The Brookings study makes explicit a couple of things that we know to be true:  First that people in the nonprofit sector are pursuing work that has a compelling purpose, high social value and offers strong personal meaning. This makes up for a lot of sins, which leads to the second obvious truth about nonprofit work; there is not much money in it. The pay isn’t great, the resources are slim, every dollar is over sighted to death, and little is reinvested in the people.

For a nonprofit manager, this combination of meaningful work and meager resources is a good thing. You have highly motivated people, who by and large respect their own work, their own organization and the people around them.  And, you get all this for a bargain. Best of all you have people who make a decent living, but know they are not going to get rich.

One implication of this is; contrary to the common belief that the nonprofit sector should operate more like a business, we should instead be remodeling business to look more like nonprofits. The business sector has people who find less meaning in their work, are not intrinsically motivated and who cost a lot more money. This is not a good thing.

The last thing we want to do is import most human resource practices from the business world. If I were a nonprofit manager, I would place an immediate embargo on business sector reward systems, motivational schemes, change management techniques and supervisory methodologies. Let the business sector exchange their best practices among themselves, but do not allow any application to the public benefit sector, lest we also end up with dissatisfied people making a lot more money.

This will leave the nonprofit sector free to take advantage of its greatest asset, the work itself. There is no need for nonprofit managers to invest money and effort to motivate people, control people, entice them to join or stay, coach and treat them like children–all of which the business sector seems compelled to do. HR should simply stay focused on making the work more powerful, making the culture more humane, and affirming the unique contribution this sector makes to society.

The biggest challenge for the nonprofit executive is managing the external relationships of their agency. Despite the strength and noble purpose of the public sector, the culture at-large still holds in contempt people who work for a purpose or calling. This is an expression of the materialism and cynicism of our culture.  The U.S. culture believes that if you are not driven by economic interest, there is a flaw in your character, or at least some gaps in your management capacity. Our cultural icons are mostly business people. Welch. Gates. This is a major obstacle for nonprofits.

We might use the occasion of this study to dispel some myths about the nonprofit sector.

Myth 1: The nonprofit sector employee is spending other people’s money and therefore more oversight is needed. You hear the belief that the nonprofit sector holds a unique public trust and therefore must be saddled with boards and reporting requirements that the private sector is not. The truth is that the private sector spends other people’s money all the time.

Unless you own your own business, you are always spending someone else’s money.

Myth 2. The business sector is more bottom-line oriented than the nonprofit. We have the illusion that the business world is more accountable to their constituents than the nonprofit. This is simply not true. The success of the business sector is dependent on externalizing their costs and negative effects to communities–and the very nonprofit agencies that we think are so un-accountable. In addition, the public sector is just that…public. Everything is transparent, on line, and therefore structurally accountable.

Recent events should finally convince us that the business sector is not even accountable to their most intimate constituents, their shareholders and employees. Major ethical lapses were exacted at a cost to society, employees, shareholders and pensioners. The occasional greed of public sector leaders pales by comparison. Where is this great business sector accountability?

The mistake of the nonprofit sector is to swallow the cultural myths about themselves. This is what is reassuring about this study. It indicates that most public employees have not bought the cultural version of their value. They know the value of the work they are doing. They basically respect their leadership, their colleagues and themselves. What this means is that nonprofit management has the possibility to lead more through partnership than parenting. There is more room for creating innovative forms of participation that affirm accountable citizenship among employees and clients.

The challenge is to not be distracted by private sector business values, which tell us that efficiency, effectiveness and productivity are worthy and sufficient goals; and that community well being, local control and long term relationships are luxuries rather than institutional core values.  For many years now, there has been a movement in health care and education to reduce costs. This has reduced the quality of health care, and shifted our attention from patient well being to provider costs. Similarly, in education we are investing heavily in the standardization of public education through high stakes testing, more efficient automated or long distance based teaching. Plus we have also invited the private sector to take over the task of educating our young, even though there is little evidence that the private sector is better at education, just that they can do it more efficiently.

When applied to the nonprofit sector, intense focus on efficiency and productivity tend to destroy its strength, it’s deep sense of purpose. The key is for the nonprofit executive to set aside the need to be more efficient, and ask the question how to take better advantage of the value of the intrinsic nature of the work. How can we deepen our impact on the public and make internal management processes more profound and life changing for the employee? The nonprofit sector is in the business of human transformation and development; and thus is a laboratory for applying all we know about how human systems organize and heal themselves.

There is great potential for social and public agencies to offer their employees and citizens a more democratic and freedom-supporting experience. If any of the ideas of participation, empowerment, and humanistic systems are going to become reality, it is in the public sector they have the best chance.

This cannot happen if we try to run more like a business and focus on efficiency, oversight, standard measures and enforced accountability. There is a cost to these practices that no one wants to measure: the people who do the watching cost money that is rarely made visible, the act of watching changes and usually shrivels what is being watched, and often the recommendations of oversight cost more and have side effects never taken into account.

This study is an affirmation of the strength and resources inherent in the nonprofit sector. It names and affirms its gifts to itself and its community. There will be a tendency when viewing any study like this to identify weaknesses and develop corrective actions. I would avoid any attempt at this. Working on weaknesses generally gives you more of exactly what you tried to eliminate. We do not need new pay systems, better training, new adaptive organizational structures, etc, which are just more mental models the business sector is in love with. We do need to name our individual and organizational talents and strengths. Simply naming them reinforces them–and gifts need to be named in normal day to day encounters. Minimally, each meeting should end with statements acknowledging the value received from each participant. This replaces our obsession with what needs improvement and what we should do better next time–useless conversations.

On a broader scale, we to need to pause and reflect on the fact that public service and social service are endeavors existing to affirm the community’s faith in its own goodness and possibilities. There is a place for altruism and idealism in modern society, there are people willing to give their lives to this. Despite the stinginess of our support, our public agencies, including government and education, are basically working.

The nonprofit sector is also our best hope for a strong democracy. This is where civic engagement and social capital is created. Democracy is an experiment in volunteerism and association and no one breathes these qualities more deeply than those committing their lives to the public benefit.

Peter Block, consultant and speaker, is a partner in Designed Learning, a training company that offers consulting skills workshops designed to build the skills outlined in his Flawless Consulting books. His most recent books are The Answer to How Is Yes: Acting on What Matters (Berrett Koehler 2002) and Freedom and Accountability at Work: Applying Philosophic Insight to the Real World, co-authored with consultant and philosopher Peter Koestenbaum (Jossey-Bass/Pfeiffer 2001). You can visit his website at