A New Kind of Nonprofit Leader

In his New York Times column this week Bob Herbert strongly criticized America and its leaders for not stepping up to the plate to guide us through these very troubling times.  As he put it:

As a nation, we are becoming more and more accustomed to a sense of helplessness. We no longer rise to the great challenges before us. It’s not just that we can’t plug the oil leak, which is the perfect metaphor for what we’ve become. We can’t seem to do much of anything.

Although his column is perhaps a bit too bleak, he does make the point that we have forgotten how to lead ourselves out of a mess, and the messes are getting larger and larger.

The messes of the American system are often cleaned up by the nonprofit sector. Nonprofits are usually borne out of some disequilibrium that the market creates (poverty, homelessness, poor education, lack of healthcare).

However, lately the messes have been too much for even the nonprofit sector to bear. And at the same time a deep recession, government’s increasing off-loading of social services to the sector, donors growing desire for measurement, and a more wired world are all combining to demand dramatic changes to how nonprofits operate. As a result, nonprofit leaders need to adapt.

The day has come for a new kind of nonprofit leader, one who has the confidence, ability, foresight, energy, and strength of will to really lead. This new nonprofit leader:

• Embraces the idea of a networked nonprofit and is willing and able to break down the walls of control and risk aversion and let the world in as fully engaged partners in the work they are doing.
• Works toward completely integrating money into the impact they are trying to create, understanding that big plans for impact are not enough, you also must finance them.
• Realizes that it is no longer enough to just “do good work.” They must find a way to measure, in some form, the work that they are doing and be able to demonstrate results to the external market.
• Looks to the social entrepreneurship movement for inspiration and new ideas for accelerating social impact.
• Recognizes the importance of strong infrastructure and works to recruit and keep top talent and create effective technology and systems by fundraising for those real operating costs every year.
• Refuses to play nice with funders who want to undermine the mission and impact of the organization, competitors who are providing an inferior service, and board members who won’t contribute.
• Maintains an external view on how their organization can continue to add value in the outside marketplace of community problems.
• Constantly forces themselves, and their high-performing team of board, staff, funders and volunteers to ask hard questions, make bold goals, push themselves harder, and deliver more and more impact.

It’s a tall order, but true leadership always is. We no longer have the luxury of so-so leaders. These times demand confident, capable, engaging leaders who are a beacon to a society whose mounting problems are overwhelming at best.

Photo Credit: 3n

Tags: Bob Herbert, networked nonprofit, nonprofit innovation, nonprofit leadership

Let’s Take a Step Back in the Outcomes Debate

There is a growing discussion among social impact organizations and those who fund them about how to measure impact.  It is indeed a very slippery endeavor.

Mario Marino, Chairman of Venture Philanthropy Partners (a venture philanthropy fund in Washington D.C. that makes growth capital investments in nonprofits) has been encouraging nonprofits to measure outcomes for years.  Indeed one of the fundamental characteristics of venture philanthropy is a reliance on metrics and outcomes for investment to happen.  He recently wrote a post arguing that he is “increasingly worried that the vast majority of funders and nonprofits are achieving, at best, marginal benefit from their efforts to implement outcomes thinking.”  He argues that in an zealous pursuit of metrics we have left common sense and “softer” impact behind and encouraged nonprofits to move away from the impact they were working towards.

To add further confusion to the outcome measurement discussion, the Gates Foundation’s Melinda Tuan studied 8 approaches to measuring cost vs. social impact, or the value that nonprofit organizations create versus the cost of their activities.  The results of the study were disheartening; none of the approaches they studied was a magic bullet, all had significant drawbacks, which led them to conclude: “Integrated cost approaches to measuring and/or estimating social value are still in the nascent stages of development due to the lack of maturity in the field of social program evaluation.”

And there are other camps working towards outcome measurement, like those debating about whether randomized control trials (a research methodology where a random group of program participants is tracked and compared to a random group of cohorts who did not participate in the program) are feasible for nonprofits. And on the social business side, the GIIN (Global Impact Investing Network) is developing standards for measuring and communicating the social impact of investments known as The Impact Reporting and Investment Standards (IRIS).  And that’s just a start.

This whole social impact measurement endeavor is incredibly important because if we can figure out a way to measure which social change efforts work, and which don’t, we can allocate resources accordingly and, in theory, get closer to solutions to social problems.

But I think we need to first take a step back.  As is so often the case in efforts to build nonprofit capacity, effectiveness and infrastructure (including, in this case, the ability of nonprofits to evaluate their work) the focus is on the largest, most resourced nonprofit organizations.  Let’s remember that more than 80% of nonprofit organizations have budgets under $1 million (see the Nonprofit Almanac).  Budgets that small leave very little room for funds to support randomized control trials or other kinds of outcome measurements.

But an even bigger roadblock is the fact that many nonprofit organizations have not articulated their theory of change, or their logic model.  Many nonprofit organizations are doing good work, but they don’t necessarily have an articulated strategy around that good work.  A logic model helps an organization understand and articulate how they believe that they translate resources (inputs) into social impact, or change in a community.  This understanding allows the organization to better articulate (to potential funders, volunteers, supporters, partners), and create strategy around, their work.  A potential logic model for an English as a Second Language after-school program could be as follows:

One of the first steps Social Velocity undertakes with clients who want to increase organization capacity, sustainability, revenue, growth, or really any kind of progress, is to create a logic model with the organization.  The majority of nonprofits that I encounter don’t have an articulated logic model or theory of change.  It may seem like an academic exercise, but I would argue that it is absolutely critical to just about anything a nonprofit does.  In order to understand their place in the community, the value that their work adds, how additional inputs (like funding) can increase impact, and their strategy for delivering services, they need to articulate this process.

But the larger debate about outcome measurement ignores the fact that the majority of nonprofit organizations have not completed step 1 in outcome measurement: articulating a strategy for using resources to create outcomes.  Once this is articulated, we can talk about how to measure whether that strategy is actually coming to fruition.

Tags: Gates Foundation, GIIN, IRIS, logic model, Mario Marino, Melinda Tuan, Nonprofit Almanac, outcomes, randomized control trials, social impact, Social Velocity, theory of change, Venture Philanthropy, Venture Philanthropy Partners