The Evelyn and Walter Haas, Jr. Fund, a foundation on the forefront of investing in nonprofit capacity and one of the few foundations funding nonprofit leadership development, released a new report this week Beyond Fundraising: What Does It Mean to Build a Culture of Philanthropy?.
While I applaud the Haas Fund for taking a pioneering interest in, as they put it, “understanding how to break out of the nonprofit sector’s chronic fundraising challenges,” unfortunately I don’t think that this report will move the needle on the sector’s money woes.
Their landmark 2013 report published with CompassPoint, UnderDeveloped: A National Study of Challenges Facing Nonprofit Fundraising (of which the Beyond Fundraising report is a follow up) uncovered a real crisis in fundraising staffing in the nonprofit sector. And last year Haas announced a multi-year effort to “to identify gaps that may need to be filled when it comes to helping nonprofits break out of chronic fundraising challenges.”
A sector-wide conversation about money is so incredibly needed that I really appreciate the Haas Fund’s efforts to start it, especially when philanthropists are loathe to talk about the sector’s money challenges, let alone invest in solving them.
But in the hope that debate spurs greater change, and because of Haas’ expressed desire to open a conversation so that they can “learn out loud,” I offer my concerns about the Beyond Fundraising report.
As Linda Wood, Senior Director of Leadership Initiatives at the Haas Fund (and past interviewee on this blog), describes in the beginning of the Beyond Fundraising report, there must be a fundamental change in how nonprofits approach fundraising. As she writes: “Without a deeper shift in how organizations hold the work of fund development, simply adopting new tools and techniques may not be enough.”
The Beyond Fundraising report, authored by philanthropy consultant Cynthia Gibson (also a past interviewee on this blog), starts from where the 2013 UnderDeveloped report left off: that the lack of a culture of philanthropy is the most important issue holding nonprofits back from fundraising success:
By framing the issue as a talent pool problem alone, we neglect to focus more critically upon entrenched organizational factors that contribute to the inability to establish development as a shared function and nurture an organizational culture to sustain it. The right development director hire alone will never break the cycle, but the right person inside an organization that has a culture of philanthropy, can.
The Beyond Fundraising report is an attempt to understand what a culture of philanthropy is and how to encourage its growth. The report defines a “culture of philanthropy” as a situation in a nonprofit where:
Most people in the organization (across positions) act as ambassadors and engage in relationship-building. Everyone
promotes philanthropy and can articulate a case for giving. Fund development is viewed and valued as a missionaligned program of the organization. Organizational systems are established to support donors. The executive director is committed and personally involved in fundraising.
The report delineates four necessary components to a culture of philanthropy:
- Shared responsibility for development
- Integration and alignment with mission
- A focus on fundraising as engagement
- Strong donor relationships
It then provides a list of indicators for nonprofit leaders to use to assess whether or not they possess a culture of philanthropy, a list of “guiding questions” nonprofit leadership can ask in order to build a culture of philanthropy, and a list of roles that development staff and funders can play in bringing a culture of philanthropy to fruition.
While I don’t disagree with any of the indicators, questions, or roles the report describes, I don’t think that any of them, or even their sum total, will solve the lack of financial sustainability at a particular nonprofit, let alone in the nonprofit sector overall.
And this is because I think that only looking at fundraising — the pursuit of philanthropic dollars, which only make up 13% of all the money flowing to the nonprofit sector — is a fundamentally flawed approach to understanding money in the sector. My bias has always been to move the sector from a broken fundraising approach to a more strategic and holistic financing approach.
And while I agree that individual nonprofit leaders are part of the problem, they are just one part. Often their troubled approach to money is simply a reaction to a dysfunctional system. Certainly we need to move away from some ineffective money practices that nonprofit leaders embrace (being reactive rather than strategic about money, not calculating the return on investment of fundraising activities, not aligning money and mission, allowing a board to dismiss their money-raising responsibilities…).
But I worry that by scapegoating the problem to the shortcomings of individual nonprofits we are ignoring the larger financial dysfunctions of the sector. Rather than pull back the curtain on the systemic hurdles causing the nonprofit sector’s money woes, I fear that this report lays much of the blame for financial dysfunction at the feet of individual nonprofit leaders.
