Category: economics

Whether a non-profit is a small organization working on a niche issue or a multinational giant working to end global poverty, I believe the big problem facing its administrators can be summed up this way: “How do we generate the most ________ given ______?” The first blank can be filled in with a metric of success for the organization. Things like “awareness,” “support,” “donations,” “participation,” etc.

The second blank can be filled in with whatever the relevant operating budget is for the program. Whether that number is $100 or $100 million is really irrelevant – the point is that non-profits have a finite amount of resources to accomplish a goal.

While there is a massive literature in economics, finance and management on how to maximize profit, there is not a ton of free resources on how to apply these intuitions to non-profits. The data and technical expertise required to perform these types of analyses also exceed the capacity of most small non-profits. As a result of these two factors, optimizing operation stratgies may seem like an impossible task for small organizations.