Managing the Non-Profit Organization: Principles and Practices

by Peter F. Drucker

The groundbreaking and premier work on nonprofit organizations.

The nonprofit sector is growing rapidly, creating a major need for expert advice on how to manage these organizations effectively. Management legend Peter Drucker provides excellent examples and explanations of mission, leadership, resources, marketing, goals, and much more. Interviews with nine experts also address key issues in this booming sector.

Genres: Business, Leadership, Management, Nonfiction, Economics, Personal Development, Reference

258 pages, Kindle Edition

First published January 1, 1990

About the author

Peter Ferdinand Drucker was a writer, management consultant and university professor. His writing focused on management-related literature. Peter Drucker made famous the term knowledge worker and is thought to have unknowingly ushered in the knowledge economy, which effectively challenges Karl Marx's world-view of the political economy. George Orwell credits Peter Drucker as one of the only writers to predict the German-Soviet Pact of 1939.

The son of a high level civil servant in the Habsburg empire, Drucker was born in the chocolate capital of Austria, in a small village named Kaasgraben (now a suburb of Vienna, part of the 19th district, Döbling). Following the defeat of Austria-Hungary in World War I, there were few opportunities for employment in Vienna so after finishing school he went to Germany, first working in banking and then in journalism. While in Germany, he earned a doctorate in International Law. The rise of Nazism forced him to leave Germany in 1933. After spending four years in London, in 1937 he moved permanently to the United States, where he became a university professor as well as a freelance writer and business guru. In 1943 he became a naturalized citizen of the United States. He taught at New York University as a Professor of Management from 1950 to 1971. From 1971 to his death he was the Clarke Professor of Social Science and Management at Claremont Graduate University.

Reviews

[Pam Smith · Rating 5 out of 5]

Peter Drucker is acknowledged father of nonprofit management. The man is a legend and the insights in this book are why. Should be required reading for all those looking to work in a social service or advocacy organization. Frankly it's a must read for anyone in the nonprofit sector.

[Michael · Rating 3 out of 5]

This is a very useful book for people with little training in management, which is often the case for leaders in the non-profit sector. Drucker is typical of the "motivational"-type writer one encounters in the business world, and he is very good at providing advice and answers where they are needed. He is not especially scientific in his approach - most of the "evidence" in this book is purely anecdotal - but relied upon the type of "common sense" that has, in fact, proved more successful than science in the business world. This book is adapted from a series of audio tapes, which lends to its conversational tone. Drucker’s key insight in this book is that the product of the non-profit is “a changed human being,” that their ultimate purpose (whatever their specific mission and goals) is to provide a sense of connectedness and meaning to the lives of people in a world which lacks traditional forms of community. Accordingly, much of the advice in this book centers around how managers can help people to develop themselves within the organization, with the final chapter dedicated to the manager’s own development. Drucker strengthens his arguments with interviews with leading non-profit managers, who share their successes as well as the lessons learned from failures.

[Chad · Rating 4 out of 5]

Great book for anyone working in the non-profit space. This book focuses on the unique challenges that non-profits face relative to for-profit businesses, and the additional leadership required. The main challenges that resonated with me are:

1) Having many and varied stakeholders/customers (those you serve, donors, board members, community members, volunteers, unpaid staff, paid staff)
2) Attracting, growing, and keeping volunteers (converting them to an unpaid staff)
3) Determining the correct success metrics (can't rely on only revenue)

I think this book is great for all leaders, even those not working in the non-profit space. The lessons apply in the for-profit world, as well.

One thing that was consistent throughout this book was the importance of marketing and messaging. It makes a lot of sense that it's important to talk about the good work you're doing, and reminded me of this talk, arguing that "overhead" isn't a bad thing: https://www.ted.com/talks/dan_pallott...


== More detailed notes ==

Businesses supply, government controls, non-profits are "human-change agents"

Have unique challenges, can't "command" as they rely on volunteers. Need to offer volunteers something to attract them. Offer them a better self-perspective ("someone who as a citizen takes responsibility."

Need to give community and common purpose.

PART 1 - THE MISSION COMES FIRST

First job is to define the mission. Mission needs to be action oriented/operational. Can't be too lofty/vague.

Need to build in review, revision, and organized abandonment.

Focus on what you're good at as an organization. Can't/shouldn't do everything.

Good mission statement: Opportunity, competence, commitment

Leaders anticipate crisis.

Organizations need to grow with success. Need to know what to abandon. Can't be stagnant or do what was done in the past. Need to commit fully to changes, though.