Because in my mind, the real problem is not the approach of individual nonprofit leaders, although that is important. I think the financial problems of the nonprofit sector run much deeper. If we truly want to address those problems we must have bigger conversations, and ask harder questions, like:
- Why is there a lack of financial acumen (how to effectively attract and employ money) throughout the sector (present among both nonprofits and their funders), and how do we solve that?
- Why is long-term organizational and financial planning not encouraged and supported throughout the sector?
- Why is there not enough investment in the financial function of nonprofit organizations (the staffing, systems, technology, planning, and marketing necessary to build sustainable financial models)?
- Why aren’t there many, many more funders like The Haas Fund discussing and investing in solutions to the sector’s money problems?
- Why are we still focusing on philanthropic dollars alone when we need to understand and integrate money as a whole into social change efforts?
And that’s just a start.
My fear is that if we place the full weight of nonprofit financial dysfunction on the shoulders of an individual nonprofit’s culture, or if we look only at fundraising, we shirk our duty to dig deeper and remedy larger, structural dysfunctions in the sector.
I applaud the Haas Fund for their determination and courage to create a space, through their capacity investments and on-going research, for the incredibly important conversation about money in the nonprofit sector. But I would love to see this effort grow to become a bigger conversation about how we solve the endemic financial challenges nonprofits face.
Photo Credit: The Evelyn & Walter Haas, Jr. Fund
It’s that time of year again — to put work away, enjoy friends and family, and give yourself a chance to take a breath. I will be taking the next two weeks off from writing the blog. But before I go, as is my tradition, I wanted to leave you with a list of the 10 most popular blog posts from this past year, in case you missed any of them.
I hope that you all will find some space over the next couple of weeks to relax, to get away, to regroup, and to ready yourselves for the next chapter. We need you social changemakers now more than ever, so please find some time to take care of yourself before you get back to taking care of the rest of the world.
Thank you for being part of the Social Velocity community and for all of your hard work making the world a better place. I wish you all a very happy New Year. I’ll see you in 2016!
- The Problem with Nonprofit Events
- How Scarcity Thinking Holds Nonprofits Back
- 7 Questions to Guide Your Nonprofit Strategy
- 5 Myths the Nonprofit Sector Must Overcome
- How to Build a Stellar Nonprofit Staff
- How to Create a Compelling Fundraising Ask
- 3 Signs of a Bad Nonprofit Strategic Plan
- 5 Fundraising Delusions Nonprofits Suffer
- What Do Your Programs Really Cost?
- The Network Approach to Social Change
Photo Credit: Ethan R
Although I already mentioned (in my September 10 Great Reads list) a really interesting article about “network entrepreneurs,” I want to further explore the concept because I think it could be a game changer for nonprofit leaders willing to embrace it.
Writing in the Stanford Social Innovation Review in September, Jane Wei-Skillern, David Ehrlichman, and David Sawyer describe a “network entrepreneur” as different from, and much more effective at creating social change than a typical nonprofit leader. As they put it:
A network entrepreneur’s approach expands far beyond the boundaries of their own organization, supporting peers and partners across sectors to solve the problem. Not surprisingly, the potential for impact increases exponentially when leaders leverage resources of all types—leadership, money, talent—across organizations and sectors toward a common goal.
And this mirrors Wei-Skillern’s earlier article from 2008, “The Networked Nonprofit” where she described how a “networked nonprofit” builds alliances far beyond its own walls and is thus much more effective at creating social change that a traditional nonprofit:
Many traditional nonprofits form short-term partnerships with superficially similar organizations to execute a single program, exchange a few resources, or attract funding. In contrast, networked nonprofits forge long-term partnerships with trusted peers to tackle their missions on multiple fronts. And unlike traditional nonprofit leaders who think of their organizations as hubs and their partners as spokes, networked nonprofit leaders think of their organizations as nodes within a broad constellation that revolves around shared missions and values.
In essence, the network approach to social change is one of true leadership — leadership writ large. Because a true leader leaves their ego, and the ego of their organization, aside in order to assemble all the required resources (individuals, institutions, networks, funding) to chart a path towards larger social change. Instead of leading an organization, a network entrepreneur is, in essence, leading a social change movement.
