People Work in Nonprofits Because They Can’t Cut It in ‘Real’ Business
Myths and Marginalia
There’s a condescending assumption that floats around boardrooms and business schools: people work in the nonprofit sector because they couldn’t make it in “real” business.
For this next round of mythbusting… Let’s put that to rest.
Nonprofits Are Real Businesses
Nonprofits are as diverse as for-profits and are businesses in their own right. As I’ve written before, nonprofit doesn’t mean no profit. We just use our profits to better the community instead of deepening the pockets of investors.
In most cases, nonprofit leaders manage the same complexity as their for-profit counterparts: revenue generation, strategic planning, talent management, operations, compliance, risk, and growth. The difference is that we do it without equity compensation, often with tighter margins, and under the constant scrutiny of donors, grantors, regulators, and the public.
If anything, nonprofit leadership requires more skill, not less.
Billion-Dollar Missions, not Bake Sales
First, let’s consider the operations of some of the top players:
The American Red Cross operates on roughly $3.8 billion in annual revenue and served on 389 deployment sites in 2024.
The International Rescue Committee reported over $1.3 billion and reached 36.5 million people across 40 countries in 2024.
Doctors Without Borders (MSF International) runs on approximately €2.36 billion (about $2.5 billion USD), with 16M medical consultations provided and 1.6 million admitted patients.
The Metropolitan Museum of Art? Nearly $700 million in revenue and over $6 billion in assets. This includes 1.5 million objects from over 5,000 years of human creativity,
These are not hobby shops or community side projects. These are complex, global enterprises that demand sophisticated governance and leadership to match.
….And I can list more. In fact, there are about 1,000 organizations that report revenues over $50 million a year.
But I won’t let the giants make up the whole story considering small nonprofits, those with budgets under $5 million, make up 97% of the sector. Even at that scale, yep, nonprofits are still full-fledged businesses. They manage facilities, human resources, information technology, logistics, compliance, and public accountability. They file the same 990s, answer to the same regulators, and carry similar fiduciary responsibilities as the billion-dollar organizations. They just do it with fewer resources and less margin for error.
The Third Largest Workforce in America
Shifting from one set of numbers to the next… The nonprofit sector accounted for 12.8 million jobs in the USA in 2022. This represents nearly 10% percent of all private-sector employment in the United States. It is a major job creator and component of local economies, and even outpaced all branches of manufacturing, all construction, and all finance and insurance.
In some areas, nonprofit employment makes up an even greater share of the pie. Washington D.C. reports 25.2% employment in the nonprofit sector. Vermont, Massachusetts, Maine, New York, and Rhode Island each reported 17%.
This is a pillar of the American workforce, not a fringe subsector.
Welcome to The Real World
The myth that nonprofit professionals “couldn’t cut it” in business is lazy thinking at best, insulting at worst. The sector employs nearly 13 million people, manages billions in revenue, and delivers services that for-profit markets can’t or won’t provide.
…All while operating under much higher scrutiny and public involvement.
Running a nonprofit isn’t easier than running a business. It is running a business, with mission accountability layered on top.
So the next time someone suggests nonprofit work is for people who can’t hack it in the “real world,” remind them: the nonprofit sector is the real world for millions of Americans and the communities they serve.
💡 Next in the series:
Additional Resources & References
“Nonprofits Accounted for 12.8 Million Jobs, 9.9 Percent of Private-Sector Employment, in 2022.” Bureau of Labor Statistics, 16 Aug. 2024, www.bls.gov/opub/ted/2024/nonprofits-accounted-for-12-8-million-jobs-9-9-percent-of-private-sector-employment-in-2022.htm.
I couldn't agree more Caitlin. I spent 15 years in the charity sector and I often surprised when people outside the sector assume I have no 'commercial' skills from glancing at my CV. Yes I didn't work in the traditional business sense, but I managed project budgets, fundraised large amounts and ran my own consultancy for 7 years. These all require understanding business - and as you say - with that added layer of social accountability and mission layered on top.