How is project management different in a nonprofit organization?

I do not want to mislead you with the title of this post. In my experience, effective IT project management is what it is, whether the project exists in a for-profit company or nonprofit organization. However, the culture surrounding the project and some of the challenges differ.

To restate previous content, projects have a specified beginning and end with a product or deliverable, as opposed to operations (business or nonprofit), which are ongoing. In nonprofit organizations, a project may involve setting up an IT network, building a user-friendly warehouse of information or creating a website to collect donations.

Because our friends at the Project Management Institute believe that the discipline and standards associated with project management apply equally to projects in nonprofit organizations, they created the PMI Educational Foundation in 1990 to advance “project management knowledge and the application of project management concepts and theory by society.” Through their Foundation, they offer training and scholarships in project management.

Here are my thoughts on similarities and differences from working IT projects at both types of organizations.

Project Management similarities between for-profit and nonprofit organizations

  • Projects need a plan that identifies goals, defines scope, assigns tasks and has measurable outcome criteria.
  • The project must further the strategic goals of the organization (Should tie to some organizational objective).
  • Projects need a schedule with task detail, dependencies, assignments and periodic reviews.
  • Resources must be acquired, held accountable and managed. See the post on Managing Virtual Teams.
  • How much the project costs really matters – and may be the deciding criteria for whether it is undertaken.
  • Tools for planning, cost and schedule tracking and collaboration facilitation help project managers do a better job (here are some additional comments on tools: “Six Views of Project-Management Software” from TechSoup – for nonprofit organizations and “Collaboration Tools for Virtual Project Teams” and “A Fool with a Tool is Still a Fool” from previous “Fear no Project” posts.
  • Effective communication with key stakeholders is essential.
  • Risks must be identified and managed. You don’t have to go overboard- just identify the most likely and highest impact risks.
  • Project managers should expect changes in the plan during execution.  Be flexible! Expect to have to change the plan to accommodate changes in the environment or organization.

Project Management differences between for-profit and nonprofit organizations (in no particular order J)

  • While folks managing for-profit companies usually have some academic and experiential exposure to project tools and project management requirements, individuals in nonprofit organizations may not.  Actually they quite often do not have a background in project management – so they might try to get the assistance of someone who does.
  • Nonprofit staff and management may understand less about technology and technical terms than people in similar positions in for-profit companies – although maybe not. I have met some really tech-savvy people in nonprofits and some technology-challenged individuals in large companies.
  • Service-oriented nonprofit organizations may find creating measureable or numerical performance criteria challenging, as they are more accustomed to working in a subjective environment.
  • Predictable charitable or grant funding for nonprofit multi-year projects may be even more at risk than funding is in for-profit organization projects. (Agile project development methods provide a process that allows completion of useful tasks without reaching all project goals, this is a way to make progress in case funding is cut or a grant proposal not funded in second or out years.)
  • Stakeholders may be more diverse as nonprofit organizations frequently interface with government and private agencies as well as having ties within their communities. So using stakeholder techniques is even more critical in nonprofit projects.
  • Nonprofits are eligible for free or low cost PM software like that available from TechSoup.

If you have worked on IT projects for a nonprofit organization, please share your insights via comments.

Other resources for managing non-profit or volunteer programs:

10 Responses to “How is project management different in a nonprofit organization?”

  1. Rosemary Wycherley Says:

    In my experience project management in NGOs is very challenging. However, providing they have the equivalent of a do-able corporate plan which clearly defines their reason for being and their strategic delivery plan, then the challenge of assigning performance metrics against which to measure project success is reduced significantly. Not for profit organisations usually have some very well defined drivers. Providing these are used as the basis, then quantitative measures can be applied to good effect.

    This is a great article and brings out some very useful pointers.

  2. Steve Wilheir Says:

    From what I’ve seen, the prevailing theme is “Do what you can with what we got, or what’s free.” That means lots of open source or single sourced software contracts. This goes for project management tools, software development tools and frameworks.

  3. Aravin Rangarajan Says:

    From my experience working for such a project, “Manage with tools that are available low cost (preferably free)” is the MANTRA. Also if the funding comes in from a government entity then be ready to prepare a lot of documentation with lot more details. Finally they are more stricter with respect to cost rather than scope and time. Any changes needs to be represented with respect to some known KPI’s as they are measured by such quantitative measures.

    Bruce, Once again an excellent article.

  4. Project Management Says:

    Excellent evaluation of the differences found within project management for nonprofit organizations! Great job

  5. Sydney Says:

    Very helpful info, thanks so much for explaining this

  6. Kimberly Bloch Says:

    Very elaborated and useful information. I am preparing for Project Management PMP and have subscribed the RSS of the website to get regular updates. Thanks for sharing such a useful information.

  7. PMP Says:

    Thanks for sharing your insight. I think the differences also depend on the size of the non-profit organization and whether the staff are paid positions or volunteers. For large non-profit organization such as Red Cross or United Ways, I think the differences are minimal.

  8. What Is The Most Popular Project Management Software In Canada? - Says:

    […] No Project explains the nuances and differences of using a project management software program in a nonprofit organization. Idealware lists some useful project management tools for […]

  9. Zia Says:

    Glad to find literature on project management in the not for profit sector. Interestingly the author has only picked IT sector projects for comparison which is a rarity in NPOs and mostly managed through external contractors/consultants in real situations. Even Red Cross (where I work) engages external contractors for IT related projects. However the thrust of NPO work is on designing (bigger NPOs) and delivering (most cases) community services projects which may be funded externally or internally. This is where significant challenges and differences lie in comparison to mainstream project management.

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