A network entrepreneur understands that social change lives beyond any single organization. It requires someone (or a set of someones) to marshall all the necessary resources, create a larger change vision and lead people towards that vision.
This concept is so critical to nonprofit leaders who are often working with such limited resources. If instead of working to build an institution, a nonprofit leader worked to build networks, she could be much more effective at creating long-term social change.
So what does this network approach look like in practice for a nonprofit leader?
Instead of thinking just about your organization, your staff, your mission, your board, your donors, you must analyze and connect with the larger marketplace outside your walls. You need to analyze the other people and entities working on similar challenges, and not just in the nonprofit space, but also in other sectors, geographies and time periods (yes, history matters!). Determine how other places, other people, other organizations, both past and present, addressed similar problems. You need to understand the points of leverage for attacking the problem on a much larger scale than your single organization can. Figure out who the influencers are in the space and how to connect your work with those other individuals, institutions, networks.
The network approach also requires that nonprofit leaders move away from the resource-constrained, scarcity approach that keeps them from forging alliances with other entities that might be competing for the same limited pool of funding. Instead leaders must take an abundance approach that leaves fears behind in favor of a bigger, bolder approach.
And the network approach involves having the confidence to think that there is potentially a larger solution and that you might be part of it. The dysfunctional power imbalance present for so long in the nonprofit sector has bred a crisis of confidence that keeps nonprofit leaders focused just on their own work, instead of seeing the larger picture and envisioning a larger solution or role in that solution.
The network approach to social change involves taking a big step back from the work you have always done. It requires asking a much larger set of questions. And having the faith, confidence and leadership to plug into the network for social change.
Photo Credit: Wikimedia
Note: As I mentioned earlier, I am taking a few weeks away from the blog to relax and reconnect with the world outside of social change. But I am leaving you in the incredibly capable hands of a rockstar set of guest bloggers. Next up is Kathy Reich. Kathy is Organizational Effectiveness and Philanthropy Director at the David and Lucile Packard Foundation where she helps grantees improve their strategy, leadership, and impact. Here is her guest post…
Philanthropy pundits often exhort nonprofits to “act more like businesses.” Usually I disagree; in fact, I think there’s a great deal that businesses could stand to learn from nonprofits.
In at least one area, though, I admit that all too frequently nonprofits lag their for-profit peers. Nonprofits simply do not invest enough time or money in talent assessment, development, and management.
Major national surveys provide a helpful snapshot of the nonprofit sector’s talent troubles. In the Bridgespan Group’s Nonprofit Management Tools and Trends 2014 survey, which polled almost 500 nonprofit organizations about their current management practices, nearly 60 percent of respondents agreed or strongly agreed that “hiring, training, and retaining staff is one of our greatest challenges.” Yet the survey found that only 40 percent reported using talent assessment and development tools, and just 38 percent said their organizations engage in leadership succession planning.
Similarly, in the Nonprofit Finance Fund’s 2015 State of the Nonprofit Sector survey, which included responses from more than 5,400 nonprofits nationwide, respondents were asked to name the top three challenges facing their organizations. “Ability to offer competitive staff pay and/or retain staff” was ranked in the top three by fully 25% of the respondents, behind only “achieving long-term financial sustainability” as one of the top three challenges facing nonprofits. Yet the same survey found that just 37 percent of respondents had invested money or time in staff professional development in the past year. Only 28 percent had given cost-of-living raises, and 18 percent had given raises beyond COLA.
At the Packard Foundation, program officers tell me that they see signs of this underinvestment almost every day. Some problems that our nonprofit grantee partners routinely report:
- Executive turnover is frequent, and often traumatic.
- Nonprofits have a hard time finding appropriate candidates for senior management roles, including CEO, program executives, development directors, and communications directors.
- The leadership many nonprofits have is not reflective of the leadership that they need, or the communities they serve. In most of the fields in which the Packard Foundation works, nonprofit leadership remains predominantly white, male, and middle-aged, even as our country becomes younger, more diverse, and hopefully, more committed to racial and gender equity.
- Emerging leaders under age 45 report high levels of career dissatisfaction, driven in part by lack of professional development and advancement opportunities. In a 2011 Young Nonprofit Professionals Network survey, only 36 percent of respondents said that their organization invested in “bench strength” to develop emerging leadership. Of that group, less than 47 percent said their organization implemented these investments effectively.
