In today’s Social Velocity interview, I’m talking with Lowell Weiss, President of Cascade Philanthropy Advisors, which provides personalized guidance to foundations and individual donors seeking to deepen their impact. Previously, he served in leadership roles at the Bill & Melinda Gates Foundation, the Morino Institute, and in the Clinton White House.
You can read past Social Velocity interviews here.
Nell: Why do the Leap Ambassadors believe now is the right time to introduce the Performance Imperative (PI) to the nonprofit sector? There have been past attempts to move the sector toward outcomes and performance. What makes this effort and this timing different?
Lowell: We don’t know if we’ll break through with this effort. But the 70+ members of the Ambassadors Community are committed to giving it our all, because we believe that performance matters more than ever. The social and public sectors are increasingly steering resources toward efforts that are based on a sound analysis of the problem, grounded assumptions about how an organization’s activities can lead to the desired change, and leadership that embraces continuous improvement.
High performance is all too rare in our sector today. In fact, we don’t even have a commonly accepted definition of the term “high performance.” The PI is our attempt to create that common definition and then start the process of creating guideposts to help nonprofits who are motivated to improve their performance for the clients and causes they serve.
We’re not aware of any other effort devoted to this mission-critical topic that has engaged so many top nonprofit executives, funders, and thought leaders as co-creators. Perhaps even more important, the PI goes beyond the typical focus on helping nonprofit leaders do things right. When leaders do things right, they can achieve strong operational performance but not necessarily meaningful results for beneficiaries. To achieve the results embodied in their mission statements, leaders must go the extra mile, through diligent internal monitoring and external evaluation, to ensure they’re also doing the right things.
Nell: Does the PI apply to any and all nonprofit organizations? Is it a measuring stick that any size and domain area nonprofit should use, or are there certain types of nonprofits for which this really works?
Lowell: We believe the insights in this document are most immediately applicable to nonprofit organizations with budgets of $3 million or more. But many of the basic management principles apply to organizations of any size, just in less-intensive ways. Some of the details have a special focus on organizations that provide direct services. We believe the overarching framework is relevant for organizations of almost any type.
Nell: What will keep the Performance Imperative from becoming a dusty document rather than a movement? What does success look like for this movement and how will you measure whether that happens?
Lowell: Let’s face it: The topic of high performance is not a lightning-fast meme that will spread like a left shark or right-wing conspiracy theory. It’s a slow, complex idea that will require patient, methodical work to advance. Hence the importance of the Leap Ambassadors Community, a group of leaders who care deeply about high performance and are willing to share the gospel with trusted colleagues and peers.
We believe that when leaders with strong beliefs and passion coalesce around a common purpose, they can build a collective power and influence to drive positive change. They can create an infectious enthusiasm to pull other like-minded players into a growing community of action. That can only happen when you take the time to build relationships, trust, quality work, and collective pride in that work. Overall, we’ll judge our success based on a) to what extent the PI becomes an established framework for increasing the understanding and expectation of high performance as a critical pathway to greater societal impact; and b) to what extent the Leap Ambassadors Community demonstrates itself as a thoughtful, knowledgeable, aligned community of leaders and earns respect, collaboration, and support from prominent players in the field.
To be more concrete about how we will know if we’re on the right track, we’ve established metrics for the growth and engagement of the Ambassadors Community as well as for the value of the PI itself. Here a few of the milestones we hope to achieve over the next year:
- 100‐150 ambassadors have jelled as a community and are truly aligned with the community’s purpose.
- At least 25 nonprofits commit to using the PI to assess their strengths and needs; increase the board’s focus on mission effectiveness; improve their professional-development and organization-building efforts; or otherwise use the PI as a North Star to guide their journey toward high performance.
- Three to five foundations adopt the PI for themselves and their grantees, and they begin to apply the PI in their grant decisions and grantee support.
- Three charity ratings or information providers build the PI into their offerings.
- At least two vendors prominently use the PI in their suites of products and services.
- At least two prominent nonprofit management and leadership programs incorporate the PI as a core staple in their products and services.
- At least one institution creates a prominent award aligned with the PI or adapts an existing award.
Nell: Where do funders and regulators fit into this push for higher performance in the sector? One of the things that holds nonprofits back from high performance is an inability to spend the money it takes to achieve high performance (money for infrastructure, evaluation, staff, etc.). How do we fix that and where does fixing that fit into the movement’s plans?
Lowell: Funders and regulators can and must play a role. Right now, I’m helping a multiservice agency transition from providing compassionate care to ensuring that its clients achieve meaningful, measurable, sustainable life outcomes. The agency is trying to live the PI. But here’s the sad reality: The journey toward high performance is making the organization’s development challenges harder, on net. That’s because there are so few funders who understand the value of high performance—and even fewer who reward it.
To make the leap to high performance, nonprofits need creative funders willing to think big with them—not just ask for more information on results. They need funders who understand that making the leap requires more than program funding and more than the typical “capacity-building” grant. They need funders who make multi-year investments in helping nonprofit leaders strengthen their management muscle and rigor.
That’s why we’re so supportive of the work of Results for America and the Coalition for Evidence-Based Policy, organizations that are helping governments to base funding decisions on evidence and results. And that’s why the Ambassadors Community is developing the case for high performance that we can start bringing directly to funders. Bridgespan Group Co-Founder and former Social Innovation Fund Director Paul Carttar and Center for Effective Philanthropy President Phil Buchanan are co-leading a working group of ambassadors to build the case for funders. They are planning to convene a dozen+ foundation leaders to help flesh out the most effective arguments and evidence we can assemble to persuade funders that they have a better chance of accomplishing their missions if they support their grantees’ pursuit of performance.
Photo Credit: Cascade Philanthropy Advisors
I’m really excited to announce today’s launch of the Performance Imperative. The Performance Imperative is a detailed definition, created by a community of nonprofit thought leaders, of a high-performance nonprofit. The hope is with a clear definition of high-performance we can strengthen nonprofit efforts to achieve social change.
As we all know, we are living in a time of growing wealth inequality, crumbling institutions, political divides, and the list of social challenges goes on. The burden of finding solutions to these challenges increasingly falls to the nonprofit sector. So “good work” is no longer enough. We need to understand — through rigor and evidence — which solutions are working and which are not.
The Performance Imperative was created by the Leap Ambassadors Community, a network of 70+ nonprofit thought leaders and practitioners of which I am a member. The group emerged from the 2013 After the Leap conference, which brought nonprofit, philanthropic and government leaders together to create a higher-performing nonprofit sector. The group is determined to lead the fundamental, and critical, shift towards a more effective nonprofit sector.
The Performance Imperative defines nonprofit high performance as “the ability to deliver—over a prolonged period of time—meaningful, measurable, and financially sustainable results for the people or causes the nonprofit is in existence to serve.”
The Performance Imperative further describes seven organizational pillars that lead to high performance:
- Courageous, adaptive executive and board leadership
- Disciplined, people-focused management
- Well-designed and well-implemented programs and strategies
- Financial health and sustainability
- A culture that values learning
- Internal monitoring for continuous improvement
- External evaluation for mission effectiveness.
Each one of these 7 pillars is fully explained in the Performance Imperative.
Over the next several months I will write a blog series that digs into each of these 7 pillars to understand what each one means for a nonprofit organization and to examine case studies of how other nonprofit leaders have approached the pillars. And next week on the blog I’ll interview one of the founders of this movement toward high performance.
Although the Performance Imperative is targeted toward $3M+ nonprofits, it can also be a benchmark upon which any social change nonprofit can measure itself. Nonprofit boards and staffs can use the Performance Imperative as a north star to guide their journey toward higher performance.
The critical necessity of a high performing nonprofit sector is clear. We no longer have the luxury of benevolent good works that sit aside the business of our country. Now is the time to find solutions that really work and develop the leadership and sustainability to spread them far and wide.
As Mario Morino, founder of the Leap Ambassador Community has said, “If we don’t figure out how to build high performing nonprofits, nothing else matters. This is the last mile. Our nation depends on it.”
This week I attended the After the Leap conference in Washington D.C. and was blown away. As I mentioned in a post earlier this year, the conference was organized by Social Solutions and PerformWell partners Child Trends and Urban Institute and builds on the momentum Mario Morino has created around his book, Leap of Reason, published in 2011, and the companion book Working Hard & Working Well by David Hunter published this year.
