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Planning

Investing in Stronger Nonprofits: An Interview with Linda Baker

linda-baker-524x643In this month’s Social Velocity interview, I’m talking with Linda Baker. Linda is the Director of Organizational Effectiveness at the David and Lucile Packard Foundation.

In this role, she leads the Organizational Effectiveness (OE) team as they invest in grantees to build their core strengths and maximize their impact. Through these investments, the OE team aims to build healthier, better connected organizations and networks ready to bring about greater change in the areas the foundation cares most about. The OE team works in collaboration with the four program grantmaking areas of the foundation, and also engages with the broader field on capacity building and good philanthropic practice.

Linda has also served the foundation as program officer in the Local Grantmaking and Children, Families and Communities programs, and as an analyst and associate editor in the Center for the Future of Children.

If you want to read interviews with other social changemakers in the Social Velocity interview series go here.

Nell: You recently took over leadership of the Packard Foundation’s Organizational Effectiveness program. What are your plans for the future of this program? Where do you see opportunities for change or growth in the work Packard does to build stronger nonprofits?

Linda: It is an incredible honor to lead the Organizational Effectiveness (OE) team. I’m proud to be a part of a foundation that actively embraces a commitment to effectiveness by helping our nonprofits partners strengthen their fundamentals so they can better achieve their missions.

The best capacity-building grantmaking happens in open and authentic conversation with nonprofits. At the Packard Foundation, this means that changes in OE funding are driven through continuous listening to our nonprofit colleagues about where they are strong and where they would like to grow – as leaders, organizations, and networks. While many of the funding requests remain similar to the past (like support for strategic planning and fund development planning), a few topics have recently become more prevalent. For example, as nonprofits and leaders focus on movement building and their ability to be flexible and strategic in an ever-changing environment, we are hearing more requests for funding on leadership development and diversity, equity and inclusion. We have also seen an increase in interest in projects that focus on nonprofits better understanding their financial situation and increasing their financial resilience.

I’m also excited about our participation in the Fund for Shared Insight, a funder collaborative that supports nonprofits in seeking systematic and benchmarkable feedback from the people they seek to help. This collaborative believes that foundations will be more effective and make an even bigger difference in the world if we are more open—if we share what we are learning and are open to what others want to share with us, including our nonprofit partners and the people we seek to help. It is early days, but the possibilities are promising.

Nell: The Packard Foundation is way ahead of the pack in terms of actively investing in stronger nonprofit organizations. What do you think holds other foundations back from providing capacity building support (like planning, leadership development, evaluation, etc.)? And what can be done to get more foundations funding in these areas?

Linda: This work is incredibly important. People are the engine of change, and they need appropriate training, tools and support to get their work done. The good news is that momentum seems to be building. Last year we talked with twenty foundations who reached out to us on this work—and we are always happy to provide insight to our peers in this way. I’m also encouraged by the standing-room-only crowds at Grantmakers for Effective Organizations (GEO) conferences, which often focus directly on the importance of capacity building.

An increasing number of our peers have embraced this approach to grantmaking. Both the Hewlett Foundation and the Meyer Foundation have OE programs similar to ours. The Ford Foundation’s BUILD program works to support institutional strengthening in a big way. Many others support the capacity of leaders – we particularly admire the work of the Haas Jr. Fund in this area.

JPMorgan Chase and the Aspen Institute recently issued a report discussing roles and opportunities for business in nonprofit capacity building. And the 2016 GEO publication on capacity building is full of examples of foundations providing capacity building support to nonprofit partners.

For any foundations on the fence, we will soon be releasing our 2016 Grantee Perception Report data that shows that our grantees who receive OE support rate the foundation as more responsive and a better partner. Data from our evaluation last year shows that one to two years after their OE support ended, nearly 80% of grantees reported significant increases in capacity and 90% reported continued investments in capacity building a year after grant completion. We are confident that these investments build lasting change.

Another bright spot is the feedback work of the Fund for Shared Insight that I mentioned earlier, which is investing in stronger nonprofit organizations through experimenting with investments in feedback loops. Shared Insight provides grants to nonprofit organizations to encourage and incorporate feedback from the people we seek to help; understand the connection between feedback and better results; foster more openness between and among foundations and grantees; and share what we learn.

Nell: You have been actively involved in the Real Costs effort to get funders and nonprofits to understand and articulate the full costs (program, operating, working capital, fixed assets, reserves, debt) of the work nonprofits do. How do you see that movement progressing? Are minds changing? Are we, or when will we, reach a critical mass of nonprofits and funders embracing full costs?

Linda: As you and your readers know, this question is fundamentally about the relationship between funders and nonprofits. Nonprofits that have trusting relationships with their funders and an understanding of what it takes to run their organization can talk with funders about what it truly costs to deliver outcomes over the long term. In response, funders with a nuanced understanding of a nonprofit’s financial requirements will be able to structure grants more effectively to achieve those outcomes.

The move for funders to understand the financial resources nonprofits require for impact is gaining steam. I’ve been encouraged by the level of interest and conversation in California alone, and I know conversations are happening nationally too. The Real Cost Project in California is gearing up for the next phase, and we are pleased to be supporting that work and to be thinking about these ideas at the Packard Foundation. I am hopeful that California funders will continue to embrace the conversation and consider how funders can strip away unnecessary processes and promote transparent dialogue about how to best support the work of nonprofits.

One part of the challenge is that we are going up against misguided notions that good nonprofits should not invest in their infrastructure or their people. These ideas are embedded in our culture, and it takes time to change perspectives. If we can get a critical mass of foundations to join the conversation and consider what they can do to improve, and ensure that nonprofits have the tools to understand the financial requirements needed to get to outcomes, that will be progress.

Nell: You and your team at Packard OE have created a great Organizational Effectiveness Knowledge Center website with a deep set of resources for building stronger nonprofit organizations. Foundations are sometimes hesitant to offer resources (beyond money) to nonprofits, but you have made a conscious choice to move in this direction. Why and what could other foundations learn from your experiences here?

Linda: Thank you! We created the Knowledge Center to share our perspective and resources about improving organizational and network effectiveness with the goal of helping nonprofits, our consulting partners, and other funders make their work even stronger. The Knowledge Center is a place for us to share our perspective on a number of topics from network development to leadership and coaching to evaluation, and discuss the latest in the field from conferences and publications.

In addition to providing grantmaking support, we believe that sharing this information will increase our impact on the nonprofit sector and advance the capacity building field. Change does not happen in silos, and we don’t want our nonprofit partners to spend time reinventing the wheel. So, we decided to create a space to exchange what we’re learning and the resources available to help support organizations in this work.

We hope that the Knowledge Center will be a place to exchange learning and reflections, and we encourage users to engage with us by commenting on your experience with these topics or submitting resources that you would like us to consider sharing. And, while you’re there, leave us a comment to let us know what you think of the Knowledge Center and how we can improve.

Photo Credit: David and Lucile Packard Foundation

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Using Networks for Social Change in a New Era

social change networksAmid all of the uncertainty in the wake of the election, one thing is sure. In order to survive and thrive, nonprofit leaders cannot stick their heads in the sand. As others have already enumerated, there is much to be done to prepare for the road ahead — from ensuring your board is actively engaged, to bolstering your partnership with funders, to growing (or launching) your advocacy efforts.

As part of all of this, it is critical that nonprofit leaders not go it alone. They must understand and harness the power of networks in order to grow their ability to influence the future.

As Jane Wei-Skillern and Sonia Marciano put it, networked nonprofits

“see themselves as nodes within a constellation of equal, interconnected partners, rather than as hubs at the center of their nonprofit universes. Because of the unrestricted and frequent communication between their different nodes, networked nonprofits are better positioned to develop more holistic, coordinated, and realistic solutions to social issues than are traditional nonprofit hubs.”

And now — more than ever — we need a social change sector that is coordinated and offers real solutions to the many social challenges we face.

But what does that look like? How does a single nonprofit leader analyze and begin to grow her organization’s networks?

She must work with board and staff to analyze their current and potential networks and create a plan for growth, by asking these questions:

Who Else Is Working on Similar Social Issues?
What other entities are working on similar issue areas? Are you connected to them? In a significant way? If not, make a list and start getting your board and staff to forge alliances, where possible. And ask each of these entities where else you should be connected.

