With the recent news stories on the US Post Office, I started thinking about the real challenges it faces. While is it not a nonprofit, it is a complex organization bound by regulatory oversight that makes a nonprofit Board look like a litter of kittens in comparison. It is full of dedicated and under appreciated staff and leaders who are delivering on a very big mission. This article will zip through issues facing the Post Office and deliver topics that nonprofits can learn.
There are several challenges the Post Office faces that can also occur in nonprofits, they are;
- Program Costs Exceed Revenue – Delivering the mail to every address, every day costs more than the revenue derived from postage. Since the postage rates are set via regulation, the Post Office has limited control of margins associated with this, its largest program.
- Significant Market Change – Email, online billing and funds transfer and the decline in letter writing all contribute to a long term decrease in mail volume.
- Mission Fixed – Being able to deliver to every household means that there are few variable costs, so when mail volume and revenue decline, costs do not.
- Pension Costs – Funding future benefit costs are a challenge for many businesses. This is an issue because great benefits have been used as a recruiting tool since salaries were not very competitive.
- Innovation – While the Post Office has introduced new technology, its approach has been evolutionary, and its timing has not been leading edge.
What Nonprofits Can Learn
Missions Change – organizations must learn how to be responsive to changes within their service communities. Sometimes that means ending services or programs that once formed the core of the organization.
Over-reliance on Benefits – the belief that nonprofits should pay lower salaries and make up for it with better benefits is a dangerous myth that has become reality. It is not sustainable and cannot continue, since hiring the best people is key to delivering the best service.
Jobs for Life – related to the benefits issue, many nonprofits balk at staff turnover. This has two negative results; bad performance is tolerated, and good performers do not advance. Nonprofits must learn staff development techniques.
Revenue Diversity – nonprofits need to be mindful of large core programs representing a disproportionate share of revenue. Diversity in programs, funders and revenue types is the goal.
Get Ahead of the Curve – nonprofits rarely have extra money to invest in innovation, however, those funds need to be a priority in fundraising and earned income programs. Finding new programs and new ways of delivering programs are keys to sustainable growth.
Nonprofits can learn a lot from the Post Office if they gain an understanding of this huge, complicated organization that fulfills a near impossible mission. The challenges it faces can provide insight for your organization. Help your nonprofit learn how to recognize and deal with changing client needs. Stamp out paradigms on salaries, benefits and employment practices, broaden funding sources and invest in innovation. These are routes that can deliver nonprofit fiscal sustainability and don’t let rain, snow, heat nor gloom of night keep you from success.
About the author:
Michael F. Cade is an advisor and executive coach, taking the nonprofit sector beyond the numbers. He is a leadership pathfinder, optimizing operations and strategy to help organizations attain long-term viability and relevance. His Framework for Fiscal Sustainability is an innovative approach for evaluating organizational health and securing the organization’s ability to deliver on its mission.
Mr. Cade publishes the nonprofit leadership blog Not for Profit Beyond the Numbers
If you have questions or would like a consultation on a nonprofit leadership or operational issue, contact him at: firstname.lastname@example.org