This first-ever conference was an attempt to bring the nonprofit, philanthropic and government leaders who are on the cutting edge of the movement to create a higher-performing social sector together to, as Mario put it “grow a critical mass who can mobilize for greater change.”
What’s Government’s Role in Nonprofit Performance?
Day 1 focused on government’s role in driving social sector performance management. A fascinating panel of government agency leaders, moderated by Daniel Stid from the Hewlett Foundation, discussed various efforts at the federal, state and local government levels to drive evidence-based policy and practice. But some in the audience and Twitter-verse wondered whether government could really be the impetus for a greater push towards measuring and managing outcomes in the nonprofit sector.
How Do You Get Buy-In For Change?
From the big, systemic view, the day quickly shifted for me to the organization-level with the fantastic panel on “Getting Buy-In” from staff, board and funders for a shift towards performance management. Isaac Castillo from DC Promise Neighborhood Initiative, Bridget Laird from Wings for Kids, and Sotun Krouch from Roca explained how they had moved their nonprofits toward articulating and measuring outcomes. The most effective approach seemed to be to ask “Don’t you want to know whether the work we are doing is helping rather than hurting?” Isaac made the urgency to move toward performance management clear, “If you haven’t started doing performance management yet, in 12-18 months you will start losing funding to those who are.”
Can We Convince Funders to Invest?
Day 2 of the conference kicked off with an inspiring keynote address by Nancy Roob from the Edna McConnell Clark Foundation that really served as a call to action for the foundation world. Nancy painted a pretty stark picture of the disconnect she saw between how much money we’ve spent on solving social problems in the last decades and how much actual progress we’ve made. She blamed this disconnect on “our piecemeal approach to solutions.” As she bluntly put it, “We are woefully under-invested in what we already know works.” She laid out 5 steps funders can take to move away from piecemeal and toward transformational social change:
- Make bigger, multi-year investments
- Provide more upfront, unrestricted, flexible capital
- Invest in nonprofit evidence building
- Scale what works with innovation, and
- Adopt an investor mindset
But for Nancy, it’s not just up to funders, nonprofits also need to change. She urged nonprofits to:
- Shed the charity mindset
- Focus on the larger context
- Create a performance management culture, and
- Ask for help to achieve performance
From there, Phil Buchanan from the Center for Effective Philanthropy led a panel with Carol Thompson Cole from Venture Philanthropy Partners and Denise Zeman from Saint Luke’s Foundation asking “Do Funders Get it?” While a few funders are willing to invest in helping nonprofits articulate, measure and manage to outcomes, most are not. The panel suggested that some of this reluctance stems from funder’s lack of humility and fear of what they might find. Audience members suggested that it might also be funders’ lack of performance expertise. (You can read Phil Buchanan’s blog post giving more detail on this panel here.)
From there I attended a breakout session “Funder Investment Strategies to Strengthen Nonprofit Performance Management Capacity” where Victoria Vrana from the Gates Foundation and Lissette Rodriguez from the Edna McConnell Clark Foundation and two of their grantees discussed how they worked together to fund and create performance management systems.
The final panel of the day brought an impressive group of nonprofit CEOs together (Mindy Tarlow from Center for Employment Opportunities, Sam Cobbs from First Place for Youth, Cynthia Figueroa from Congreso de Latinos Unidos, Bill McCarthy from Catholic Charities of Baltimore, and Thomas Jenkins from Nurse-Family Partnership) to talk about how they each had built a performance management system at their organizations, the hurdles they encountered, how they funded it, and where they are now.
Where Do We Go From Here?
Mario Morino rounded out the conference with an inspiring call for us to build momentum. He outlined some new ideas coming out of the conference that he’d like to see developed by 2020, including:
- A “Manhattan Project” of social sector evidence
- A National Commission on Nonprofit High Performance
- An Aggregated Growth Capital Fund to deploy billions to solve entrenched national problems
- A Performance Academy for Social Impact
- Presidential Performance-to-Impact Awards
- Social Sector Center for Quality Improvement
- A Solutions Journalism Network to “lift up the hope spots” in the country
- Leap Learning Communities in local settings connected in a national web
This was one of the best conferences I’ve been to in years. The caliber of the presenters and audience was amazing. It felt like I was witnessing the birth of the next generation of the social sector. Buoyed by the ability to see the writing on the wall, this group is determined to lead the fundamental, and critical, shift towards a more effective sector.
The urgency of this movement became increasingly clear through the course of the two days. Our country is witnessing mounting disparity and crippling social challenges. It is increasingly up to the social sector to turn the tide. And the time is now. As Mario charged at the end of the conference “If we don’t figure out how to build high performing nonprofits, nothing else matters. This is the last mile. Our nation depends on it.”
Photo Credit: tableatny
In today’s Social Velocity interview, I’m talking with Bill Shore. Bill is the founder and chief executive officer of Share Our Strength, a national nonprofit working to end childhood hunger in America. He has served on the senatorial and presidential campaign staffs of former U.S. Senator Gary Hart and as chief of staff for former U.S. Senator Robert Kerrey. He is also the author of four books focused on social change, including, The Cathedral Within.
You can read past interviews in the Social Innovation Interview Series here.
Nell: You’ve been on a (writing) kick lately encouraging nonprofits to make bigger, bolder goals. Which do you think comes first: bold goals or a sustainable financial model? And how are the two related?
Bill: Just as every journey aims toward a destination, every social change effort should start with a goal, bold or otherwise. A sustainable financial model, while critical, is a means to an end, not an end in and of itself. We began Share Our Strength with a financial model based more on cause-related marketing and corporate partnerships than on traditional fundraising. By leveraging the assets we’d created and delivering measurable value back to our partners, we generated significant revenues in ways that felt more sustainable. We were a grant maker to other organizations, and proud of the good work they did, but ultimately it was unsatisfying not connected to a bold goal.
Nell: The stated bold goal of Share Our Strength is to eradicate childhood hunger in America by 2015. That’s 2 years away. Will you get there? And how has your experience working toward that bold goal affected your thinking about how realistic bold goals are?
Bill: It’s a great question because a bold goal is a double edged sword. If you achieve it the market will reward you. And if you don’t it may penalize you. That’s all as it should be. But the real reason to do it is not the market or fundraising or the media, but for oneself. When you devote a lot of your life tackling tough social problems, you deserve to know whether you are moving the needle. We’ve seen the market reward Share Our Strength for simply setting the goal of ending childhood hunger by 2015. Our revenues have more than doubled, and that has fueled increased impact. We will not get all of the way to our goal by 2015. We will need more time. But we believe we will have earned it. In the states and regions where we have concentrated our resources we will have proven that childhood hunger can be eradicated. We believe that such compelling proof of concept will give us the support necessary to scale the strategy everywhere.
Nell: You have argued that nonprofits are not resource-constrained, rather that they “suffer a crisis of confidence” in investing in their own capacity. Some might argue that that’s easy for the head of a $40+ million nonprofit to say. How do you think the average nonprofit can move beyond the starvation cycle of never having enough resources?
Bill: It’s not that nonprofits are not resource constrained, it’s because almost all of them are that it is even more important to invest in their own capacity, to take a long view and be willing to trade off impact in the short-term if that impact can be multiplied dramatically in the long term. Imagine a maternal and child health clinic that serves 50 women a day and makes the decision to serve only 25 a day for 6 months so that it can invest in capacity that will enable it to serve 500 a day when the six months are up. The compelling nature of urgent human need makes that a tough decision to make, but it’s the right one if you have the confidence that more capacity will equal more impact.
Nell: Moving to bold goals necessitates a way to measure whether those goals have been achieved. Yet outcomes measurement is a very nascent practice in the nonprofit sector. How do we (or can we) get to a place where we are effectively measuring the results of both individual nonprofits and larger solutions? And who will pay for that work?
