It amazes me how many nonprofit leaders form their organizational strategy, their fundraising pitch, or their program model inside their nonprofit’s own walls. In order to be successful, you must understand the market in which you operate. And in order to understand it, you must go investigate it.
It is a simple fact that nonprofits must compete for funding, for clients, for volunteers, for staff, for board members, for mindshare, for policymaker will and commitment. So you must understand the market in which you work – what’s happening out there and how you fit in.
Ongoing market research can help you understand how your clients and potential clients think, what your funders want now and in the future, what your competitors and collaborators are doing and where they might be going, and how the very problems you exist to solve might be changing over time.
And there is another huge benefit to this data gathering — it forces you to expand and strengthen your network, because in the very act of finding out what’s happening outside your walls, you will forge new and deeper connections with others out there. So while market research should definitely be part of your long-term strategic planning process, it is also something you should continue to do on at least an annual basis.
Market research is where you test the assumptions baked into your work. You are seeking to find the answers to questions like:
- How are the efforts of other groups in our space changing over time?
- How are these other groups funded?
- What are their program delivery models?
- What are their plans for the future?
- Where are there opportunities for alliance?
- How do they define the social problems they are working on?
- What other social, technological, economic, demographic, political, regulatory shifts are happening outside our walls that might affect the problem(s) we are working on?
Of those people or groups you are trying to influence or benefit (like your clients) find out:
- What are the demographic (age, gender, race, ethnicity, income, etc.) characteristics of these groups?
- What are their psychographic (attitudes, interests, goals, etc.) characteristics?
- How can we best reach them and change their attitudes and/or behavior?
- What specific subsets of these populations can we have the greatest impact on?
- How might our various funding streams (government, earned income, private donations, etc.) change over time?
- What might our current or future funders want in the future?
- What appeals to them about our solution?
- What appeals to them about alternative solutions?
Before embarking on any market research, think through questions like these and figure out which are most applicable to your situation. This becomes your market research list.
Then determine how you will find the answers to those questions. Very few nonprofits can afford a comprehensive market study, so it will likely be up to your staff to do the digging. This can include activities like:
- Web research on your competitors, collaborators, funders.
- One-on-one interviews with current and potential funders, collaborators and competitors, experts in your field.
- Surveys of your current or potential clients, members, influencers, funders, volunteers.
- Review of existing research on the social issues on which you work.
And don’t assume that you will do this type of market research only once. Rather, you want to make it a regular part of operations (at least annually, if not more often), so it shouldn’t be overly burdensome. Make it easy and interesting for you and your staff to get beyond your walls and better understand the market in which you work.
Armed with new and ongoing knowledge about your market, you will be better able to design effective programs, attract additional support, articulate your nonprofit’s unique value, grow your network, and much more. So get out there!
Photo Credit: Ministry of Information Photo Division Photographer, Wartime Social Survey
The other day I was talking with a nonprofit leader and was suddenly struck by how much his story echoed so many of the stories I hear from nonprofit leaders.
See if your nonprofit fits some or all aspects of the scenario he faces:
- His board is passionate about the mission and wants to be helpful, but they don’t really contribute much to the financial model.
- His staff and board want to expand services, but they can’t grow their budget past where it has been for years.
- Their funding is fairly dependent on just a couple of sources.
- Their funders support specific projects, rather than the organization or mission as a whole.
- Their strategic plan hasn’t been updated in 5 years.
- The board worries whether some of what the nonprofit does duplicates other efforts out there.
- Board and staff don’t have a common way to articulate what the nonprofit is and does.
- Their nonprofit is just barely getting by and has no cash reserves.
They, like so many nonprofits, are stuck in a rut.
They want to accomplish something much bigger and better but continue to spin their wheels against what they have always done. It’s really a chicken or the egg scenario. A nonprofit is unable to grow their services, their board, and their supporters because the organization has limited resources. And so they keep soldiering on, same as it ever was.
But let’s face it folks, in times like these, the status quo just isn’t going to work anymore.
Luckily, there is a way out.
When I encounter a nonprofit leader like the one above who has a real desire to break out of this pattern, I suggest a Financial Model Assessment. A Financial Model Assessment analyzes every aspect of the organization (Mission, Vision, Strategy, Program Delivery and Impact, Staffing, Board, Marketing, External Partnerships) in order to understand how each element helps or hurts their financial sustainability and their ability to achieve results. It then analyzes all current and potential revenue streams to find opportunities for sustainable growth. Finally, the Assessment gives very detailed recommendations for creating a more effective and sustainable organization.
I am a firm believer in a holistic approach. You simply cannot bemoan a lack of financial resources and call it a day. You must dig deep and figure out how everything you do contributes to or detracts from your current reality.
But because nonprofit leaders are usually consumed by putting out fires and worrying when the next check will come, they don’t have the ability to take a big step back and figure out how all of the pieces can and should fit together. So a Financial Model Assessment allows a nonprofit board and staff to understand what is holding their organization back from becoming financially sustainable AND achieving more mission-related results.
Once I’ve written my final Assessment, I lead a change discussion among board and staff. We delve into the Assessment and discuss how and why I came to the conclusions I did. This is often a galvanizing moment for the nonprofit — a moment when board and staff finally understand together a way forward that can allow them to be smarter, more strategic, more sustainable and ultimately achieve more results.
If you are interested in big change and need help navigating how to get there, download the Financial Model Assessment Benefit Sheet that describes the process in more detail. And if you’d like to read about other nonprofits who undertook a change process, check out these case studies.
Photo Credit: Public domain via Wikimedia
In 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:
- A community forms around a common goal
- The community mobilizes resources
- The community finds solutions (what I call “fourth options”)
- 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
One 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:
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.
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
Because I talk about change in the nonprofit sector a lot, I sometimes get inquiries from nonprofit leaders who think they want change at their organization, but actually don’t.
A nonprofit leader might be excited by the idea of dramatically improved fundraising results, or a board who is engaged and invested in the work, or funders who want to step up, but she isn’t willing to do the hard work to realize that change.
I recently talked with a nonprofit leader who was interested in a Financial Model Assessment because he was intrigued by the idea of potential revenue increases. But when I explained that realizing those changes might necessitate other changes — like how he structures his staff, how involved in decision-making he allows the board to be, even how he crafted their long-term strategy — he began to balk.
But the fact is that you simply cannot expect a different result if you continue to operate in the exact same ways.
When I work with a nonprofit organization, my role is to lead a change process so that when I leave, the organization is more sustainable, more engaged and engaging, more strategic and integrated, and ultimately more effective at creating social change.
But significant change is not easy. And for it to truly come to fruition it requires that the nonprofit leader must fully commit — and get her board and staff to fully commit — to creating real, lasting change.
The nonprofit sector is sometimes criticized for being too stuck in its ways. And indeed it can be hard to create change amid a sector that is so consensus-based. Sometimes even the smallest decisions must involve discussion among staff, the board, even funders and other stakeholders.
So if you really want the reality that your nonprofit faces to be different, if you want to find greater financial sustainability, if you want to achieve more program results, if you want to attract more and bigger funders, if you want a stronger, more effective board, you have to commit to real change. And then you have to get others at your organization to commit to real change as well.
I can often tell the difference between a nonprofit leader who is just playing at change, and one who is actually committed to doing the hard work. Ask these questions to determine if your nonprofit is truly ready for meaningful change:
- Are we willing (at every level of the organization) to take a hard look at how we operate and make changes where behaviors or systems no longer make sense?
- Are we willing to have difficult conversations, perhaps on formerly taboo topics, in order to find a better way forward?
- Are we excited enough by the potential rewards of change to work hard to convince skeptics (on the board and/or staff) to come along?
- Are we as an organization willing to invest the time (and patience) in a change process that could take months or years to fully realize?
- Are we willing to open everything we do as an organization to discussion and analysis?
If you can find a critical mass of board and staff members who can answer yes to these questions, then your nonprofit is a candidate for true change and a more effective and sustainable path forward.
Because change is really hard. But with effective, meaningful change can come great reward.
Photo Credit: Pat Ronan
One of my favorite parts of my job is the time I spend working one-on-one to coach nonprofit leaders. One of my clients jokingly refers to our coaching sessions as “nonprofit therapy.”
While we certainly don’t delve into psychology when we meet, it is, I think often cathartic for nonprofit leaders to have an impartial third party who can listen to their frustrations with a disengaged board, understand the loneliness of leadership, appreciate their dismay with funders who are pulling them in too many directions, empathize with their fear that fundraising goals won’t be met.
We all — every single one of us — need someone in our lives who understands the challenges we are facing and can offer some guidance, new ideas, insights that can move us from a rut to a more productive path.