Leave room for innovation, needs to be separate from some of the day-to-day.

Understand your customers, don't pilot things in a vacuum.

Picking a leader: Focus on strengths, identify the key challenges of the org, look for good character

Need to have role fit.

Leaders need to think "we", always think of the team.

Leader competencies: #1 Listen #2 Communicate #3 Realize the task is more important than you

Goal is to build something that will outlast you, something you can hand off (not dependent on you)

HIGH STANDARDS attract people to the organization. Need to have excellence. Creates self-respect and pride.

Leaders shouldn't pick their successors. Leaders shouldn't hog credit or knock subordinates.

Be market-driven, meet your customers.

Importance of change management, specifically training, for all big changes. Have a plan to land things, not just launch them. Give instructions & resources. Set them up for success.

Need to think through how to attract volunteers, not just serve the need. Can offer learning opportunities, etc. Volunteers are most important market. Give recognition. Importance of marketing to ALL stakeholders/audiences, not just donors and those served.

Leader needs to recruit, raise funds, and set values. Then DELEGATE. Give people space to realize their potential. Err on being more demanding. Give true responsibility.

Leadership is accountable for results.

PART 2 - FROM MISSION TO PERFORMANCE

Need a plan, marketing, people, and money.

Things given for free aren't trusted. Need to market/sell. "Easier to sell the Brooklyn Bridge than to give it away" Need to sell a concept.

Focus on results, don't put resources into things that don't deliver results.

Non-profit needs fund development strategy (better framing than fund-raising, more intentional). Important to have a board to help with these things. Need to build a continuing effort. Need to have donors believe supporting the institution is self-fulfilling.

To show results, define metrics and define "better." Don't leave anything vague or wishy-washy. Quality of goal is critical. Make sure goals are clear, and people know who are accountable.

When you are successful, question yourself. Refocus/improve during good times, much harder to do in bad times.

Always look OUTSIDE the organization. Talk to community, be on the ground, sit on other boards, get perspective.

Any unexpected successes are calls to action. "Why did that work? What were we missing before?" Be humble.

Marketing - start with the market and their need and work backwards.

Want to build "share of mind and share of heart"

Volunteer effort needs to be organized. Have job descriptions, add formality, have demands of your people. Again, high standards.

Need to make appeals to both rational and emotional. Ask donors for specific amounts, better to be specific than vague. "Can you donate $X today"

Think of people you are serving as customers, don't have a savior complex. Improvement is innovation, constantly improve. Doesn't have to be fancy.

Do market research. Understand who the potential customer is. Focus on what each constituency/stakeholder needs and how the non-profit can solve for them.

Train your people! Training is extremely important.

Strategy -> Action -> Results

Focus on customer values and needs, don't push yours on them

PART 3 - MANAGING FOR PERFORMANCE

Better to create a *want* than serve a need.

Avoid over-emphasis on easy results. Do the hard work.

Set goals for each constituency/stakeholder. Set long-term goals. Define the fundamental change you want to make in society. Constantly raise your goals.

Most important structural thing is good information sharing and communication.

HQ serves regions.

Important decisions should be controversial. If there's no dissent, give people more time to think. Encourage discussion.

Generally disagreement isn't over decision, it's over reality. Try to find common ground. Assume people are right, but answering different questions. Nice to have a respected critic/cynic in the group to pressure-test. Most important to have clarity of language here. Dig deep to ensure you are saying the same thing.

Pre-sell, get buy-in before announcing decisions. No surprises, you should know how people will react to decisions.

As an example, schools should focus on what types of humans they are trying to product (big question). Current system treats them as raw materials, passed from one thing to the next. Doesn't respect learning process, individual differences, interests, etc.

What does the org want to be remembered for? And do you have people accountable to make it happen?

PART 4 - PEOPLE AND RELATIONSHIPS

Need structured hiring, need a process.

Try to provide: mentor, teacher, judge (progress), encourager

You want employees that demand more. Push harder. "Why can't we do more/better?"

Check-in with others, ask for feedback. Let them know what is helping/hindering you.

Board needs to appraise performance of team. Also needs to fundraise. Need clear roles & responsibility between board and org.

Again, need high standards. Want to enrich volunteer lives in order to keep volunteers.

Boards are governors, sponsors, ambassadors, AND consultants

Keep board in the loop. No surprises. Don't try to go around them, leads to problems.