Bill: As your question suggests, measuring outcomes, and communicating what you’ve measured, comes at a price. Indeed it can be expensive, and that might mean less money devoted to program in the short-term. With few exceptions there won’t be third parties lined up to pay for it. Organizations will have to decide whether it adds to their long-term competitive strengths to invest in measuring outcomes and if it does, they should be willing to make that investment. A key task of organizational leadership is to marshal the will for these investments that don’t pay off until the long-term. The challenge is exacerbated by the fact that measurement is a still nascent practice, there won’t be common measure that can be adopted in a one-size-fits-all manner, and so each organization must wrestle to the ground the metrics that are right for their work.
Nell: What about bold philanthropy and bold government? Is it possible for those two sectors to be more bold? What would that look like and how optimistic are you that those kinds of changes are possible?
Bill: I’m confident that bolder philanthropy can lead to bolder government. Our politics currently is so polarized and paralyzed that people need to see examples of programs that work. Philanthropy can do things that government can’t do: take risks, innovate, and be closer to the people we serve. And when that all adds up to a program or service that works, it creates an even greater moral obligation on the part of the public sector, i.e. government to take what works and help scale it. Resource constraints and failures of imagination have conditioned us to pursue incremental change. But big and complex problems demand transformational change to address those problems on the scale that they exist.
Photo Credit: Share Our Strength
It was really hard to narrow down to 10 great reads this month. People wrote some really compelling (even more than usual) things in October. And some longer pieces in particular were quite thought-provoking. Some asked searing questions like “Is arts innovation really innovative?” and “Is increasing income disparity making us less empathetic?” and “Can philanthropy fix our broken democracy?” And that’s just a start. Lots to think about.
Below are my picks of the 10 best reads in the world of social innovation in October. But please add what I missed in the comments.
- The conversation about the overhead myth, the destructive idea that nonprofits should be evaluated based on how much they spend on overhead (fundraising and administrative expenses), still rages on. First Paul Hogan from the John R. Oishei Foundation reframes the argument to include general operating and program support. Then Heather Peeler from GEO reports on a panel at a recent gathering of Social Innovation Fund grantees and grantors discussing what funders can do to build more sustainable organizations. And Julie Brandt writes a ringing endorsement of the overhead myth movement arguing that “Donors need to focus on evaluating charities based on leadership, transparency, governance, and results.”
- But lest you think that everyone agrees, Tiziana Dearing raises some good points about nonprofits not yet having the necessary resources or tools to boil outcomes down to short term ratios or ratings. As she says, “Everyone has more work to do.”
- There were some great examples of nonprofits using social media in interesting ways. From the Social Media BirdBrain blog comes 4 Best Examples of Nonprofit Video Storytelling and from the HubSpot blog, 10 Nonprofits That Are Totally Nailing Pinterest Marketing.
- And speaking of innovatively using media to move social change forward, this infographic on America’s school dropout problem demonstrates a concise and compelling way to explain a complex problem.
- Part of the potential solution to America’s education problems might lie in new science. An interesting new school within Zappos CEO Tony Hsieh’s Las Vegas Downtown Project is using neuroscience to teach children in new ways.
- If you really want to unpack the buzz around “innovation,” particularly in the arts, take a look at this really interesting, thought-provoking 6-essay series at Culturebot questioning innovation and the arts, what’s working and what isn’t. It is well worth your time and is guaranteed to make you think.
- On the Idealist blog, April Greene wisely counsels those entering the social change space, that if you want to pursue your dreams, don’t tell your mother. Such good advice, ha!
- Richard Eisenberg provides some really interesting analysis of recent data and what it tells us about how generations approach giving differently.
- Writing in the New York Times, Daniel Goleman worries that the widening income gap may be creating a widening empathy gap because “social distance makes it all the easier to focus on small differences between groups and to put a negative spin on the ways of others and a positive spin on our own.” Very scary.
- President of the MacArthur Foundation, Robert Gallucci writes a passionate plea that philanthropy help fix a quite broken (as particularly evidenced in October’s federal government shutdown) American political system.
Photo Credit: ekelley89
Note: I was asked by Markets for Good to write a post as part of their ongoing online conversation about improving how money flows to social change. Markets for Good is an effort by the Bill & Melinda Gates Foundation, the William & Flora Hewlett Foundation, and the financial firm Liquidnet to improve the system for generating, sharing, and acting upon data and information in the social sector.