Who Are the Leaders in Other Sectors?
Beyond just the nonprofit space, are there key for-profit industries or local, state or federal government entities that impact your set of social issues? Are you connected to these networks in a significant way? If not, get busy.

Who Are the Policymakers Impacting Your Issue Area?
To the earlier point about moving into the advocacy space (which more and more social change experts are encouraging nonprofits to do), think about local, state or federal policies that might impact your work. Who are the policymakers you should be talking to in order to make sure they fully understand the issues and their impact? Do your networks include these policymakers? If not, get to work.

What Expertise Do We Lack?
A single organization has only a very limited list of core competencies, but you will need a lot of varied expertise to create the social change you seek. So where are you lacking? And who out there (people, organizations) have that expertise? Find them and figure out how you can partner in a significant way to move forward.

Who Are the Influencers?
What about people who are not represented above, but who have the ear of those who are? Who are the key influencers, and are you connected to them? If not, again make a list and start attacking it.

 

Once you know all of the people and groups to which you want your organization connected, start assigning parts out to your board and staff. Set up meetings to explore how you can start partnering towards bigger social change.

Because we need social change leaders who are not frightened by the looming future, but rather aligned and empowered to face it together.

If you want to learn more about building networks for social change, read my interviews with network experts Anna MuoioJane Wei-Skillern, and Sean Thomas-Breitfeld and check out the New Network Leader website.

Photo Credit: Martin Grandjean

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Nonprofits Must Use Their Power For What Is Right: An Interview With Ruth McCambridge

Ruth Mccambridge

In this month’s Social Velocity interview, I’m talking with Ruth McCambridge.

Ruth is Editor in Chief of the Nonprofit Quarterly. Her background includes forty-five years of experience in nonprofits, primarily in organizations that mix grassroots community work with policy change. Beginning in the mid-1980s, Ruth spent a decade at The Boston Foundation, developing and implementing capacity building programs and advocating for grantmaking attention to constituent involvement.

If you want to read interviews with other social changemakers in the Social Velocity interview series go here.

Nell: The Nonprofit Quarterly sometimes serves as a watchdog for the nonprofit sector. For example, shortly before his death last year, Rick Cohen took the nonprofit sector to task for not standing up against anti-refugee legislation. But in some ways the sector’s hands are tied because of real or perceived rules against too much political activity. What is (or should be) the nonprofit sector’s role amid an increasingly polarized, gridlocked political system?

Ruth: The nonprofit sector’s hands are by no means tied and pretty much everyone knows that. We who work in 501(c) 3s do have to avoid partisan political activity and be a little careful when it comes to direct lobbying, but this leaves a whole world of political activity in which nonprofits can be and are involved, and there are plenty of powerful examples of political activism by nonprofits.

Look at the way that planned Planned Parenthood Action (a 501(c)4) has mobilized around this election season. Four years ago, in fact, the Sunlight Foundation found it had the highest ROI of any electorally focused PAC.

This response you speak of, of not being allowed to be political is, it seems to me, a convenient and patently obvious cop-out. It’s not that nonprofits do not know they can be involved in these kinds of issues, it is that they are employing a facile excuse for not doing what is right.

What is perhaps most disturbing about this dynamic – what most exposes the true nature of the excuse – is the tendency of some nonprofit infrastructure groups to mobilize nonprofits only on the most institutionally self-interested causes, resisting any limitations on fundraising, for instance. The fact that these campaigns are launched in favor of refugee rights to a safe harbor is not attractive to those who expect integrity from the sector.

Of course, there are issues that combine long term institutional self-interest with the interests of communities – for instance, recently a few statewide nonprofit networks have stood up for a living wage requirement and have accompanied that with work on rate adjustments, but in general, nonprofits, specifically those which are not expressly organized around advocacy, need to consider how to use their institutional power for what is right and stop playing coy in the face of current intense political scrums around issues of basic human and civil rights.

But let’s get back to the NPQ as watchdog idea. We have been hearing this increasingly over the past few years, but we have always tried to afflict the comfortable so maybe our voice has just become louder. We have many more readers than this time last year – I know that!

Nell: The mainstream media is sometimes criticized for holding the nonprofit sector to an unfair standard compared to the private sector. Do you agree with that criticism, or is the nonprofit sector not analyzed enough?

Ruth: That unfair standard coin has two sides. The nonprofit sector is more trusted by the public than government or business and that means that people expect more from us in terms of consistency of ethics. When we violate those higher expectations – yes – we may look like we are being held to a higher standard because the contrast between what they want and expect to see from us and what we give them is sometimes so starkly disappointing. This, by the way, causes some of the obsession with executive salaries that are seen as overly high. There is a sensitivity to wage justice in the context of mission and other compensation of staff that is easy to play on because people just expect us to act from the highest possible ethical position.

Nell: As a journalist, what is your take on the state of journalism and its role in democracy given the 30% decline in the number of journalists over the last decade. What will become of journalism and its role in democracy? And what do you make of the emerging breed of nonprofit newsrooms?

Ruth: Journalism is a changing form, and I would be talking far above my pay grade to suggest that I knew exactly what it was evolving toward, but it has always been clear to me that the role of journalism is central to democracy – to the ability of a populace to act in an informed manner and thus it is as important to democracy as the right to associate, which is at the basis of our nonprofit sector.

In a way, this commonality of purpose links the two, and so it is no surprise that there are now more nonprofit journalism outlets springing up – entities that are not placing profit above mission. That makes sense.

Just as interesting are the conversations around how people choose who can be trusted to inform them and on what basis, and who is going to pay for the long term investigative journalism that always has to be central to the mix, and what part open data plays in breaking stories. Other interesting trends are the evolution of citizen journalism, collaborative journalism and niche journalism. It is unendingly interesting.

Nell: In your interview last Spring with Douglas Rushkoff he had some very interesting things to say, one of which was that the nonprofit business model is superior because it more equitably distributes wealth than the for-profit model. Do you agree with his assessment, or what is your take?

If we do not want to encourage the pillaging of the earth and its peoples by the few – I guess I do agree.

Photo Credit: Nonprofit Quarterly

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Moving Toward a Network Mindset: An Interview with Jane Wei-Skillern

jane wei-skillernIn this month’s Social Velocity interview, I’m talking with Jane Wei-Skillern.

Jane is the co-author of the groundbreaking 2008 Stanford Social Innovation Review article, “The Networked Nonprofit,” and a leading researcher on networks for social change. She is a senior fellow at the Center for Social Sector Leadership at the University of California Berkeley’s Haas School of Business and has also served on the faculties of the London, Harvard, and Stanford Business Schools.  For the past 15 years, her research has focused on high impact nonprofit networks, network leadership and network cultures.

You can read other interviews with social changemakers in the Social Velocity interview series here.

Nell: Jane, you and Sonia Marciano arguably coined the term “networked nonprofit” with your 2008 Stanford Social Innovation Review article of the same name. But is the idea of creating and using networks to create social change necessarily new to the space? How is a networked nonprofit different now than in the past, or what has changed?

Jane: In our article, we were most interested in the ways in which leaders and organizations catalyzed and engaged in collaborations successfully. Thus, the focus in the article was much more on the culture, or the norms and values, of what makes collaborations succeed, rather than a strict definition or structure of what collaborations should look like.

The concept of partnerships, collaboration, alliances, networks, or any number of other terms we could use, are of course nothing new in the nonprofit sector. In fact, we are not particular about the terminology that is used to describe collaborative efforts or whether they choose to use the term “networked nonprofit” at all. These lessons were drawn from detailed case studies of successful networks, many of which had been operating for years or decades before we studied them as researchers.

At the same time, we used the term “networked nonprofit” to describe a particular approach to collaboration, one that was oriented around social impact above all else, that emerged from the bottom up by community members in the field, as a way to address problems more effectively, rather than collaboration for collaboration’s sake. The networks were unique in that while they might have been catalyzed by a few instrumental actors initially, all participants worked in true partnership, as peers and equals to drive toward field level impact.

Consequently, they were able to achieve significant commitment, investment and support from participants, and generate leverage on resources and capacity, to achieve mission impact much more efficiently, effectively, and sustainably. It is this experience and wisdom about what was working well in the field that we wanted to bring attention to, especially at a time when so many in the field were struggling to scale impact through individual social entrepreneurs/social enterprises by proliferating program/organization innovations, building organizational capacity, scale, and brands.

Nell: How is the concept of a network different than or related to the concept of a social movement, like BlackLivesMatter? Are social movements the same or different than networks? 

Jane: I believe that the concepts that enable social movements to succeed are very similar to those that would enable networked nonprofits to succeed.  Social Movement scholars and analysts have highlighted four stages of successful social movements which were succinctly described in this article. These four stages are:

  1. A community forms around a common goal
  2. The community mobilizes resources
  3. The community finds solutions (what I call “fourth options”)
  4. The movement is accepted by (or actually replaces) the establishment

In this respect, networked nonprofits are very similar. The network emerges around a common goal, rather than a particular program or organizational model. The community mobilizes the resources from throughout the network, and based on existing relationships in the community.  The solution is emergent and comes from the community members themselves, rather than being pushed from the top down. And finally, once a network is up and running and proves itself to be effective, it becomes the primary vehicle for change, rather than the individual organizations themselves.

Nell: You recently launched a new site offering resources to those interested in becoming a networked leader. What is your goal with this new site?

Jane: The stated mission of the website is: “To champion network leaders, and the networks that they serve, to nurture change on the challenges that dwarf us all.” It’s an interesting story about how we came to create this website together.

In early 2016, I had the opportunity to work with Children and Nature Network to share my research on network leadership through a series of webinars with their network members. Through this project I got to know Amy Pertschuk, co-founder of Children and Nature Network, who found the ideas so compelling that she offered her services pro bono to help develop a web site to share resources.

Initially, Amy asked if we should create a domain name focused on me and my research. I immediately realized that that would be too limiting. In order to achieve leveraged and scalable impact through this website, I absolutely needed to practice what I preach and make the site much less about me and much more about championing network leaders and the networks of which they are a part.

It also made sense to reach out to some of my most inspiring and trusted colleagues who have deep experience leading, developing, and writing about networks themselves to develop the website jointly. We have all worked to build this site to support experienced and aspiring network leaders. The resources on the site have been collected and curated by a community of practitioners and network supporters working to increase the impact of social sector leaders and organizations by promoting the principles of successful networks.

Nell: Is the networked approach right for every nonprofit, or does it apply better to certain types of leaders or organizations? And how can a nonprofit leader interested in this approach move forward with it?

Jane: I like that you emphasize that it is an approach rather than a structure or model. Sometimes people think that they need to reorganize or restructure in order to be a network. Instead, I view it as a mindset and leadership approach that can be used by people in all types of organizations, whether in the private, public, or nonprofit sectors. Though I do believe that it is particularly relevant in the social sectors where the primary objective is, or should be, to generate social value that is not owned or captured by any single entity, in contrast to private sector organizations whose objective is to generate shareholder value.

The network leadership principles focus on: mission before organization; governance through trust-based relationships, rather than top down controls; promotion of others rather than oneself; and building of constellations rather than stars. These can be applied at all levels of an organization, from the executive suite to leaders out in the field. It is a shift from traditional leadership approaches that focus on the charismatic individual who has formal authority to get things done, to a more open-sourced approach to addressing social problems.

Network leaders start with the mission and engage others (especially those they seek to serve) to mobilize resources to support them doing what they would have wanted to do for themselves. It is a significant departure from doing ‘to’ and instead working with others as peers, equals, and true partners.

Photo Credit: Harvard Business School

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Nonprofit Leaders Have the Power to Create Capacity Funding

nonprofit capacity capitalI was in a meeting with a group of nonprofit leaders the other day, and one of them voiced an often-heard complaint: “There just aren’t many foundations funding nonprofit capacity building.”

I was instantly reminded of my mother’s admonishment when I would come home from school with complaints about a classroom rule or a frustrating teacher. She would say, “Well, you have a mouth on you, don’t you?” Her quip was intended to encourage me to stop complaining about an inadequacy (however small, in my case) and do something to change it.

While I am the first to bemoan the lack of adequate resources in the nonprofit sector, nonprofit leaders themselves do have some agency to turn the tide and find funding to create more effective and sustainable organizations.

Rather than searching for donors who already express an interest in funding nonprofit capacity (like fundraising staff and systems, program evaluation, technology), it is actually more effective if a nonprofit leader takes it upon herself to create her own capacity funders.

