You’d think that after the Great Recession exposed so many incompetent corporations, opinions might be changing toward nonprofits, but a recent survey says, “no.”

Madoff, AIG, Lehman Brothers, and General Motors have not dented the perception that for-profit corporations are more competent – although less warm and fuzzy – than nonprofits.

A least that’s what a recent survey, Non-Profits Are Seen as Warm and For-Profits as Competent:Firm Stereotypes Matter reports.

Surely they’ve heard of the Bill and Melinda Gates Foundation and Google.org. Do they think the brains behind the development of the technology that changed the world accepts incompetent staff in the nonprofits their foundations fund?

Nonprofits, both foundations like those mentioned above, and the many front-line organizations – Doctors Without Borders, the American Society for the Prevention of Cruelty to Animals and countless others – provide essential services with great outcomes in a wide range of service areas.

How is that incompetent?

This is, as the study noted, about perception, not reality. The term “nonprofit” generated a vision of generosity, kindness, honesty, sincerity, helpfulness, trustworthiness, and thoughtfulness. For-profit brought to mind confidence, effectiveness, intelligence, capability, skillfulness, and competitiveness.

People would rather buy from the latter. Go figure. You’d rather do business with someone lacking honesty and trustworthiness? The survey says, “yes!” Unless a reputable outside source has vouched for the nonprofit, a source such as a trusted news outlet.

So keep on top of your media relations and alert for opportunities to publicize your success.

Why is it important that nonprofits overcome this perception of incompetency? Obviously, because they want to attract donors and funders. But there’s another reason: More and more nonprofits are setting up business ventures to fund their operations, To be competitive in the marketplace, nonprofits must be perceived as well-run, competent enterprises. Some have already succeeded:
 

• Pioneer Human Services serves ex-offenders and former drug abusers by offering counseling, chemical dependency treatment, and housing programs, It also provides employment for the people they serve. Pioneer has a variety of businesses, from retail cafés, institutional food, sheet metal fabrication, aerospace precision machining, wholesale food distribution and contract packaging. These businesses fund virtually all of Pioneer’s $38 million operating budget. 
• PRIDE Industries creates jobs for people with disabilities. They operate in nine states and the nation’s capital, employing more than 4,300 people, including some 2,700 people with disabilities. PRIDE provides integrated facilities services; manufacturing and logistics services; and rehabilitation services. These business generate nearly all of PRIDE’s $145 operating budget.

If customers want to buy from competent organizations, nonprofits like these need to make their competency known.

We need to get that word out! An organization can be mission-directed, treat people well, and still be competent. Some talking points for that effort:
 

• Nonprofits are monitored by the IRS, and scrutinized by funders and rating agencies.
• Many nonprofits are governed or managed by people who learned their professional skills in the for-profit sector.
• Many nonprofit leaders have university degrees in nonprofit management. They are hired because they have specialized skill, not just because they are excited about the mission.
• The nonprofit sector is highly competitive because funding is limited.
• Nonprofits do more with less overhead than many for-profits.

For my part, I’m going to highlight a highly competent nonprofit on a regular basis.

How can the nonprofit sector change the perception that nonprofits are incompetent? What nonprofits do you think I should highlight and why?