Nonprofits and foundations both have critical roles to play in ensuring that the nonprofit sector has a robust, diverse talent pipeline now and in the future. First, foundations need to step up their financial support for leadership. The private sector spends $12 billion annually, an average of $120 per employee, on developing leaders, investing in their management and technical skills so that they can move up the ranks or excel in their current jobs. In contrast, philanthropy’s investment in nonprofit leadership development totals an average of $29 per employee annually.
Foundations can do much more. Some concrete ways that they can help:
- Fund nonprofit overhead so that nonprofits have enough money to pay their people competitively and can have the operations in place necessary to support their staff and manage their talent. Depending on their size and talent needs, some nonprofits may need to hire a Chief Operating Officer, a Human Resources Director, or a Chief Talent Officer.
- Support nonprofits to develop “right-sized” performance assessment and management systems, as well as meaningful succession plans for key leaders.
- Include funds for staff professional and leadership development in project support grants.
- Incentivize nonprofits to develop cultural competency in hiring and management so that they can attract and retain diverse employees.
But foundations cannot tackle this issue alone. No matter what their size, nonprofit boards and executive leadership need to focus on talent issues and ensure they have appropriate plans in place to manage and develop staff for their organizations. They need to implement thoughtful, intentional strategies and process to ensure that they are identifying their own talent needs, assessing the strengths and growth areas of their staff, and providing ongoing development and feedback to all employees, particularly those with high growth potential. And they need to make the case for talent to their funders, along with concrete examples of how investing in leadership capacity will improve outcomes.
In the nonprofit sector, as in business, leadership matters. Let’s be sure we’re all investing our time, and our money, where it counts.
This spring I have been trumpeting the Performance Imperative, a detailed definition of a high-performing nonprofit released by the Leap Ambassador community in March. Today I continue the ongoing blog series describing each of the 7 Pillars of the Performance Imperative with Pillar #2: Disciplined, People-Focused Management.
With this second Pillar, the Performance Imperative obviously makes a distinction between “leaders” in Pillar 1, and “managers” in Pillar 2. There is a note in the Performance Imperative that “leaders” and “managers” are typically two separate people in nonprofits with budgets over $1 million. So this distinction, and perhaps this Pillar, applies only to larger nonprofits.
But I think there is actually application to any nonprofit. In any nonprofit there are leadership tasks (creating the vision, being the cheerleader, marshaling resources) and there are management tasks (making sure the trains run on time, putting each resource to its highest and best use). In smaller organizations both sets of tasks fall to the same person, yet they both still need to be performed well. So I think it behooves any size nonprofit to analyze whether they are BOTH leading and managing well.
Effective managers put organization resources to their highest and best use. They recruit, train and retain the right talent, they use data to make good decisions, they manage to performance, and they are accountable.
You can read a larger description of Pillar 2 in the Performance Imperative, but here are some of the characteristics of a nonprofit that exhibits Disciplined, People-Focused Management:
- Managers translate leaders’ drive for excellence into clear workplans and incentives to carry out the work effectively and efficiently.
- Managers…recruit, develop, engage, and retain the talent necessary to deliver on the mission.
- Managers provide opportunities for staff to see…how each person’s work contributes to the desired results.
- Managers establish accountability systems that provide clarity at each level of the organization about the standards for success and yet provide room for staff to be creative about how they achieve these standards.
- Managers acknowledge when staff members are not doing their work well…managers are not afraid to make tough personnel decisions so that the organization can live up to the promises it makes.
The Center for Employment Opportunities (CEO) is an example of how strong management is necessary to create a culture of high-performance. CEO employs people entering parole in New York State in transitional jobs at government facilities while helping them access better paying, unsubsidized employment. CEO Chief Operating Officer, Brad Dudding described to me how CEO management created, over the past 10 years, a culture and system of high performance.
Here is his story:
In the early years, CEO focused program performance on meeting individual contract milestones, not a set of unified organizational outcomes. They were proficient in collecting data and reporting it to funders, but did not use data to track participant progress, to make course corrections, and to manage to short-term outcomes.
In 2004 the Edna McConnell Clark Foundation provided CEO with a multi-year capital investment to:
- Create a theory of change as a blueprint for program intervention and outcomes measurement.