Over the past several years, Markets for Good has been a forum for discussion and collaboration among online giving platforms, nonprofit information providers, nonprofit evaluators, philanthropic advisors, and other entities working to improve the global philanthropic system and social sector. Below is the post I wrote. You can see this post and the others in their series and contribute to the ongoing conversation at the Markets for Good blog.
As we talk about creating a space “where capital flows efficiently to the organizations that are having the greatest impact” we must address the elephant in the room: how nonprofits are funded.
Currently that’s a pretty broken model. And if we are ever to direct more money to more social change, we must fix it.
In an ideal world, a social change organization would create a potential solution to a social problem, prove that the solution actual resulted in change, and then attract sustainable funding to grow that solution.
But that’s not currently happening because the way nonprofits are funded is broken in three key ways:
Nonprofits don’t articulate a theory of change. 10 years ago it was enough for “charities” to “do good work.” In an ever-increasing drumbeat nonprofits are being asked to demonstrate outcomes and impact. And for good reason. If we are truly interested in social change then we must understand which organizations are actually creating it and thus deserve our investment.
But you cannot demonstrate outcomes and impact if you have not first articulated what outcomes and impact you think your solution provides. Those nonprofits that truly want to solve a social problem (as opposed to simply provide social services) must articulate a theory of change. A theory of change is an argument for how a nonprofit turns community resources (money, volunteers, clients, staff) into positive change to a social problem. It seems simple, yet most nonprofits working toward social change have not done this.
We need to change that. This simple argument is the first step in creating real, lasting social change and attracting money to be able to do it in a financially sustainable way.
Nonprofits struggle to prove impact. Once a theory of change is in place, nonprofits need to prove whether that theory is actually becoming a reality. Nonprofits have struggled for years to figure out how to measure whether they are actually achieving results. But they cannot figure it out on their own.
Philanthropy needs to step up to help fund the work, or on a much larger scale, social science could prove the impact of overall interventions that nonprofits can then implement.
Either way, the burden of proof can no longer rest solely on the shoulders of individual nonprofits.
Fundraising isn’t sustainable. Once social change is actually happening, we want to grow that effective solution in a sustainable way. But that necessitates a real financial model.
Most nonprofits chase low-return fundraising efforts that lock them into a band-aid approach that is far from financial sustainability. Few nonprofits create and execute on an overall strategic financial model that aligns with the impact they want to achieve and their organizational assets.
We have to stop the madness.
We must help nonprofits create an overall financial engine that strategically and effectively supports the social change they are working toward.
Philanthropists must provide nonprofits the runway necessary to find the right financial model for their organizations. Capacity capital funding could do this, allowing nonprofits the space to analyze their current money-raising activities and create and execute on a plan for transforming those into a sustainable financial model. The end result would be nonprofits with a great solution to offer suddenly have the ability to grow the solution in a sustainable way.
If we are really serious about directing more money to more social change, we need to reinvent how money flows to nonprofits. Instead of relying on a broken fundraising model, we need to take a big step back and get strategic. With articulated theories of change, systems for effectively proving impact and the runway to create real financial models, nonprofits will be able to bring social change to sustainable fruition.
Photo Credit: Markets for Good
A big topic of conversation lately has been whether donors really care about impact, or whether they simply just give based on less scientific things like their emotions, or their friends recommendations. Which is why I’m excited to announce that I’ll be participating in a Google Hangout April 30th about using data to attract donors.
Writing in the Stanford Social Innovation Review, Tim Ogden claims that donors have never really been interested in impact. And Ken Berger from Charity Navigator and William Schambra of the Hudson Institute debate (here and here) whether moving the nonprofit sector toward performance management helps or hurts social change efforts.
To add to this conversation, David Henderson and I are hosting a Google Hangout, “How to Use Real Performance Data to Raise More Money,” on Tuesday, April 30th at 2pm Eastern. David is a super smart guy who runs Idealistics, a consultancy that helps nonprofits learn from their outcomes data, increase impact, and demonstrate results to funders and stakeholders. David’s professional focus is on improving the way social sector organizations use information to implement higher impact poverty interventions. He has been quoted in the Chronicle of Philanthropy and has written for Change.org and the Huffington Post. You can read my interview with him from a year and a half ago here.
