Built upon the same principles and insight of the sucess of the bestselling book Good to Great, Jim Collins and his team dedicate another chapter to address the social sectors (non-profits). One of the greatest insights I took out of this book is common flaw of how most people only judge performance of non-profits by their input. Basically, in the normal business sector, we critique businesses by both their input (money invested) and their output (profit, rate of return). However, most people don’t bother trying to measure output of non-profits because it’s harder to quantify. Generally, when evaluating the performance of a charity, most people put the most attention on the amount of overheard it has (high overhead = low efficiency). It’s even a marketing point for some charities. Collins points out that it is a mistake not to evaluate its output, which for social sectors is defined as the overall impact they have on their target audience. When looking at it this way, it’s quite possible for non-profits to have a higher overhead than other similar charities, yet have a greater impact on the community that they are trying to reach. Churches, which typically have higher overheads than most non-profits, fare better under this new lens.
Overall this is a great read, especially for someone one who works, volunteers, or financially supports the social sector.
4 out of 5
