The Business of Charity

Non-profit organizations should be run like a business. That’s a common belief shared by many in our community. The idea seems to be that our local charities should adopt the practices used by for-profit businesses so they would become more efficient. Yet if you take the time to look at how the charities of Door County actually operate, you’ll quickly realize that they already use “business practices” because they are in fact businesses themselves.

Like any good business, our local charities are constantly looking for ways to improve their customer’s experience. Following the 2008 season, the Peninsula Players sought to increase efficiencies in their ticketing system. Through the use of time studies, software upgrades and a reallocation of personnel, they dramatically decreased the cycle time of the purchase of a ticket and thus enhanced the experience for their customers. Similarly, the Peninsula Music Festival switched to a new point of sale ticketing system, not only making it easier for their audience to purchase tickets but also realizing a savings in personnel costs.

Lots of Door County charities also do a great job evaluating their internal processes to best allocate their human resources. The Wellness Center of Door County conducted a time study to determine the real cost of the healthcare services they provide. As a result, the center transferred many administrative tasks that did not require specialized training to volunteers. That in turn freed up paid staff time, which was then reallocated to direct patient care.

Similarly, after months of planning, the Door County Humane Society recently implemented an entirely new process for recording their interactions with the animals in their shelter. In the past, separate paper files were kept for the intake of the animal, its medical treatment and the adoption process. Everything has now been streamlined into a single computerized database which follows the animal from the day in enters the shelter until it is adopted into a good home.

Our local charities also make great efforts to minimize their facilities costs. The Door County YMCA has placed frequency drives on their HVAC units and pool motors, switched to more efficient lighting in their gyms and use occupancy sensors throughout their buildings. As a result, the YMCA has been able to realize tremendous reductions in their utility costs.

The Ridges Sanctuary will realize similar savings by designing its new facility with energy usage in mind. By using natural sunlight, geothermal systems, and more efficient lighting fixtures, the Ridges is projecting a 48 percent reduction in energy costs once they open their new building.

Door County’s charities also have become very adept at looking at cash management issues and utilizing the bid process to keep their costs down. The Door Community Auditorium has spent the last year carefully tracking their cash flow. By shifting expenses commensurate with their better cash flow projections, DCA will realize significant savings by not incurring the interest charges associated with drawing upon their line of credit.

At Sunshine House they make a practice of regularly seeking out bids for contracted services such as insurance and accounting. This year alone Sunshine House was able to reduce its general liability insurance costs by a whopping 15 percent.

Our local charities also have adopted the use of market studies to help guide their decision-making. The Door County Maritime Museum recently completed a market study to determine the best ticket packages and optimal prices points. Prior to the survey, a tour of the tug boat was priced as a separate option. The study determined that there was a market for a higher priced combined ticket for entrance to both the tug and museum. This change increased the number of visitors who toured the tug by more than 50 percent and has resulted in increased revenue to the museum.

The simple truth is that our charities are businesses. They are corporations with customers, personnel issues, and operating costs – just like any for-profit business. In fact, one could argue that our charities are required to be more efficient than their for-profit counterparts because there is no profit to be made. Almost by definition, a charity loses money and is only able to balance its books through the generosity of its donors.

As a result, the administrative offices of our local non-profit organizations are typically humble and modest. Their staffs work in cramped quarters. Their computers are a generation behind, and used equipment and furniture are commonplace. Yet these dedicated charitable professionals are as savvy as any for-profit businessman or woman as they squeeze every last penny of value out of every dollar they’ve been given.

“I am a fully trained professional with a degree in Arts Management,” says Sharon Grutzmacher, Executive Director of the Peninsula Music Festival. “Orchestras are an industry and I am a professional in my industry.”

Thank goodness Door County is blessed to have so many highly competent professionals as stewards of our community’s charitable organizations. Thanks to all of you for all that you do.

Bret Bicoy is President & CEO of the Door County Community Foundation. In 2008, he and his wife Cari returned to Wisconsin to raise their six children in the community they love. Contact him at [email protected].