They found that for-profit managers are not better managers than nonprofit practitioners, but they are better supported managers. However, while the business marketplace rewards organizational capacity, the nonprofit environment starves it, Letts' group concluded. Indifference, even antagonism, to the development of organizational capacity has roots running deep in the culture of the sector. Foundations generally do not contribute to building strong nonprofits. Foundations are as likely to be driven by insuring that the required five percent payout is achieved as by rewarding excellent results in their grantmaking.
Time horizons are longer in business financing.
Funders behave as if the world will be saved in 36 months or less, but business ventures understand that five to seven years are required to create something of value. And firms financing business ventures close closely with those in which they're investing. However, despite much talk about partnerships, foundations prefer to keep some distance from nonprofits. The nature of the relationship after the grant is made is one of reports, oversight and evaluation. Nonprofits are well-known for delivering services.