comparing with the needs of for-profit small businesses? And what can each learn from the other?

Here’s what they had to say:

Technology guru Ramon Ray says:

  • “From a technology perspective, the needs of non-profits are pretty much the same as those of small businesses. Small businesses need technology to help them do more with less and they have limited resources. Non-profits also need technology to help them do more with less and they surely have limited resources. Guess what — non-profit benefactors are happy that their money goes farther and small business customers are happy that they have competitive pricing.”

Brent Leary of CRM Essentials notes how much farther ahead non-profits are when it comes to managing ongoing relationships:

  • “One of the main things that small businesses can learn from non-profits is how to embrace new ideas and strategies for creating and enhancing relationships with those important to your cause. CRM typically stands for customer relationship management, but the ‘C’ can also stand for client, constituent or congregation in the case of churches. And churches have been way out in front in using tools like CRMto improve the service they provide to their congregations as well as to increase membership.As loyalty creation becomes even more important to survival, small business owners and entrepreneurs would do well to look at how non-profits are leveraging new technologies to stay connected and more in tune with customers and prospects.”

The always outspoken and provocative Andy Birol, author of “The 5 Catalysts of 7 Figure Growth,” says:

  • “Small businesses can learn from charities in how they handle their ‘customers.’ Charities are very good at setting up methods to retain and grow contributions. They have had to master direct marketing methods, to keep their members ‘sold,’ which are separate from acquiring new members. Businesses seem to look at such methods as too complicated and revert to sales people to both find and keep customers.The leadership of small businesses is always the owner. He or she must set a direction and achieve results. This differs from a non-profit director who is a hired gun and serves at the pleasure of the board and their divergent agendas. This often results in a non-profit losing focus and dwelling more on its survival. In this sense, the small business has it better as the interests of the owner, his/her company and their customers are much easier to align.”

David Wallace, CEO of search marketing firm SearchRank, sees the potential for non-profits to benefit from the same kinds of Web outreach as small businesses, but also sees them facing the same budget constraints:

  • “One of the biggest needs I see for religious organizations and non-profits is an affordable solution that would enable them to not only have an aesthetically pleasing and usable web site, but a content management system (CMS) that allows them to keep their sites up to date with ease. One of the major problems with church web sites, for example, is that they are not up to date. They also do not take advantage of all the interactivity that is available in today’s web sites (i.e. blogs, forums, video streaming, e-commerce, etc.). Why? Because these functions can be quite expensive to develop. A decent CMS, for example, if custom designed, can run in excess of $10,000.”

Do you work with, or volunteer in, any non-profits? How do the needs of non-profits and small businesses compare? Please share your experiences and leave a comment below.


Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.

9 Reactions
  1. While it is hard to find accurate data, the number of small non-profits has clearly grown substantially over the last decade. This has been driven by many of the same factors driving small business growth in general (tech, demographics, etc.) We think this will continue because all the major demographic groups (boomers in particular) are expressing a strong interest in social entrepreneurship – both in terms of working for/starting and in terms of funding small non-profits.

    In addition to the growing interest in starting/working for non-profits, the funding environment has changed quite a bit in the last decade. Donors are much more focused on outcomes and results, and less willing to give money to non-profits who are not well run. I once heard this called “the Gates Foundation effect” because of the focus on results that the large number of philanthropic ex-Microsoft employees and Gates Foundation has. This means to attract funding non-profits have to be run with a stronger focus on results – which makes them look very much like small businesses.

  2. I agree with Brent: “One of the main things that small businesses can learn from non-profits is how to embrace new ideas and strategies for creating and enhancing relationships with those important to your cause.”

    Loyalty is important to survival and joining others with similar causes can only grow and extend your relationships and contacts.

  3. Having worked in the non-profit industry and now owning my own small business in the real estate industry (I am a real estate stager), a lot of my non profit experiences really translated into running my own small business:

    *Making limited budget & resources work
    *Developing champions who will speak about your cause (in small business world: converting customers into your own marketing army who will talk about you all time)
    *Scientifically track your stats to understand the pulse of your business
    *Networking and meeting new people for your cause
    *Planning — marketing plan, prospecting plan

  4. Having worked with many charities I have to agree that there is a lot to be learned in doing so. The loyality and team work comes together. Cindy, love the “NEVER GIVE UP &NEVER SURRENDER”

  5. I work in both the for-profit (marketing) and the non-profit (founder and board member) sectors, and I can confirm that non-profits also need similar ools to small businesses. in fact, most ood nonprofits rn hemselves like a usiness, but just easure “pfrfits” a little bit differenty. The one difference I think is in bugets – nonprofits often have many things donated or discounted.

    For my nonprofit, both our website and email newsletter (typical small busines tools) have been some of the most important tools/investments we have made. We generate more than half of our “leads” (people interested in becoming a vounteer mentor) online.


  6. We have a great example of a religious organization using web tools designed for small businesses on our site. Members of St. Sava have been using a BizBlog to promote events and publish articles and photos from church-related gatherings. It’s interesting to see how they are using a blog to organize their cultural history. Member love it. Some check it daily. It’s been the most popular blog during private beta. Take a look:


  7. Seth Godin on Non-Profit Marketing


    Great posts. Brent mentioned “”One of the main things that small businesses can learn from non-profits is how to embrace new ideas and strategies for creating and enhancing relationships with those important to your cause.”

    This is especially true with marketing. However, I’ve noticed that small non-profits tend to be more risk adverse than for-profits – and this can severly limit their marketing muscle. See my post on what Seth Godin had to say to non-profits: