How do I draw these excellent people to my venture opportunity? Should we pay market rate for a for-profit manager or market rate for a nonprofit manager?
Every nonprofit enterprise must confront a core truth: if you want a profitable, sustainable business, you must pay for managers who are able to create market-based value — which in this case means money. If you want a former social worker to run your business like a program area, fine. What you will get is a new program area for your organization. If you want a venture that is economically successful, you will need managers able to deliver. They may come out of the nonprofit sector, but they MUST have the appropriate skill set to bring you the success you deserve. In order to get that experience, you may find that you will have to pay a business manager more than a program manager. This can be a difficult issue for any nonprofit to address, however it is also an important one for each organization to come to terms with. Ultimately, the goal of the social purpose enterprise is to get to a financial stage where it can pay market rate compensation to both managers and employees.
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