- Develop a performance measurement system to track progress toward those outcomes.
- Nurture a performance culture that uses data to understand program progress, build knowledge and correct performance gaps.
First, CEO management had to agree on a theory of change and the specific outcomes for which the organization would hold itself accountable. Next, management shared the theory of change with staff and demonstrated how each staff member contributed to its achievement through an all staff event, follow-up trainings and consistent messaging that the organization was entering an exciting period of change. CEO then adopted a new performance measurement system to reinforce the theory of change.
But reorienting the organization was not easy. Not everyone was ready to embrace a new culture of performance accountability and data tracking. CEO management was initially surprised by staff resistance and responded impatiently with compliance measures. Looking back, not enough time was invested in staff training and promoting the value proposition of new changes. At times it was an enormous effort to get front line staff to track and use data everyday to ensure participant goals were being met.
But the tipping point came when CEO promoted early adopters of the data system to management positions. These new managers were comfortable operating in a data-driven environment and holding others accountable to use data to track program participants’ progress. Once there was a group of strong managers in place, CEO’s performance culture started to take hold and program outcomes improved.
By 2010, CEO was managing to annual performance targets and short-term outcomes through staff’s real-time documentation and data analysis.
In 2012, the results of a three-year randomized control trial showed that CEO’s program resulted in a reduction in recidivism of 16-22%. But the evaluation also uncovered a need to improve CEO’s strategies for advancing long-term employment and for connecting individuals to the full-time labor market. In response, CEO created a job retention unit and developed innovative job retention strategies, including training programs and financial incentives for participants.
In 2013, CEO entered the New York State Social Impact Bond, the first state-sponsored transaction, through which CEO will serve 2,000 high-risk parolees in New York City and Rochester between 2014 and 2018. If CEO hits benchmarks and reduces the use of prison and jail beds by program participants, investors will be repaid their principal and will receive a return of up to 12.5% by the U.S. Department of Labor and New York state.
The tenets of a performance based culture — supportive leadership, disciplined managers, goal setting, data collection and analysis to track and improve outcomes — are now fully accepted by CEO staff and reinforced by management. CEO now has a highly developed system of tactical performance management, which allows the organization to know on a daily basis if it is delivering on its promise to its participants.
Photo Credit: Australian Paralympic Committee
In today’s Social Velocity interview, I’m talking with Linda Wood, Director of the Haas Leadership Initiative. Over the past decade, the Haas, Jr. Fund has invested over $20 million in strengthening the leadership of more than 75 grantees in its key priority areas– immigrant rights, education equity, and gay and lesbian rights—through the Flexible Leadership Awards program. In that time Linda has become a leading voice on the topic of leadership in the nonprofit and philanthropic sectors. Prior to joining the Fund, she advised senior leaders on strategy, organizational performance and change management at Cap Gemini Ernst & Young.
You can read past Social Velocity interviews here.
Nell: The Evelyn and Walter Haas, Jr. Fund has put a lot of investment behind the development of nonprofit leaders, but you are quite an anomaly in the philanthropic world. Support for leadership development is taken as a given in the for-profit world, but rarely recognized, let alone funded, in the nonprofit world. Why do you think there is that discrepancy in leadership development between the nonprofit and for-profit worlds?
Linda: It really is striking to see how differently the business sector and the nonprofit world view the issue of leadership. I went to business school myself, and spent eight years working as a management consultant in the private sector where it’s basic good practice to invest in the people you’re counting on to move the work forward. Strengthening leadership is seen as part and parcel of what it takes to fuel innovation and success.
On the other hand, in the social sector, a lot of foundations think of leadership development as a luxury–a nice-to-have that’s not linked to impact. That’s reflected in recent estimates that less than 1% of total foundation spending is going to strengthen leadership in the nonprofit sector.
Why? Well, I think we’ve got a lot of myths about leadership in our sector.
One myth is that leadership development is simply not a priority for nonprofit leaders because most don’t ask for it. And, when grantees don’t ask, many foundations assume that there’s no need. But we have not yet created a culture in the nonprofit sector that says it’s ok to invest in yourself and in other senior organizational leaders. We place a high value on self-sacrifice. Given the choice, nonprofit leaders will almost always direct general support to critical services and programs. That’s why actually I think it’s important for foundations to earmark funds for supporting leadership.
