4 Myths About Nonprofit Organizations

Bob Brooks, MBA, Director of Public Administration and Assistant Professor of Social Sciences and Humanities at Colorado Christian University

Nonprofit organizations have always been an important part of American business and society, filling the gap of services not provided by private businesses or the government. During the past three decades, we have seen a substantial increase, with approximately 1.8 million nonprofit organizations in our country today.

Myths about Nonprofit Organizations

1. Nonprofits are Relatively Small, Insignificant Groups of Do-Gooders

When you think of a nonprofit organization, you may think of food banks, daycare centers, homeless shelters, and thrift stores. The reach of nonprofit organizations covers much more, including the environment, the arts, sports and athletics, healthcare, education, and political and political activist organizations. The list is virtually endless.

2. Nonprofits are Small, Nominally-Funded Local Organizations

While it is true that there are many relatively small nonprofit organizations right in your community, the size and breadth of nonprofit organizations truly cover the world.

The Mayo Clinic is the largest nonprofit organization in the United States, and it primarily focuses on medical research.

• Catholic Charities provides charity to the poor.
• The Red Cross provides worldwide disaster relief.
• Feed the Children provides food and nutrition, water and sanitation, education, and health services.
• United Way provides people with tools for success, education, and healthcare worldwide.
• The Salvation Army is an organization of Christian churches designed to help those in need of food and clothing.
• YMCA, operating for over 160 years, creates opportunities for learning and development through education and training programs.

Nonprofits in the U.S. raise revenues of almost $2.25 trillion and employ almost 13 million Americans paying salaries of over $630 million. These organizations not only meet vital social needs, but they contribute significantly to our country and the world's economy.

3. Nonprofit Leaders Are Unprofessional and Underpaid

Today's nonprofit managers must not only provide quality programs, but must ensure transparent finances, solid strategic planning, equitable human resource management, cutting-edge information technology, robust marketing, and other characteristics of operational management, no less rigorous than a private sector CEO. Truly, the skills required to oversee a modern nonprofit organization are copious, demanding an average annual salary of over $100,000. Several of the largest nonprofits in our country pay their chief executives over $1 million per year.

4. Business CEOs Have Greater Responsibilities than Nonprofit Executives

Surely one of America's most iconic success stories must be Steve Jobs and Apple, Inc. Apple employs 123,000 full-time employees and operates 504 retail stores in 24 countries. The thought of managing such a huge organization seems staggering. We can only imagine the leadership required to govern an organization of this size and complexity. The people in charge of such a massive operation must have exceptional knowledge and skills.

Consider this:

• United Way has 2.9 million volunteers, and 9.8 million donors, and operates 1,800 community-based offices in 40 countries and territories.
• The Salvation Army formed in 1865, provides assistance to 25 million Americans annually, serves in 130 countries around the globe, and has over 3.2 million volunteers.

So the next time you applaud Steve Job you may want to share some admiration for Brian Gallagher and Brian Peddle.