*** Encourage contrary opinions, thank whoever lost a vote for holding to their convictions and sharing their perspective. Let people save face and keep dignity, and also encourage more/better ideas going forward. Don't want people to be scared to share their thoughts.

CEO needs credibility and integrity with the board.

Executive's job is to make it easy for people to do their work, easy to have results, easy to enjoy their work. Easy for them to get results.

PART 5 - DEVELOPING YOURSELF

Strive for excellence. Make demands of people, let them live up to your expectations.

Respect yourself to set the example.

Promote those who leave behind a bigger job than they initially took on.

Know when to leave. Need to be challenged, growing. If you fall into a pleasant routine, time to do something different. Nothing worse than forcing yourself to go in in the morning.

Most important question is WHAT you work on.

Self-renewal (re-invigoration) is possible through teaching, going outside the organization, or serving down in the ranks.

Try to get responsibility and freedom to fail early in life.

Learn financials if you want the board's respect.

"You are responsible for allocating your life. Nobody else will do it for you."

[Christopher Thompson · Rating 4 out of 5]

not half bad — solidified many of the lessons ive learned so far

[Vincent Chough · Rating 4 out of 5]

Drucker is a management master. This book is full of his wisdom as well as the wisdom and experience of other giants in the field (pastors, president of Girl Scouts, etc...). The most important message - that so many do NOT seem to get - is that a manager/director is a servant. I read this at least three times. Great book.

[Derek · Rating 3 out of 5]

Looking back, I should have known my life had taken a wrong turn the moment I saw Drucker on a syllabus.

[Amy Christine Lesher · Rating 2 out of 5]

When the book was first published in 1990 and hasn't been updated in all this time there are problems. I finally had to stop reading during the interview with the then head of the American Heart Association. They were talking about having people go door - to - door for donations. The references to Sears, GM the Japanese are all out of date. Yes, there are some lessons to learn from some of these businesses, but things have changed drastically.

Also, instead of starting a book with your nonprofit is trouble, here's what you need to look for in a new Executive Director isn't the best way to start a book about leading a nonprofit. As someone looking to gain knowledge to be a good Executive Director I didn't feel that there were any lessons in this book that I haven't picked up in other books, other articles and other webinars. This book seems to be written to help healthy nonprofits continue their success and throwing in lessons on what an executive director should look for to continue or improve the nonprofit.

If this book will continue to have any reason to exist it needs to be rewritten to address issues in 2016, not 1990.

[Mark · Rating 4 out of 5]

A good book to read for anybody in the nonprofit sector, no matter where you place in the chain of command. Great advice on maintaining donor relationships, cultivating a staff ad board of directors, managing volunteers, and more.

[Michelle · Rating 5 out of 5]

Love it!!!

[د.نادر الملاح · Rating 5 out of 5]

In simple words: a great book for people concerned about management of NGOs.

[N · Rating 2 out of 5]

Sometimes I regret having spent all my B-School classes sleeping, day-dreaming or doodling. Then I read a book like this that reminds me just how depressingly unscholarly, hilariously un-nuanced, philosophically unexamined and smugly flippant about superficial panaceas the majority of the curriculum was. Time well slept.

Notes
Intro
Businesses discharge goods/services. Govt discharges policies. The product of the NGO is the changed life of a person.
NGO donations have ballooned, largest employer, yet still contribute only 2-3% of GNP.

Mission
Opportunity, competence, commitment.
Changes as opportunity for innovation, but put the baby in the nursery not the living room
Leadership skill: listen, communicate to be understood, subordinate to task (l’etat c’est moi), level-up.
Know your own degenerative tendency to find the balance between caution and rashness
Multiple customers in NGOs: beneficiaries, volunteers, funders
Develop people, not jobs

Performance
Improve what you do well: people, money, time.
Goals. Results. Resources. Tools. Logistics. Timelines
Marketing as way to harmonize needs/wants of outside world with resources/objectives of organization
Fund development (not raising): magnitude of challenge, goal, feasibility, impact of fund. Long term strategy of membership in change, not just donation.
Segment the funders, approach them differently.

Management
Get from servicing a need, to creating a want.
From keeping happy a single customer to now multiple constituencies: healthcare, from physician/patient to now insurer, company, govt. Aligning long term interest of all constituents
Organized for yesterday rather than today. NGO becomes an end in itself, a bureaucracy.
Organize around information: what info needed to do my job, what info do I have that others need for their job
High standards. Control of standards.
FDR never decided when there was consensus, things not thought through well enough. Synthesis more important.
Use dissent to resolve conflict. Invite dissent so it becomes just another fact to be considered in complex decision
Decision errors: too fast, selling decision rather than marketing. No testing. No champion to execute. No operational plan. No contingency. No contingency champion (blame game).
School performance: test scores. Productive citizen. Individual growth.
School as office, but as product not worker: here’s your desk, but new desk new boss every 40mins.

