I’ve spent all of my career involved in the non-profit world. Everything from serving as a volunteer, staff, executive director or as a board member.

I also work a lot in the for-profit world. I’ve started a number of businesses. I consult to many ranging from start-ups to Fortune 500 companies.

I’ve observed that non-profits and for-profit organizations are far more alike than they are different.

In fact, large non-profits and large for-profits can be virtually indistinguishable from each other. They both can feel like large machines or bureaucracies.

Small non-profits and start-ups are both often characterized by extraordinary passion and vision. They often struggle with cash flow, systems and staffing.

But there are differences. And these differences offer rich opportunities for both to learn.

There are two areas where non-profits are more likely to excel and businesses may not. These two areas are what allow many non-profits, particularly charities, to accomplish so much often with very little in resources:

Non-profits tend to have a Clear Purpose and Engaged & Committed Staff. The second builds off the first.

For many years, I‘ve worked in non-profits where staff were highly qualified, motivated and effective. In fact, there was high competition for positions when they opened.

These staff were often competing for positions where they would volunteer their time or be paid a fraction of what they could earn elsewhere.

Meanwhile, many businesses struggle to attract the best employees. Once they have them, or even mediocre ones, they struggle to get good work out of them – let alone retain them.

Here is what these non-profits do that businesses can learn from:

1. Clear Purpose: I don’t know many business owners or CEO’s who are primarily driven by the desire to make more money. It just isn’t that common. In most cases, though, I find that business leaders aren’t clear about what it is that drives them.

Sometimes they’ll talk about legacy. Sometimes they’ll talk about enjoying the game of business. Sometimes they’ll talk about creating great workplaces for their employees.

In more candid moments, they might talk about trying to prove something to someone. Or fulfilling a personal ambition. Or just not knowing who they are without the job.

What sets many non-profits apart from businesses – is that most leaders in the non-profit world can quickly and easily tell you what drives them. That doesn’t mean that in more private moments, they don’t also talk about personal ambitions or fears.

But they actually are pursuing a purpose. This purpose is compelling and inspiring.

What makes this important?  A clear sense of purpose is able to infuse a workday with value and meaning. When a leader has a clear sense of purpose and especially when that purpose is used in recruitment, orientation and in guiding strategy they create powerful organizations.

People, usually, need to earn an income. However, people want to live lives of meaning.

Business leader: Discovering and articulating the compelling purpose that drives you and your organization is one of the best possible uses of your time. In fact, without it you are rowing against the tide.

Once you know what your purpose is, accept that one of your primary responsibilities is to keep communicating that purpose to your people – over and over. People leak. They get distracted. They forget. You need to weave purpose, values and meaning into nearly everything that is communicated.

You need to help people see how their individual roles directly contribute to achieving that purpose. That’s one of the most important and critical roles of leadership. To cheerlead the vision and purpose of the organization.

In both non-profits and businesses, many people work in supporting or administrative roles. Many people may struggle to feel like their work has a direct impact on achieving Purpose. As a leader, your ability to help them see the connection and to come to work seeing the value in what they are doing is transformative work.

A clear purpose actually makes management easier. By helping everyone understand the purpose and their role in creating that purpose – people and teams are able to engage in higher levels of self-management. They require less effort to keep on track. They are able to solve problems more easily on their own because, even in unknown territory, they know which direction they are supposed to head.

2. Engaged & Committed Staff: Having a Compelling Purpose is the first step towards engaging your staff and developing strong loyalties and commitment. Many, many businesses attempt to address staff recruitment or turnover through compensation packages. Additionally, the cost of turnover is one of the most expensive costs a workplace endures. Yet because it doesn’t directly show up on a financial statement – it isn’t acknowledged.

Consider this, every time an employee leaves there is lost training, institutional knowledge, lost opportunities and relationships, the recruitment and hiring costs, orientation and training costs and the months of getting up to speed. Estimates of these costs range from about 50% of annual pay for an entry level employee to over 150% of annual pay for executive or highly skilled professional positions.

It turns out, more pay is the easy, maybe even lazy answer. It is also not the most effective answer. People are more motivated by the following:

• A Clear Sense of Purpose
• The Ability to Respect and Feel Respected by Management
• The Ability to Enjoy Their Coworkers
• Opportunities for Personal Growth
• Work That Challenges Them

While it is true that if people can’t pay their bills, they will eventually go someplace else – it is more true that people want to enjoy and find meaning in their work.

Inevitably, despite any research I may quote to back this claim up, someone tries to argue. So, arguing manager, consider this – if your no barb “hook” to attract or retain an employee is compensation, then you need to accept that the people you do hire don’t really care about where they work. They don’t care about what they are doing. They only care about what you can pay them.

Here’s a fact, the average employee in America can get an approximate 15% raise just by quitting their job with you and going to work for someone else. It’s not likely that your raises are keeping up with the competition for new hires. You just need to hope that whomever you hired is too unmotivated to pay attention to other opportunities. Or that they are too unskilled in their work to be attractive to other recruiters.

When staff recruitment or turnover is an issue in an organization: The only times I’ve ever found that the advice to “increase pay” is the best advice is when:

1. I’m talking to a non-profit board who are hoping to find excellent, senior leaders who will take a full-time job for part time pay or as a volunteer.
2. I’m talking to a business that has an inequitable compensation system. The lack of fairness in pay will quickly kill motivation.

Now, I’m very much for well compensated staff. I deeply believe in taking care of people. But sometimes increasing a check or adding benefits is just lazy.

It’s easier than doing the deeper work of determining your purpose. Or changing your own attitudes towards staff and treating them with respect. Or dealing with toxic employees. Or allowing employees to take risks or investing in their growth. Or creating work that is challenging.

That’s it. Discover your Clear Purpose and do the right work to build Employee Engagement and Commitment. Do that and you’ll build highly motivated and loyal teams. That, on its own, may be your competitive advantage.