The Fallacy of Massive Revenue Growth in Charities

A common theme I am seeing today in boards and charity executives is an insatiable desire to grow exponentially. With brave statements like, “If you are not growing you are dying!” Chairmen push CEOs to create budgets that represent 20 and 30% (or more) compounded growth with little to no logical strategic thinking backing the targets. It sounds great I suppose, until they fail miserably at attaining the number. Then, regardless of the good work being done, the CEO has failed and the feeling of failure, much like other substances, flows down through the organization.

Jim Collins has taken a keen interest in his research and writing about what makes organizations great. He has written a progressive series of books (Built to Last, Good to Great, and Great By Choice) in which he studied the key qualities in leadership and organizational culture that has allowed some companies to last, some companies to move from being solid to best in class, and what choices those companies have made to become great.

In Great By Choice he identifies many attributes that great companies have embedded in their culture to form their organizations, but also maintain them, and – wait for it – uncontrollable double digit exponential growth is something great companies try to avoid!

So why are charities of all organizations trying to shoot for the moon? One could posit they have a vision to do the most good they can. I get it; it’s compelling and inspirational. But the work must be achievable.

Ironically it is from what I think is mis-interpretation from the first in that series of books, Built to Last, that many charities are stumbling. The term BHAG means “Big Hairy Audacious Goal” (read this article for more info). I think the disconnect comes when we focus on big being a specific number, rather than a way of being. To be “a best in class environmental charity” is a compelling and inspirational statement that can drive innovation and quality. To be “the biggest environmental charity” means you must be the biggest – but is that worth shooting for if you are not trying to be best in class? I think not.

Success needs to be about far more than hitting a big number. It needs to be about making a difference. We are humans; it needs to be about positively impacting other humans and changing their world for the better.

Listen, even writing this feels akin to a Jerry MacGuire-esque “mission statement” – not a memo, a mission statement – for the charity world, but I truly believe that many of us are not rightly applying some pretty good teaching from the business world. I am convinced that focussing on our mission and building the right-sized infrastructure to support it can equal wonderfully positive impact and greatness. Chasing a number to validate success is, well, empty.