Debunking 8 Non-Profit Myths

Knowledge of non-profits and their operations is widely misunderstood across the globe despite easy access to information. If you get to ask around randomly, you’d be surprised by some of the things people have to say about non-profits. Some believe that all non-profit employees aren’t paid, while others think the organizations don’t make a profit.

This article debunks the common myths about non-profits and how GoldFinch ERP can help overcome each.

The Reality of Common Non-Profit Myths

The charity and non-profit sector is thriving, but the myths surrounding it limit its scalability and efficiency. The following are some of the common myths about non-profits and how an innovative ERP can help:

1. Non-profits Cannot Earn Profits

One of the most common non-profit myths is that they cannot earn a profit. Many assume that the term “non-profit” automatically means your team cannot make profits from its engagements.

However, these institutions should aim to gain some positive revenue to create a reserve fund and ensure sustainability. The only distinguishing factor is non-profits cannot distribute their profits to private individuals like for-profit companies. It is because the essence of tax-exempt non-profits is to benefit the public and not personal interests.

A non-profit-focused ERP allows your team to manage its financial status and increase profits. It would help to note that you’ll be more impactful to society when generating substantial positive revenue.

2. Non-profits Must Have Low Overhead Costs

Overhead costs are a massive concern for the running and management of any organization. In non-profits, many assume the overhead costs should be low and claim that saving the world can be done even in a basement.

However, this is not the case in reality. A non-profit’s overhead costs should match its size and outreach capacity. Most fail to understand that these costs are crucial to help achieve the organization’s mission without compromising efficiency or effectiveness.

Non-profits can only minimize overhead costs, and the best way is by implementing an ERP like GoldFinch. This software helps streamline internal processes to reduce costs, including overhead.

3. Non-profit Employees Aren’t Paid

Did you know there is a significant difference between volunteers and paid employees in non-profits? Volunteers dedicate their free time to work for the non-profit without pay, while employees get compensation for their efforts in the organization.

Data from the Bureau of Labor Statistics showed non-profits employed over 12 million professionals in 2016. Although the pay is not the best, it’s better than most private employment opportunities.

GoldFinch ERP provides a solution for all non-profits to manage employee payments using the payroll management feature. This feature contains all employee information, contact details, and other crucial data to help streamline payday duties.

4. Non-profits Cannot Be in Politics

Another popular non-profit myth is that they cannot participate in politics. Many argue that since non-profits receive financial assistance from government bodies, their political stances are often biased. Others even associate it with morality, claiming these organizations are too noble for messy politics.

Every non-profit has the right to voice its opinions publicly, especially on topics crucial to achieving its mission. They can act as advocates on matters of politics and speak up about laws, policies, and regulations. Pairing GoldFinch ERP with Salesforce CRM will help create a more transparent and communicative relationship with the public and make it even easier to achieve organizational goals.

5. Non-profits Rely on Foundations Only

Non-profits have multiple income streams but mainly depend on the support of generous benefactors. Non-profit leaders should ensure the organization is not 100% reliant on a single support source to help maintain sustainability.

The National Council of Non-profits released a report in 2019 showing where most institutions got their funds. Private fees for services were 49%, government grants came to 31%, individual and foundation contributions were 4%, while the rest came from other sources.

Since you’ll be collecting funds from different corporations, you might need a system to help keep track of your finances. GoldFinch ERP provides all the critical resources to help give an overview and comprehensive analysis of all the non-profit funding.

6. Non-profit Ownership

Did you know you cannot own a non-profit, even if you were the founder? Most entrepreneurs often assume that starting a charity organization automatically gives them ownership.

In reality, you cannot own a non-profit mainly because it exists for the community’s benefit and not yours. Non-profits don’t have shareholders; the profits are non-distributable to the board members or other stakeholders.

7. Non-profits are Inefficient

Another incorrect perception of non-profits is that their operations are often slow, unorganized, or inefficient. The underlying assumption for this myth is for-profit organizations are more strategic, innovative, and effective. Shockingly, recent research from the Stanford Graduate School of Business shows consumers are less willing to buy nonprofit-made products because of competence concerns.

However, this assumption is not valid for all non-profits. Some organizations will perform well, while others perform poorly regardless of the industry, from government offices to non-profits. Also, it is challenging to measure non-profit efficiency when objectives lack a defined bottom line.

The best approach to maximizing non-profit efficiency is implementing an ERP like GoldFinch. This platform pulls together your various departments and empowers your team with everything necessary to achieve your objectives effectively and efficiently.

8. Non-profits Aren’t Metrics-Driven

Non-profits are organizations providing products and services to the public. It means that they must keep track of the relevant metrics to maximize customer satisfaction and experience.

Unlike for-profits, which measure success through revenue, non-profit metrics vary with the organization’s mission and service provided. Considering these metrics helps ensure all received funds are used to deliver maximum value.

Most metrics-driven institutions often make more informed decisions and are more inclined to achieve their objectives. GoldFinch ERP provides a simplified approach to accessing valuable metrics in your data and helps make better decisions towards sustainability. With the right tools, you’ll find it easier to run and manage the non-profit.


GoldFinch is one of the best ERPs for non-profits, and you should consider it to maximize efficiency and productivity. Contact us today to learn more.

Scroll to Top