Question

What are some of the challenges that a non-profit faces that consumer businesses don't? Which sector would you rather work in and why?

Answer 1

Dealing with government regulations & tax reforms or concerns about organization growth & revenue are some of the issues that all businesses face. However, a non-profit organization might have to deal with several other challenges that consumer businesses do not:

1. Fund-raising: Every business is concerned about the inflow of funds from investors. However, convincing a donor to invest in a business that is not majorly thinking about making monetary profits is one of the toughest task at hand.

2. Staffing/Volunteering: With high rising wages in private companies coupled with long working hours, non profit organizations face a lot of issues with being able to find people to work for them.

3. Income & Budgeting: It is very hard for non profit organizations to ensure a consistent income & hence, budgeting for future projects is a major concern for such businesses.

4. Diversifying to Cover Expenses: With a need to focus on the idea with which the business has been established, several non profit companies often diversify to other areas when the going gets tough and they are unable to meet their daily expenses. This eventually results in the inability of the business to meet their objectives.

5. Reduced Government support: Governments ensure that non profit companies stay in business by introducing grants and schemes. However, when the budget in the government shrinks, these businesses are impacted the most & they eventually end up receiving less or worse, might get cut out completely.

Although all business need to excel in growth & ensure consistent investor funding to stay in the market, non-profit organizations are generally less stable in terms of existence. The concern regarding job security coupled with the amount of effort & time involved in working with a non-profit organization makes it a less convincing prospect when compared to a consumer business.