But that requires a process, like this:

Move From Scarcity to Abundance Thinking
You can’t hope to solve your capacity challenges without thinking that they are, in fact, solvable. Many nonprofit leaders are so used to going without that they don’t allow themselves and their staffs to envision what could make things better. So start by brainstorming with your staff the hurdles standing in your way (lack of fundraising staff, inadequate technology, poor long-term planning, disengaged board of directors). Then list the kinds of investments you could make to solve those challenges (new staff positions, new technology and systems, strategic planning, board training) without constraining those potential solutions due to their costs.

Create a Capacity Building Plan
Once you have articulated what is standing in your way and the potential solutions to those hurdles, create a plan for overcoming your nonprofit’s challenges. Because funders often see capacity funding as more “risky” than traditional programming support, a nonprofit leader interested in securing capacity building funds must put together a clear plan for the need, solutions, costs and execution plan for capacity support. Clearly articulate what capacity changes you need to make, why, what those changes will help you accomplish, and over what timeframe.

Create a Capacity Building Budget
Attached to your capacity building plan must be the dollars necessary to implement the plan. What would it cost for a new donor database, a program evaluation, or your other needed capacity investments? Do the research and then create the capital requirements, over an adequate timeframe (2-3 years), for the capacity building needs you have. Now you know how much capacity capital you need to raise.

Brainstorm Capacity Donors
Just as you would with a traditional capital campaign, create a list of potential donors to whom you will pitch this “capacity capital campaign.” This is where the real magic happens — when you turn traditional donors into capacity building donors, perhaps without them even knowing it. A good capacity building donor is someone (a major individual donor, board member, or foundation funder) who is already a donor to your nonprofit and can be convinced (through your excellent persuasion skills) that an investment in your capacity building plan (above) will actually help your organization do even more of the things they love.

Work the Prospect List
Just as you would in a major donor campaign, begin meeting one-on-one with these prospective capacity building donors to share your capacity building plan and articulate how critically important these capacity building investments are to the future of your work together. Make a clear, compelling argument about how greater organizational capacity will help you further the mission that these donors love. Connect greater effectiveness and sustainability directly to more programming, more people served, more outcomes achieved.

Demonstrate the Return on Their Investment
Once you’ve secured them, provide those donors who become capacity builders a regular update on the progress of your capacity building efforts. And I have seen tremendous results that nonprofits can report on these types of capacity investments. One of my clients was able to translate $65,000 worth of capacity building investments in strategic planning, board development, fundraising training and leader coaching into 300% growth in the number of people they reached with their services. Another client turned $350,000 worth of capacity building investments in a new donor database, fundraising staff and training, and donor research into a $1.4 million annual increase in fundraising. If you make enough and the right kind of capacity investments, you can see gains in programming, efficiency, and fundraising effectiveness, so share those wins with those who invested in them. And believe me, your capacity donors will be hungry for more.

Instead of continuing to complain about a lack of capacity funding in the nonprofit sector, let’s fix it. A big part of the solution lies in nonprofit leaders planning for and initiating capacity building conversations with their current donors. And in so doing, nonprofit leaders themselves can change philanthropy for the better.

To learn more about turning your donors into capacity funders, download the Launch a Capacity Capital Campaign Step-by-Step Guide.

Photo Credit: taxcredits.net

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6 Steps to Operationalize a Nonprofit Strategic Plan

gearsOne of the biggest complaints about nonprofit strategic plans is that once created, they just sit on a shelf. A strategic plan is completely wasted effort if you neglect the final step of operationalizing it.

And by that I mean creating an annual tactical plan and monitoring process that directly tie to the larger strategy. In fact, lack of the operational part of your strategic plan is one of the 3 biggest problems with nonprofit strategic planning.

It does absolutely no good to have big goals that you want to accomplish and a larger future direction for your nonprofit’s work if you don’t have a way to connect that to your day-to-day operations.

So here are the 6 steps to do just that:

1. Create the Strategy
Start with the broad goals and objectives of your strategic plan. Typically, I recommend a nonprofit have 3-6 broad goals over a future (say 3 years or so) period. These should always tie to your longer term Theory of Change, and each goal should be broken down into the 5-10 objectives necessary to get there. And it goes without saying, but you have to create this strategy through a defined strategic planning process.