Another related myth is that leadership is part of overhead, and overhead should be minimized at all costs. From this perspective, investments in the organization’s leadership are cleaved off from the work and seen as wasteful overhead rather than intrinsic to achieving the organization’s goals.
Nell: You recently curated a blog series on the Stanford Social Innovation Review where funders who have supported nonprofit leadership development articulated its value. How helpful do you think that step was in getting the broader philanthropic community to understand the value of leadership investment? And do you have additional plans to help move leadership development forward among your peers?
Linda: Our goal in putting together the SSIR blog series was to help build momentum around the idea of investing in leadership being a core grantmaking strategy that can catalyze diverse programmatic goals and not just a boutique strategy that only some funders can afford. By featuring perspectives from top-level executives from a half dozen foundations of very different sizes and with very different funding priorities, ranging from the Omidyar Network to the Women’s Foundation of California, we hoped to offer examples that would inspire more foundations to see possibilities for their own work.
To be honest, it’s hard to know whether we are moving the needle. But it does seem like there has been mounting attention to philanthropic underinvestment in leadership lately. Just over the past couple of months GEO and then NCRP have both released major reports making the case for more attention to leadership and talent development. And the Talent Philanthropy Project held a meeting in New York in March that attracted over 60 people including nonprofit leaders, funders, consultants, and intermediaries.
I think the real question is whether increased interest will translate into significant increases in investment—the kinds of sustained, strategic investments in leadership that advance the capacity of organizations, networks and movements to achieve better outcomes. The danger is that we foundations will sprinkle a little leadership development funding here and there, perhaps send a handful of our grantee leaders to a training, and call it a day.
Nell: You recently announced a new initiative to seek solutions to the challenges, which you uncovered in your 2013 UnderDeveloped study with CompassPoint, facing nonprofit fundraising. What are your long-term plans with this initiative and what do you hope to find?
Linda: The UnderDeveloped report caused such a stir across the country. I have heard from so many people—funders, grantees, consultants, board members, etc.—that the report gave voice to concerns they’ve held for a long time. It clearly hit a pain point. And the big question it begs is what to do about it?
At the Haas, Jr. Fund, we’ve decided our next step is to try and refine concrete strategies that will help our grantees, and hopefully others, achieve breakthroughs in their fundraising.
One of our goals is to help organizations be more strategic about their approach to fund development. There’s so much out there. The nonprofit fundraising industry is full of consultants, speakers, large trade associations and technology providers. They offer costly, sometimes contradictory advice, patented approaches, one-off success stories, and a dizzying array of technology tools and platforms for raising money. As a result, our work in fundraising may be less about innovating and more about separating the wheat from the chaff, helping grantees chart a coherent, fruitful course through the thicket of possibilities.
Right now, we’re in the R & D phase. Here are some of the questions we’re exploring:
- What fundraising success stories can be replicated by our grantees? To answer this question, we will conduct “bright spots” research focused on small- to medium-sized organizations who have had sustained success with individual fundraising.
- How can we address the fundraising talent gap? To answer this question, we are conducting a scan of fundraising training and exploring the feasibility of a “fundraising fellowship.”
- One fund development approach that’s attracting attention is developing a “culture of philanthropy.” But what does that mean? And what difference does it make?
- Are there ways to help an entire field of grantees? To identify potential investments that might help a field of grantees, we are testing whether and how donor research can help LGBT grantees with fundraising.
As we tackle these questions, we are sharing what we’re learning along the way through a series of blogs on our website. And we’d love to hear from other people. What questions are missing? What can a foundation’s role be in supporting fundraising capacity?
Ultimately, this isn’t just an intellectual exercise. Our goal is to get better at supporting grantees around fund development, and to that end, we anticipate beginning to pilot some new strategies starting in 2016.
You asked what we hope to achieve with this work over the long term. I think if I could fast forward a couple of years, I would hope we will have made a dent in strengthening the talent pipeline for development directors, and that we are helping organizations bring more skill, focus and success to their fundraising, especially in tapping individual donors.
Nell: Philanthropy has traditionally been less interested in funding capacity building (like leadership development and fundraising). Do you think that’s changing? And/or do you think we will have more hope of changing that as generational shifts take hold in philanthropy?