[Diego Parada Herrera · Rating 4 out of 5]

Whenever you read something from Peter Drucker, you understand why he is the single best management author of all times. He has a very detailed, yet simple focus on the most important aspects of management and leadership. This book is no exception, he understands perfectly the role of a nonprofit organization and its leadership and the fundamental differences with the business sector. The interviews in this book provide very different angles of the nonprofit management experience. The stories, facts and information provide interesting and applicable insights. The only thing that holds this book back in some ways is that the new breed of nonprofits is not included. It almost only talks about hospitals, churches and schools. But the principles are very useful anyway.

————

Cada vez que lees algo de Peter Drucker, entiendes por qué es el mejor autor de administración de todos los tiempos. Tiene un enfoque muy detallado pero simple al mismo tiempo en los aspectos más importantes de la administración y el liderazgo. Este libro no es una excepción, entiende perfectamente el papel de una organización sin fines de lucro y su liderazgo y las diferencias fundamentales con el sector empresarial. Las entrevistas en este libro aportan ángulos muy diferentes de la experiencia de administración sin fines de lucro. Las historias, los hechos y la información incluidos proporcionan información interesante y aplicable en la realidad. Lo único que este libro no tiene es que no se incluye la nueva generación de organizaciones sin fines de lucro. Casi solo habla de hospitales, iglesias y escuelas. Pero los principios son muy útiles de todos modos.

[Alison · Rating 3 out of 5]

A superior at work loaned me this book. Does what it says on the tin.

This book is in an interesting place where it's well written, but not well organized. The information is good, the personal anecdotes are relevant, but the topics just jump around from paragraph to paragraph. For the first couple of chapters I was struggling to figure out how we got from one chapter to the next. Then I just gave up and accepted that I was watching a very knowledgeable man have a very stream-of-consciousness conversation with himself about running charities.

I do feel like I learned a lot from this, though. I pulled a lot of quotes to think about and remind myself of later, I feel like I understand where management should be coming from better, and every time I put it down I was ready to Consider Things and Better Myself. I also picked up some practical knowledge stuff, like why fundraising departments are called "development" now.

It's also hilariously dated in some of the anecdotes, like where the president of the American Heart Association tries to advise on how to solicit funds from "a family in their 30s with 2 kids making $25,000." Also also, Drucker is clearly a religious man and likes to use the Catholic church as an example a lot, which doesn't bother me except that I don't know how the hierarchies within the Catholic church work so a lot of his metaphors were lost on me.

In conclusion, if you're aspiring to become director level or higher in a nonprofit or just work in a nonprofit and want to understand more about how and why the folks in the offices are making decisions, I would say this is definitely worth a read.

[Ray · Rating 2 out of 5]

Yikess.... sorry but this book definitely didn't age well. I read through it but found it be very general with tips like "keep improving yourself." It talks a bunch about how nonprofits were back in the 80s and 90s. Back then they didn't know about marketing but were going quite a lot. I also didn't find the interviews, which were about 2/3rd of the book, to be too helpful.

However, there were a few nuggets of information I liked:
* The product of a nonprofit is a changed human being
* The mission is forever. Goals are temporary
* Leaders need to anticipate crisis
* If you setup new systems separate from current systems it helps to keep the new prioritized
* People are attracted to organizations with high standards
* One prays for miracles but works for results
* Manners are the social lubrication that smooth friction between people
* Important decisions are risky. They should be controversial

[JournalsTLY]

Good intentions may not be enough.
This book - written in 1990 - has good leadership principles for NGOs as well as business companies for contemporary situations.

"Far too many leaders believe that what they do and why they do it must be obvious to everyone else in the organisation. It never is".

"Far too many leaders believe that when they announce things, everyone understands".

The aim of a good Non Profit goes beyond delivering (much needed) services. It aims to have changed behaviour and changed people. But there are complex relationships and processes, within the organisation itself, with the people you serve and with the ever changing social context.

"Keep your eye on the task, not yourself. The task matters, you are a servant".

After the introductory pages, a good chapter to jump into is "What is the Bottom Line when there no Bottom Line"?

