This approach has an actual name in my industry. “The Nonprofit Starvation Cycle.”
The basic premise is that in a very resource constrained environment, there’s never enough money to invest in infrastructure and the continuous improvement of process and product. This affects most vendors that serve the nonprofit market exclusively. The price you can charge your customers lets you earn a modest profit and pay your employees, but eventually your chronic lack of resources to invest in your people and product kills your business when a fresh product with fresh funding comes onto the market. The cycle then repeats as that new vendor is unable to make the investments needed to keep up with the broader industry state of the art.
So file this under one of those things that sounds nice in theory but kills your business as competitors eat your lunch in practice.
The basic premise is that in a very resource constrained environment, there’s never enough money to invest in infrastructure and the continuous improvement of process and product. This affects most vendors that serve the nonprofit market exclusively. The price you can charge your customers lets you earn a modest profit and pay your employees, but eventually your chronic lack of resources to invest in your people and product kills your business when a fresh product with fresh funding comes onto the market. The cycle then repeats as that new vendor is unable to make the investments needed to keep up with the broader industry state of the art.
So file this under one of those things that sounds nice in theory but kills your business as competitors eat your lunch in practice.