Convinced of the dynamism of nonprofit recruiting, Alford recently spun off TAG Executive Services, with headquarters in Skokie, Ill., which provides nonprofits with head-hunting services. Like most contemporary start-ups, TAG offers an Internet twist: an online job bank of résumés and job openings in the nonprofit community.
Why the sudden demand? Alford speculates it may be linked to the relative immaturity of the sector. He estimates that half of existing charitable organizations have sprung up since 1965, and as nonprofits mature so do their staffing needs. In addition, philanthropy plays an increasingly large role in the new economy and represents a steadily rising part of the gross domestic product. Of course, that growth has brought with it competition, which consequently forces nonprofits to sharpen their business skills to be as efficient and effective as any for-profit enterprise.
TAG opened its doors with six-figure angel funding and 10 clients "right off the bat, making it profitable from day one," says Alford. He projects that TAG will be a "multimillion-dollar enterprise within three years."
Alessandra Bianchi is a contributing writer at Inc.
Rembrandts in the Attic
As the for-profit and not-for-profit sectors become increasingly intertwined, entrepreneur Ian Peck has spotted in art-museum storage facilities what he considers to be a lucrative business opportunity.
Peck, 33, a former gallery owner and art dealer with a Christie's and Sotheby's pedigree, founded an Internet-based company in March 1999 that enables museums to make money off unused assets -- the works of art lying in storage. Those treasures are there, explains Peck, because museums in this country typically have space to hang only 6% to 8% of their permanent collections at any one time.
Peck's FineArtLease.com Inc., in New York City, is an online art gallery that provides access to thousands of works of art -- available for lease or sale -- from nearly 60 international museums, galleries, family trusts, and artists' estates. Clients, most often corporations wishing to dress up their walls, pay FineArtLease fees ranging from 2.5% to 15% of an artwork's value for as little as one day or as long as 10 years. Leasing a $100,000 painting for one year or more, for example, could cost $1,250 per month and includes insurance (courtesy of Lloyd's of London) as well as an option to purchase. Clients can search for a piece of art on the Web site by artist, genre, period, medium, size, or price range, specifying, for example, a Monet, a three-by-four-foot still life, or something from the Renaissance.
Corporate clients are embracing the site as a tax-deductible way to decorate, but FineArtLease's reception among the museum community is still mixed. "We've had very vigorous discussions about whether it's responsible to risk letting the artworks that we've been entrusted with out of our sight," says Chic Dambach, president and CEO of the 8,000-member Museum Trustee Association, in Washington, D.C. "But this gives us the opportunity to generate more revenues to preserve and protect all the works in our collections," he says. Peck, who is scheduled to close a second round of financing for more than $10 million, remains confident. "This is a revolutionary idea for museums, which are traditionally very conservative," he says. "But they are also the ultimate lemmings. Eventually, they will all flock to the idea."
Q& A
Getting for the Givers
For a closer look at how nonprofits are becoming business opportunities for for-profits, Inc. recently caught up with Stacy Palmer, editor of the Chronicle of Philanthropy, a biweekly newspaper that has been covering the nonprofit world since 1988.
Inc.: Why are businesses suddenly going after the spending dollars of nonprofit organizations?
Palmer: A big reason is that nonprofit groups are growing fast. At last count the Internal Revenue Service had classified more than 700,000 organizations as charities. A decade ago, there were only 465,000. And a recent Boston College study predicts that the coming decades will be a golden age for nonprofit groups, largely because of the huge transfer of wealth from the World War II generation to the boomers, but also because of the good economy, which is pumping up contributions. Remember, too, that charities are in many ways like small businesses -- they buy products and services and hire employees in much the same manner as a for-profit entity. People sometimes think nonprofit means no-profit -- but it just means the profits get poured back into the charity.
Inc.: Do for-profit companies that serve the charity market run the risk of appearing exploitative or inappropriately money hungry?
Palmer: Companies that try to charge large fees to charities or that pocket a big percentage of the donations they raise on a charity's behalf will definitely face image problems. At the same time, though charities have always had to be careful about how they manage their resources, and continue to be, for more than a decade many nonprofits have been looking to the business world to borrow ideas about how to become more effective and more efficient. They are comfortable making investments in products and services that can help them garner the resources they need to perform good works.
Inc.: Is online giving the Web's next "killer app"?
Palmer: Although everyone agrees that the Internet has the potential to revolutionize how people learn about charities and decide which ones to support, nobody knows how people will want to interact with charities online. Charities tell us they are being inundated by businesses promising to make them money, and many don't know how to sort out the available choices. In a Chronicle survey last fall we asked nonprofit executives about the issues that would shape charities in the new millennium, and technology came up repeatedly. While some see the promise, others worry about how technology can change the very personal relationships between charities and the people they serve -- as well as the people they depend on for financial support and volunteer time.
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