MILW 261

Randolph R. Ruiz · **Posted:** Mon Nov 16, 2009 5:24 pm

Non-profits are not businesses. Their primary mission is not profitability. While positive cash flow is absolutely necessary, maximizing profits at the expense of fulfilling public benefit objectives is antithetical to the reason non-profit status exists.

It is my understanding from reading this thread that money has not been "made" by the Friends of 261 beyond what has been necessary to maintain and restore their collection. I remember an earlier thread about NRM that called into question whether they may have slipped away from their primary mission by putting too much emphasis on their money-making role as an event venue at the expense of other aspects of the museum.

Dave · **Posted:** Mon Nov 16, 2009 6:03 pm

Respectfully disagree. A nonprofit not run as a business is soon out of business. Not all businesses exist for the sole purpose of providing a return for shareholders, the definition is a bit more broad, and the skills and practices involved in management of both are similar, if devoted to producing a slightly different result.

I'm also a bit troubled with the implication that as well run a nonprofit enterprise as 261 has been is in any way equated with "playing with trains". Quality and success have proven it to be much better and more than that description would imply.

FWIW, as an outsider with no dog in this fight, from what I have heard it seems NRM might be a trifle shortsighted - but until they or other insiders share more details, it is nothing but appearances based on too little data, and ought to be considered as such.

dave

Alexander D. Mitchell IV · **Posted:** Mon Nov 16, 2009 6:57 pm

Just for the record:

"Non-Profit" is only a tax status classification, NOT a business plan. Ignore the preceding sentence at your peril.

Randolph R. Ruiz · **Posted:** Mon Nov 16, 2009 7:13 pm

Please re-read my post. I suspect we are more in agreement than you think, but my point is that non-profits and businesses ARE different. Non-profits may need to be run LIKE businesses, but really they should be run like non-profits.

As I have mentioned from time to time here, there is a whole highly-developed world of non-profit administration that our little movement seems to be largely oblivious of. There have been numerous victimized grumblings here about how art museums and other cultural institutions are better supported, but these groups are run by people that know how to run a non-profit. These people do not pretend that they are operating a for-profit business that just happens to be constantly failing and dependent upon an all-volunteer labor force.

Dave · **Posted:** Mon Nov 16, 2009 8:06 pm

I agree, but I think given the amorphous comprehensions and expectations out there, we need to be careful about any implication that any nonprofit is not equally - if not more - dependent on good operating and financial standards and practices. It might just be my interpretation of a semantic difference, but the implication that a nonprofit is not a business seems to indiciate it doesn't need to be run like one. Even worse, conceived and developed as one.

In my mind businesses include nonprofits, clubs, societies, public sector agencies and the like as well as private sector entities devoted to maximizing return on investment. My sense is you interpret the term "business" much more narrowly as profit centered private sector entities alone. Since closing my business to become a corporate drone, I have been made more aware of the lack of any larger awareness of enterpreneurial realities among other worker bees - and we do tend to be the average membership in nonprofit preservation organizations, so it is critical to try to raise the bar a bit.

dave

dinwitty · **Joined:** Wed Oct 22, 2008 8:18 pm **Posts:** 2226

co614 wrote:

Seems to me that the bottom line here is that the NRM needs to come to its senses and wake up and smell the coffee!!

As one who has paid the bills and walked the walk please believe me when I tell you that keeping the 261 in active mainline service is most definitely a labor of love and one that will only happen if the Sandberg family is willing to continue to subsidize its operation. Anyone who thinks that a mainline steam operation can be " profitable" doesn't understand the realities.

I for one can certainly understand why Steve Sandberg and his family are unwilling to sink the considerable funds needed to pay for the 261's FRA workup without a reasonable long term committment from the NRM. I must admit that I fail to understand the museum's decision to play hardball with the Sandbergs as they've already got a barn full of "stuffed&mounted" iron and unless they come to their senses soon they'll just have another dead display piece to find room for.

Seems to me if the NRM only got a dollar a year plus all the good PR and marketing exposure they get from the 261 being alive and a "roaming goodwill ambassador" they'd be far ahead of just having another display piece???

I must be missing something in this equation???

Anyway, there's certainly no shortage of other mainline capable machines ( some already dressed and looking for a party to go to!!!) that would love to be adopted by a wealthy sugar-daddy,so if I were the Sandberg's I'd tell the folks in Green Bay to fish or cut bait and be quick about it!!

Ross Rowland

If they got only 1 dollar on the lease, if they have a gift shop with plenty of paraphenalia they made plenty on the publicity.

NKP 765 is all roller bearing except for one or 2 of the trailing truck wheel axles. The side rods are friction. 763 would be similar. PM 1225 I recall had friction on the lead pilot.

If anything have a trainfest like Owosso to raise money for 261.
Surely 765 fresh from a new restoration can handle trips.
Or have 765 run some excursions in the name for 261 restoration efforts.
We all gotta work together to other groups.

Since 611 and 1218 are idle I wonder how much is needed to bring them to service since NS quit their steam program.

superheater · **Joined:** Sun Aug 22, 2004 11:54 pm **Posts:** 2605

"Non-profits are not businesses. Their primary mission is not profitability. While positive cash flow is absolutely necessary, maximizing profits at the expense of fulfilling public benefit objectives is antithetical to the reason non-profit status exists."

Once again, there is no such thing as a "non-profit". Its a horrible misnomer. The principal difference between a TAX-EXEMPT CHARITABLE ORGANIZATION and typical for INDIVIDUAL profit enterprise is twofold. And yes, it is a business.

1.) No part of the profit "inures" to the benefit of individuals

2.) They have an exempt purpose.

No. 2 limits the scope of the activities, but if you aren't attempting to maximize the profit of your organization, you are kidding yourself. There's a whole bunch of tax-exempts that are on the brink of insolvency because their business model consists primarily of revenue obtained from gratutitious transfers. For human service organizations, there's little possibility of a commercial exchange.

With the typical RR charity, there's plenty of opportunity to maximize your profits within the scope of your exempt purpose.

Alexander D. Mitchell IV · **Posted:** Tue Nov 17, 2009 12:32 am

"Non-profits are not businesses. Their primary mission is not profitability. While positive cash flow is absolutely necessary, maximizing profits at the expense of fulfilling public benefit objectives is antithetical to the reason non-profit status exists."

Methinks someone is badly confusing "profits" with "revenue."

The other place where people get confused is forgetting that it is indeed possible to be paid for running a non-profit enterprise. If a zoo, for example, doesn't pay keepers and the administration of animal care and feeding, things go to heck very quickly, and I would never entrust the care of such an enterprise to an all-volunteer force. I actually left one non-profit because they insist that volunteers can run it, in spite of the fact that the proper administration of the corporation has become a full-time job if done properly, and they have just about run out of naive suckers to take one-year terms.