A book that is worth redial several times over.

[Shauntelle James · Rating 5 out of 5]

This book opens the marketing-side of non-profits and integrates it with its candidates. Everyone is very familiar with the fact that non-profits are known for missionary. The author behind this book contrast the up-side and down-side management of businesses, and exemplifies how important they are in a non-profit organization. He makes clear that no organization can survive without compliance from its team players. As I read, I understood how team players should been given direct task management and monitoring. The author makes comparison against the Asian and the American business models. The book offers guidance on leadership roles and community morality. I would say its a must read for management students.

[Vaibhav · Rating 5 out of 5]

This is the first time I am reading Peter Drucker. This book by the hero of the management world is absolutely brilliant. Every other book I read about nonprofits has roots in this book. This book shows you how to do 'good' even better. A must read by anyone working in any capacity for nonprofits.

Before starting a book I thought interview chapters will be boring. But I was wrong. Interviews are power packed with the wisdom of distinguished guests from their experiences in the nonprofit world.

I will be going back to this book again and again.

[Abhilash Gosavi · Rating 3 out of 5]

"This book is intended for non-profit organizations, but after reading its contents on topics such as leadership, communication, selflessness, empathy, and team building, I realized it could be beneficial in my daily life as well. That's why I decided to give it a try. Although this book provides very basic information, it is critically important for beginners and serves as a foundation for further personal development. The interviews included in this book illustrate the significance of this foundation. Overall, I would rate this book 2.75 out of 5 stars."

[Thandeka Xaba · Rating 3 out of 5]

Really practical tool that NPO managers can use to streamline and strengthen their organizations. Quite old school though, it only has interviews with white individuals, one woman and lines like “the best way to beat burnout is by working harder” would not fly in this day in age 😂 - however at its core it definitely does provide some core principals which I intend on applying in my own organization.

[Chandar · Rating 4 out of 5]

Very useful book! Some words just leap out at you...in describing non-profit organisations, Drucker remarks that the job of the dominant sectors in the economy, namely government and big business, is to control and provide goods and services respectively, while non profits seek to 'change' human beings and take responsibility for community. I found that particularly relevant in the context of the utterly dysfunctional societies prevailing in most countries.

[Axel2795 · Rating 4 out of 5]

Muy buen libro para ayudar a crear o reorientar una organización sin fines de lucro. Las secciones invitan al lector a responder a las preguntas "¿cuál es nuestra misión?", "¿cuáles son nuestros beneficiarios?", "¿cuál debería ser nuestro rendimiento mínimo?", etc. de una manera amena e interesante. El punto débil que encuentro es que la mayoría de los ejemplos y las entrevistas son propios de Estados Unidos, por lo que las estrategias allí planteadas pueden ser poco útiles en otros países. En conclusión, recomendable.

[Dennis Sy · Rating 5 out of 5]

Classic Drucker for non profit leaders

All i can say is that i never regret reading this book and would have to reread this again to chew on some life transforming management principles in leading a non profit organization

[Kendra · Rating 2 out of 5]

Listened to the audio version of this book, which was an interview format with Peter Drucker. It was incredibly difficult to understand what he was saying, and the thoughts did not seem to flow all that well.

[Ross · Rating 4 out of 5]

Lots of great stuff to help leaders of non-profit organizations. Incredibly dated. Needs an update that embraces some ideas about using technology and, well changes in the sector through the last 30 years...

[Ashley M · Rating 3 out of 5]

A few good pieces of advice. Some aspects are nice to read about under the context of not always being a profit-driven organization, including decision making, stakeholder engagement, and mission strategy.

[Mikala Narlock · Rating 3 out of 5]

Reading this in 2022, there are many sections that made me visibly cringe. However, there are some very great points that he makes. All in all, it’s worth a read, but take much of it with a grain of salt.

[May Carter · Rating 3 out of 5]

It's a mess. Not to read but to digest, contradiction in points made. It's amazing this is used for higher education classes. But I came in knowing nothing and through my own research discovered much information using this as a start point. So it's not useless.

[Diana · Rating 3 out of 5]

Definitely had some good tips, but felt like some of it was fairly outdated (published in the early 90s). Enjoyed it after all and had some 'highlighting moments.'

[Ivan · Rating 4 out of 5]

Invaluable book from one the clearest thinkers on leadership management.

[Robert Henry · Rating 5 out of 5]

Excellent book. Embarrassingly, this was my first Peter Drucker book. He is impressive. I will be reading more of his works.