A Business Guru's Advice to Nonprofit Groups

MANAGING THE NONPROFIT ORGANIZATION: PRACTICES AND PRINCIPLES. By Peter F. Drucker, New York: Harper Collins, 235 pp., $22.95 WHEN Peter F. Drucker's first book was published in 1939, the Hindi word ``guru'' had yet to become a popular Americanism. Now, 51 years and 23 books later, the Vienna-born Drucker regularly finds himself described with the word - especially by students of business principles.

That's no surprise. Drucker, after all, pretty much founded modern management studies. He gave us the concept of ``management by objective.'' He early called for management by teams rather than individuals. Back when ``Made in Japan'' was still the hallmark of cheap exports, he foresaw the economic potential of Japanese business.

Still highly popular on the conference circuit - where he typically lectures without notes from a casual half-sitting perch on the edge of a table - he spellbinds audiences with dry wit, deft turns of phrase, and a capacious memory for details.

And if, in his maturity, he is turning his attention from the for-profit to the nonprofit sector, he is only doing what so many business executives themselves do in later years: retiring from the relatively ordered world of top dogs and bottom lines to engage in the heady, egalitarian, and unpredictable swirl of local volunteer activity.

What he finds is a sector far more muscular than many realize. ``With every second American adult serving as a volunteer in the nonprofit sector and spending at least three hours a week in nonprofit work,'' he writes, ``the nonprofits are America's largest `employer.'''

Little wonder, then, that he finds this a fertile field for analysis. Never mind that this book is essentially a print version of ``The Nonprofit Drucker,'' a series of 25 one-hour audio cassettes issued in 1989. Never mind that of the 23 interviews with nonprofit leaders and experts on the tapes, only nine appear here. Never mind that he overuses a handful of examples, including hospitals, the Girl Scouts, and an art museum. Never mind that he sometimes fuzzes the issues - failing to explain why American nonprofit activity has held steady at 2 to 3 percent of gross national product since the end of World War II, while medical care and education (much of which are in the nonprofit sector) have exploded in that same period. Never mind that, when Drucker thinks of nonprofits, he envisions the established, many-tentacled national organizations rather than the tiny volunteer-led operations springing up everywhere.

Never mind, I say, because what he says is still pithy and germane. As president of a small new nonprofit, I find this book a trove of practical advice. Again and again, he spots the gremlins lurking in the organizational penumbra and warns against them.

Don't make the mission statement into ``a kind of hero sandwich of good intentions,'' he notes, adding that ``it has to be simple and clear.'' Build the organization ``around information and communication instead of around hierarchy.'' Don't, as chief executive, ``try to hide things from the board - since, as Dr. David Hubbard notes in one of the warm and expansive interviews laced throughout this book, ``There is nobody clever enough to outsmart a board over any length of time and succeed.''

That's all sound advice for nonprofits and for-profits alike. But the genius of this book lies in Drucker's ability to distinguish between the two. The principal difference, he notes, is the source of money: Businesses sell, while nonprofits must fund-raise. That leads to numerous other differences: in the number of constituencies served (few for businesses, many for nonprofits), in the goals (the successful nonprofit ``wants the end user to be not a user but a doer''), and in the measurement of performance (``What Is the Bottom Line,'' Drucker asks in a provocative chapter title, ``When There Is No `Bottom Line'?'').

Despite the business-vs.-nonprofit distinctions, there are enough similarities to make Drucker's business-like prescriptions highly relevant. At bottom, this is a book about leadership - and about such concepts as trust, delegation, standard-setting, and decision-making.