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Nonprofit Organization Swot Analysis

Essay by   •  January 2, 2012  •  Case Study  •  316 Words (2 Pages)  •  2,031 Views

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One of the most valuable tools in management is a SWOT analysis. In this process, we identify factors in four areas: strengths, weaknesses, opportunities and threats. The first two factors are internal. The latter two are external to the organization. We generally run SWOTs on our own organizations, but they’re also used to analyze competitors. A small business will benefit greatly from a well-executed SWOT.

Nonprofits

A SWOT analysis for a nonprofit organization (also known as a non-government organization, an NGO or a public charity) is similar to the analysis for a for-profit, commercial business. Analysis for the nonprofit has no investors or return on investment to consider, but it has to weigh factors such as fundraising, volunteer staff and goodwill that a commercial firm does not. SWOTS are used to develop a company's marketing strategy. A small nonprofit organization should use it to plan financial development (fundraising) as well.

Strengths

NGOs have some strengths that commercial companies don’t. For one, NGOs usually are tax exempt. They can offer products at a discount since they don’t have the expense of taxes, and sometimes they can offer products to buyers who pay no sales tax on the purchase. NGOs often have a volunteer staff in many roles – artists, canvassers, attorneys. Volunteers can mean an enormous savings to the business, which is particularly important to a small nonprofit. The board of directors must by law be composed of volunteers, which can an be advantage to the company.

Weaknesses

Most small nonprofits barely cover their expenses with revenue. They can't match the salaries of their for-profit competitors. Nonprofit professionals typically are more focused on job satisfaction as compensation, particularly in small companies. An entrepreneur will have no opportunity for return on investment and often can expect a minimal salary. The budget problem also may be evident in purchasing from suppliers. Small NGOs are especially vulnerable to budgetary deficits and need to husband their endowments.

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