Project Management is an art (with some science mixed in), the practice of which needs to change slightly depending on the sector (government sector, non-profit sector like charities, for-profit sector like corporates etc.) that it is applied in.
The command-and-control approach that may work well in a a for-profit organisation may not work well in a non-profit organisation. And the government sector requires a third approach.
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In this post we examine the differences between project management / leadership in a non-profit organisation and a for-profit organisation.
However, before going into the differences let us briefly look at what aspects are similar in project management / leadership between these two types of organisations. Some of them are:
a. the requirement of working within time and budget constraints
b. working towards an identified goal and outcome with work breakdown etc.
c. communications
d. need for stakeholder management
e. identification and management of risks
f. management of staff, resources etc.
g. change and change management
However, there are many differences in the project management / leadership approach needed between a non-profit organisation and a for-profit organisation.
a. Decision Making: Decision making in a for-profit organisation normally tends to be top down and decisions are normally clear cut. However, because of the nature of a non-profit organisation, decisions sometimes need to be arrived at after a broad consensus.
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This both delays decisions and blunts the sharpness of the decisions. A project manager needs to cater to this and expect that sometimes approvals may be slow in coming and so he has to learn to either reschedule activities or take a risk and make a decision to go ahead without approvals.
b. Staff attitude: Staff of non-profit organisations tend to be working in the organisation to serve a cause rather than to earn a salary. Hence they tend to be more open-minded and tend to challenge management decisions more often than in a for-profit organisation. The project manager / leader needs to accommodate this and learn not to be threatened by this.
c. Diverse Management:The board and management of a non-profit organisation need to have within themselves people of various backgrounds and skills. Hence they may be less technical and less technology oriented. The project manager / leader needs to keep this in mind while dealing with and communicating with management stakeholders.
d. Anti-corporate stance: Some members of the board and top management of non-profits may have a strong “anti-corporate” stance. Hence there will be pressure on lower level managers to, for example, use open-source systems rather than commercial systems. The project manager / leader needs to take this input while selecting tools and infrastructure. He need not always give in to the demands for using open source. However, he needs to do a thorough analysis and if he is using commercial systems he needs to have good justification.
e. Discounts: On the upside to the above, non-profits tend to get very high levels of discounts from corporate vendors for their products. Project managers / leaders need to be aware of these to take advantage.
f. Staff shortages: Non-profits tend to have chronic staffing shortages and many a time tend to use volunteers to get their work done. This means there could be a very high level of staff turnover. This is especially true in the user community. The project manager / leader has to make sure that he puts in place backup plans to deal with these turnovers among the users.
g. Budget Shortages: As mentioned before, non-profits tend to have budget shortages unlike for-profit organisations. Hence the project manager / leader needs to learn to work with poor infrastructure.
h. Qualitative measures vs Quantitative measures: One of the key differences that escape the notice of many is that non-profits tend to measure the success of a project and the effectiveness and impact using qualitative rather than quantitative measures, while a for-profit organisation thrives on quantitative metrics. “Numbers” make many non-profit management people uncomfortable. This is an important point to keep in mind while running projects for a non-profit organisation.
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The right form and right data for communication should be adopted so that the stakeholders can understand the status of projects. This means that the project manager / leader should learn to create rich, qualitative reports showing the progress of a project and not send up reports with a lot of numbers as he would have done in a for-profit organisation. [For example rather than just saying that the lives of 50 people were improved, it is important to indicate also how the lives were improved.]
We can summarise the above in a table:
| Area of project Management | For-profit Organisation | Non-profit Organisation |
| Decision Making | Quick and clear cut | Based on consensus, hence takes time |
| Staff attitude | Follows management decisions | Challenges management decisions |
| Board and management | Focussed group. Normally technology savvy | Diverse group. Less technology oriented |
| Board and management attitude | Strongly pro-corporate | May be anti-corporate |
| Vendor policy | Discounts based on volume etc. only | High discounts from vendors most of the time |
| Budget and staff availability | As per need | Normally there are shortages |
| Measurements and metrics | Normally quantitative | Qualitative preferred |