David and I thought it would be interesting to host a conversation with nonprofit leaders about how nonprofits can use real performance data to raise more money. We’ll kick off the hour-long conversation with a couple of points and a case study or two of nonprofits that are using data to raise more money, but then we’ll open it up to you for questions. You can send us your questions ahead of time (via email to email@example.com or firstname.lastname@example.org) or simply post them to the Google Hangout here as you watch.
I hope you’ll join us!
How to Use Real Performance Data to Raise More Money
A Google Hangout with David Henderson and Nell Edgington
Tuesday, April 30th, 2013
Can nonprofits that use real performance data to raise more money? Are donor increasingly interested in impact data? How can nonprofits communicate their program data to donors? And how should nonprofits respond to questionable performance claims by other organizations? Join David Henderson from Idealistics and Nell Edgington from Social Velocity in a Google Hangout on Tuesday, April 30th at 2pm Eastern to discuss these and many more questions about how nonprofits can use real data to raise more money. We’d love to have you participate in the discussion, so send your questions ahead of time to Nell or David, or leave a comment at the Google Hangout here.
Photo Credit: 401(K) 2013
When Mario Morino’s book Leap of Reason came out in 2011 I called it a Call to Arms for the Nonprofit Sector, because I believe Mario was challenging the nonprofit sector to undergo a complete shift from “doing good work” to becoming a performance management sector. And in recent year we are witnessing an ever-increasing effort to get nonprofits to demonstrate the results of their work. The companion to Leap of Reason, Working Hard and Working Well by David Hunter was released last week, and it makes an interesting follow up.
David has the same no-nonsense, tell it like it is, style that I love about Mario. David writes that his book “is a response to my perception that the social sector has failed, so far, to live up to its promise.” But he doesn’t just blame the nonprofits, he also finds fault with their funders and says his book is also “an admonishment to those funders who demand performance in which they don’t invest, results for which they don’t pay, and accountability from which they exempt themselves.” Ah, how true!
As David explains it, performance management has been given a bad rap in the nonprofit sector because it has so often been “compliance management,” something that was shoved down nonprofit throats by government or private funders seeking to limit the risk of their investments, rather than something that nonprofits themselves designed in order to create more effective social change.
David provides numerous nonprofit case studies that illustrate this new performance management mindset. My favorite was the Our Piece of the Pie case study, a broad social services nonprofit in Connecticut that had a watershed moment when they decided to focus their services just on youth. From that difficult and courageous decision, the nonprofit eventually transferred 600 clients, 30 employees and $1million to 3 local nonprofits that were a better fit for those outlier programs. As David explained, “It is rare for an organization to reach such strategic clarity…and even rarer to have the courage to challenge the continued relevance of its legacy programs and services.” Absolutely! When a nonprofit focuses their efforts on what they do best, instead of what they have always done, it can transform the organization and ultimately result in better outcomes.
The aim of David’s book is to leave a detailed model for nonprofits and consultants to use to create performance-based organizations. My favorite part of his model is “result-focused budgeting” where he takes nonprofits and funders to task for using “a shoestring budget that is inadequate to support the capacity building needed for high performance.” Amen to that! You simply CANNOT create high quality outcomes when you lack organizational capacity. The two will not coexist.
David spends the bulk of the book describing in detail the 4-day theory of change workshop he uses with nonprofits. While I applaud the probing nature of his model and its focus on creating clarity and metrics, I have some problems with the approach. His model assumes an organization can determine mission, vision, strategic direction and performance metrics in an isolated room over 4 days. But the reality is that nonprofits can no longer create their value proposition in a vacuum. A nonprofit must get outside the organization and understand the external marketplace of changing demographics, community needs, and competing solutions in order to then chart their course.
At the end of the day, though, I think David’s book adds tremendous value to the sector. He demands that nonprofits start asking hard questions and making difficult decisions. Ultimately David is encouraging nonprofits to move from “compliance management” to true performance management where they chart their own course and determine what it is they exist to do and whether they are doing that, not in order to garner more funding, but in order to ensure that they are actually making a difference for their clients.