2. Create Annual Milestones
Once the board has approved those broad goals and objectives, staff needs to create a milestone table that articulates a lead person responsible (“Lead”) and a deliverable for each objective at the end of each year of the strategic plan (“Milestone”), like this:

 

milestone table

 

 

 

 

 

 

 

 

 

 

3. Create a Year One Operational Plan

Once you have that milestone table, you can pull out the milestones for the first year and develop your Year 1 operational plan (below), which lists monthly or quarterly checkpoints for each objective’s milestone for that year. This will helps you monitor (step #4 below) whether the plan is coming to fruition.

operational plan

 

 

 

 

 

 

 

 

 

 

4. Monitor Monthly at Staff Level

This operational plan should be reviewed on at least a monthly basis, where the staff comes together to analyze their checkpoints and report on what’s working, what’s not, and where they need to make adjustments.

5. Monitor Regularly at Board Level
Whether your board meets monthly, quarterly or (yikes!) less, you need to report to them on the progress of your strategic plan at every meeting. Since the board is ultimately responsible for the strategic direction of the organization, they need to understand how it is going. Using the operational plan above, you can easily highlight where: things are moving smoothly (green), things need discussion or action (yellow), and serious problems or hurdles (red) lie.

6. Adjust Accordingly
On at least an annual basis, the full board should review the organization’s Theory of Change and goals and objectives of the strategic plan to determine if any revisions (due to changes in internal and/or external circumstances) need to be made.

I believe that a huge reason for the distaste nonprofit leaders have for strategic planning comes from the poor operationalization of those plans. You simply cannot hope to execute on a strategic plan without tactics to get there.

You can learn more about what a strategic planning process looks like here.

Photo Credit: Kevin Utting

 

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What is the Value of a Nonprofit Leader’s Time?

clockIt never ceases to amaze me how often nonprofit leaders give away their expertise and their time – for free.

Here’s just the most recent example I’ve encountered.

A leader of an education nonprofit, let’s call her “Amy,” was approached by a group of funders who wanted to start a similar program in a different city. They had already identified a potential leader of the effort, but this leader, let’s call him “Mark,” was pretty inexperienced in working with school districts and in managing a large scale nonprofit effort.

So the group of funders asked if Amy would be willing to help Mark. This would involve Amy sitting in on some community meetings and providing one-on-one coaching on a regular basis to Mark.

Because Amy’s nonprofit also received funding from some of these funders, she felt obligated to comply. And let me be clear, Amy was offered absolutely no compensation for her time, effort and expertise.

There are several things wrong with this situation.

First, although this group of funders found tremendous value in Amy’s expertise, they did not assign any financial value to that expertise. They sought her out, and indeed already determined that their effort would be hampered without Amy’s guidance. However, they also assumed (perhaps subconsciously) that this nonprofit leader was so passionate about the education space, that she would be more than willing to donate her time.

Second, Amy herself did not assign a financial value to her time. She was complicit in the funders’ assumption that, while her time has huge social change value, it has no financial value. But the two must correlate. Amy’s time is a limited resource. And thus she must calculate the financial value of that resource.

But, third, nonprofit leaders don’t necessarily have the tools to calculate the value of their time.

In the hopes that other nonprofit leaders don’t get caught in Amy’s predicament, here’s a quick three-step process for calculating the financial value of your time as a social change expert, based on the financial value your organization assigns to your time.

  1. Determine Your Annual Cost: Take your annual salary and add the monetary value of your annual benefits (healthcare contribution, social security contribution, etc.). Typically benefits are calculated at an additional 25% of your salary. So, if your annual salary is $85,000 you would multiply that by 1.25 to get the total of your salary plus your annual benefits: $85,000 x 1.25 = $106,250.

  2. Determine Your Hourly Cost: Then, divide that salary + benefits number by the average number of working hours in a full-time position (so 52 weeks a year at 40 hours per week is 2,080 hours per year). I know you probably work more than 2,080 hours in a year, but this is just a general full-time number of hours. So, in this example, your hourly rate would be $106,250 / 2,080 = $51.08. Or $51 per hour, just to make it easy.

