Non-Profit Contradictions   

(This article is provided courtesy of the author Akhilesh Gulati)

I have been holding quarterly fireside chats with my fellow alums.  These alums work in different industries, including non-profit organizations.  One of the alums was from a non-profit org, and the conversation drifted towards the use of funds and the challenges faced by such organizations.  This was especially so since many of us supported different charities and were, at the same time, concerned with the percentage of the donations that went to the actual beneficiary.  After all, we have all read about the ridiculous amounts of overhead some of the charities have.

Suzie (the alum who worked with a non-profit) agreed that overhead is something everyone is concerned with.  She also shared that overhead comprised of management and staff salaries, distribution costs, advertising and collections, etc. For example, charities were always torn between hiring low salaried management (and not raising enough funds) versus hiring top-notch people with competitive salaries (and raising a lot more to fund their cause).  This was one of the challenges that fed the overhead debate within non-profit organizations.  Further discussion with Suzie revealed that her organization assumed that good staff cost more than “ordinary” staff, and good staff can raise more money.   So the question boiled down to what makes “good” people good, and whether that can be done with less money.

In my TRIZ mind, I was thinking that we should try to define this as a contradiction and see what kind of solutions we come up with.  So, later, I shared the issue with my colleagues and at one of our Coffee & TRIZ sessions.

Part of our discussion hovered around: is it a technical contradiction or a physical contradiction?

Treating this as a physical contradiction, we stated Suzie’s issue as:

When dealing with a known physical contradiction, we could use one of the four principles could to overcome this type of contradiction:

  • Separation of contradictory properties in time
  • Separation of contradictory properties in space
  • Separation between the whole system and its parts (but letting the contradictions co-exist)
  • Separation based on different conditions; solve in sub-system or super-system

A key underlying principles of TRIZ is this:
Somebody someplace has already solved the problem (or one similar to it).  Creativity is now finding that solution and adapting it to your particular situation.

For this issue, the ‘Separation in time’ principle came into play right away.  I had been with the Rotary Club for many years and recalled that Rotary Club International invests all new donations in an endowment for three years, and then uses the interest to cover overhead.  This way they are able to use 100% of the donations toward the cause.

Suzie’s organization could follow the Rotary Club example, hire top-notch people, and pay salaries from interest earned through the endowment.  There is a separation on when the funds are received and when they are used.  Suzie liked this idea decided to propose it to her executive team.

About: Akhilesh Gulati

 Akhilesh Gulati is a Principal of Pivot Management Consultants helping companies implement change strategies through Lean, Six Sigma and TRIZ.  He was also the CEO of PivotAdapt, a Data Analytics company that he rolled into Pivot Management Consultants.  He has over 25 years of experience in operations and process improvement, design, lean, Six Sigma, strategic planning, and TRIZ (structured innovation) training and consulting.

 Akhilesh has been active with ASQ for over 25 years, is a past chair of Section 702 and most of us know him through his presentations to our Section and his Radical Thinking articles.  Akhilesh holds M.S. in Naval Architecture and Marine Engineering from the University of Michigan, Ann Arbor, and an MBA from UCLA.

 Learn more about Akhilesh Gulati at