Linda: Yes, I often feel like there’s a real divide between the folks in philanthropy who are focused on the what and those who are focused on the how.
Obviously, we’re all in this work for the what—to help create a more just and sustainable world. But often in philanthropy, conversations about things like capacity and leadership are disconnected from the conversations about the content of the work. We hold separate conferences; we belong to different affinity groups; we read different articles…
So, as someone who’s a member of the how club (as we sometimes jokingly refer to it among ourselves) I think we need to keep strengthening the connection between building leadership and capacity and delivering programmatic wins. No matter what a given foundation seeks to achieve programmatically–whether that’s community health, environmental justice or education equity–it’s important to ask how they will get from where they are today to where they want to be. What is our responsibility as funders to support the people and organizations who are advancing this work? What kind of staff, board and community leadership will be needed to get where we all want to go? And how can we transmit in words and in concrete actions that we are in this together and that we want to provide them with the resources to do their best work.
Photo Credit: Evelyn & Walter Haas Jr. Fund
As I mentioned last month, the Leap Ambassadors (of which I am a member) recently released the Performance Imperative, a detailed definition of a high-performing nonprofit. Because I think the Performance Imperative is so important and every nonprofit leader should understand it and begin to use it, today I am kicking off a series to describe, one-by-one, each of the seven pillars of the Performance Imperative.
I think the Performance Imperative is so exciting because it can serve as a north star to the nonprofit sector, helping organizations analyze their own performance and create a clear roadmap for improvement.
As Lowell Weiss, one of the leading architects of the Performance Imperative, explained in my interview with him last month:
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 Performance Imperative 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.
So, first up in this series on the Performance Imperative is Pillar #1: Courageous, Adaptive Executive and Board Leadership.
Without true leadership, at both the board and staff level, you will achieve little as a nonprofit. This pillar is about asking hard questions, pushing the organization toward excellence, continuously improving and taking nothing for granted.
You can read the full description of Pillar #1 in the Performance Imperative, but here are a few key elements present in nonprofits that exhibit this pillar:
- Boards “ask probing questions about whether the organization is living up to its promises and acknowledge when course correction is needed.”
- Executives and boards “know that great talent is a huge differentiator between organizations that are high performing and those that aren’t.”
- Executives and boards “know that they haven’t figured it all out and acknowledge that they still have a lot of work to do.”
- Executives and boards “are constantly assessing not only what the organization should be doing but also what it should stop doing…redirecting scarce resources to the highest opportunity areas.”
In other words, nonprofit leaders who embody Pillar 1 of the Performance Imperative, ask hard questions, build a stellar staff, seek continuous improvement, and put resources to their highest and best use.
There is no doubt that there are many examples of this courageous, adaptive leadership in the nonprofit sector. One of those, I believe, is Molly Baldwin, founder and CEO of Roca.
Molly founded Roca in 1988, and by 2004 it was a multi-million dollar teenage pregnancy and violence prevention program. But that year, Molly began asking some hard questions about the results Roca was achieving. She forced board and staff to take a huge step back and examine what they were doing and the ultimate effect that work had. She led her board and staff through a rigorous refocusing and pruning effort to limit their target populations and use data to drive their interventions. Instead of continuing a laundry list of services to many different populations that had limited effect, she helped her organization refocus resources on where they could create real change — transforming the lives of young men in the criminal justice system.
It was a challenging transition to lead, but the results are impressive. An internal study overseen by Harvard’s Kennedy School of Government in 2013 found that Roca reduced recidivism 65% and increased employment by 100% for the men in the program. And Roca was chosen as the lead provider in Masschusetts’ first pay for success effort.
Ten years ago Molly could have continued on Roca’s then current path, continuing to do “good work,” but failing to ask hard questions about whether that work was really resulting in change. But instead, Molly brought everything to a halt and forced board and staff to grapple with some fundamental and incredibly risky questions. In the end Molly’s leadership transformed Roca into an organization that is truly delivering solutions.
That’s the kind of social change leadership we need.
If you want to learn more, download the Performance Imperative and read additional case studies here.
Photo Credit: William B. T. Trego painting depicting George Washington’s army at Valley Forge.
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.”