  3. Determine Your Hourly Value: If you are feeling bold, you can add a profit margin to this number, just as anyone who is paid to offer their expertise (lawyer, consultant, doctor) does. The idea here is that if someone pays you $51 for an hour of your expertise, you are only breaking even. But if you actually want to make a bit of profit that you can plow back into your organization, you could add in a little margin. So perhaps you round up to $65 per hour.

Now, you have a number you can use.

If Amy had been armed with such a calculation, when the group of funders came to her, she could have estimated the number of hours required (including community meetings, coaching, etc.) and then presented it to the funders. Perhaps the hours totaled 50 over the course of a 12-month period. This would have a financial value then of 50 x $65 per hour = $3,250, which I would argue is still a very conservative valuation.

So that group of funders would need to make a payment to Amy’s nonprofit (above their normal contributions) of $3,250 in order for her to agree to their request.

(And now that you have a way to calculate the hourly value of your time, you can also use it to determine the value of your time spent on other things — for example, fundraising activities like this.)

I can hear nonprofit leaders and funders gasping, “How dare you suggest that a nonprofit leader ‘charge’ a funder for her time.” And others might worry that funders would be offended by the request and end their other contributions to Amy’s nonprofit.

But shouldn’t nonprofit leaders be aware of (and transparent about) the costs embedded in how they are spending (and being asked to spend) their time? Nonprofit leaders and funders could then have a more illuminating conversation. Perhaps Amy’s group of funders won’t want to invest $3,250 in starting up Mark’s new nonprofit. If that is the case, then they probably weren’t very committed to the new effort in the first place. Far better to know that up front rather than after Amy sunk 50 hours into something that has nothing to do with her organization.

It’s time for nonprofit leaders (and their funders) to recognize the financial value of the social change expertise those leaders possess and invest accordingly.

Photo Credit: David Lofink

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What Unique Value Can a Foundation Create?

philanthropyI’ve started working in a new area of the social change space that I’m really excited about. Recently I’ve been helping some foundations figure out what market they are (and should be) in. Because if a foundation can be smarter and more strategic about figuring out where they should focus their efforts within a particular social problem, they will see a higher social return on their investment.

As I’ve said countless times, you cannot develop or execute on a strategy without really understanding the market in which you work. Although we might like to deny it, nonprofits (and foundations) exist in a market economy, which means that they (like everything else) must compete amid the other actors and entities in the space. So it is absolutely critical that leaders understand what unique value their work brings to the space. This can be done through a Marketplace Map, which is one of the first exercises (along with a Theory of Change) that I help nonprofit leaders create during a strategic planning process.

An organization is best positioned to create social change in a sustainable way when their core competencies (what the organization does better than anyone else) intersects with a set of social problems apart from potential competitors or collaborators. This is not at all to say that you shouldn’t collaborate. But when you do, you must clearly understand what you bring to the table that is distinct from and additive to what your competitors bring to the table. In mapping their marketplace, an organization can much more clearly understand and articulate their value proposition and can direct their resources more effectively to the realization of that value proposition.

And the same is true for foundations. I am ever optimistic that just as nonprofit leaders are getting smarter and more strategic about the work they do, foundation leaders are as well. I would love to see more foundations taking a step back and really analyzing the social change marketplace in which they operate and determining how they can bring unique value to that marketplace.

Let’s say for example a funder is really passionate about addressing climate change. But there are many moving parts in the marketplace of that social problem. There are scientists and researchers and other experts who have views on the problem and the efficacy of potential solutions. There are many nonprofits in many different categories working on various aspects of the larger problem. There are policies and policymakers who are addressing the issue in various ways. There are other foundations and philanthropists who are investing in different solutions. It can be overwhelming for any particular funder to know where they specifically can have an impact on a very complex climate change marketplace.

So I help the foundation analyze these various elements, where and how effectively each is operating, where trends effecting the social problem are moving, and where the particular funder can add unique value.

While I spend a good deal of time on this blog giving voice to the challenges of the nonprofit sector, there is no doubt that the philanthropy that funds the sector has room to grow as well. And in my mind, part of that growth involves foundations getting more strategic about exactly where they can create the most value with their dollars. Because if both nonprofits and the philanthropists that fund them can be smarter about the marketplace of social problems, we just might get closer to solving them.

Photo Credit: ribosomis

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