When I start a coaching session with a nonprofit leader, I often ask some key questions to get us moving forward:
What is the biggest thing bothering you right now?
Sometimes nonprofit leaders are so stuck in the weeds, so overwhelmed, so exhausted, or so alone that they cannot pinpoint one issue, let alone figure out a way forward. So I start by encouraging them to just unpack everything. This will often result in a venting session, and that’s completely fine. Letting off steam is absolutely crucial. And nonprofit leaders have very few confidants with whom they can share those struggles. Since a nonprofit leader always needs to put on a brave face to her staff, her board and her funders, she has very few people she can tell the bitter truth, so that’s a big part of my role.
How can we prioritize these challenges?
While it might be tempting, we cannot stop with venting. Once we’ve made a list of the challenges, frustrations and concerns a nonprofit leader is facing, I help her to prioritize those challenges in terms of the biggest threats and their dependence on other things to be resolved. So for example, a nonprofit leader who is struggling to meet her fundraising goals, is frustrated by an ineffective board, and lacks enough staff must analyze how large a threat each of those issues is related to the others, and which are dependent on the others to solve. It may be that kicking the board into gear might help alleviate the other two problems because if the board can start helping bring money in the door, she can better address her fundraising goals which leads to her ability to add additional staff.
Where can we tap into your existing assets?
But how do you do that? As I’ve said, nonprofit leaders are often very isolated and think it is all up to them. But if a nonprofit leader can think strategically about who might be able to help, he can move forward more effectively. A nonprofit leader who is struggling without enough staff and is challenged by his ineffective board could potentially find an ally or two among his board and/or funders. I help a nonprofit leader to think through potential allies who can help overcome a hurdle. A one-on-one conversation with a quiet, but well-respected board member about the specific challenge a nonprofit leader faces may yield that board member’s support and voice toward bringing the rest of the board around. Similarly, identifying one or two funders who could be convinced of the need to invest in capacity-building could yield additional staff and infrastructure to overcome those challenges.
I firmly believe that there is a solution to every challenge a nonprofit leader faces. But in order to get to that solution, a nonprofit leader must be willing to analyze the problem and think strategically and creatively about how she can solve it.
If you want to learn more about the nonprofit leader coaching I provide, download my Coaching benefit sheet. And if you want to learn more about being a strong nonprofit leader, download the Reinventing the Nonprofit Leader book.
Photo Credit: Vinoth Chandar
I recently received a note from a blog reader who disagreed with my argument that a nonprofit’s board of directors should be charged with raising 10% of their nonprofit’s budget. Not only did this reader disagree with the idea of setting a 10% board fundraising goal, but he disagreed with linking board governance and fundraising at all.
As he wrote:
“I recently resigned from a board of a nonprofit, after a 5-year stint. I was honored to be asked to join the board, until at my first meeting pledge cards were passed around, and I realized it was my money, not my leadership skills, that qualified me for board membership. I have given on numerous occasions, but I refused to pay a “bill” I received for my share of employee Christmas bonuses last year. There have been many instances where the board was expected to give money. Only a tiny fraction of the budget would be raised through these measures, so it seemed like it was a membership test. Governance should be totally separate from fundraising.”
While I appreciate this reader’s frustration as a board member, I would argue that his unfortunate experience had more to do with poor management of a board, and less to do with fundraising being part of a board member’s charge.
I don’t believe board members should ever be “billed” for a contribution. Rather, the board chair and the executive director should sit down with each board member individually on an annual basis and have an open conversation about that board member’s role on the board. This should be a much larger conversation than just what she wants her annual financial commitment to be, but that still must be part of the conversation. So while you absolutely should discuss why the board member has chosen to serve on your board and what she would like her role to be, you also can (and should) discuss how she wants to contribute to the financial model of the organization.
And if you define a board member’s “contribution” much more broadly than just a check she writes, the sum total of all of the contributions each board member makes can be much more significant than “a tiny fraction of the budget.” Every single board member, if truly right for the post, has many ways to contribute to the financial model of a nonprofit (here is just a beginning list of ways). If you ask board members to think strategically about how they can contribute, and if they are well versed in the financial model of the organization they serve, it should be fairly easy to get them involved in a significant way.
And getting each board member engaged and involved in the organization should be the aim. While I agree that the idea of a “membership test” is certainly unappealing, there should be a bar to being a member of the board of a nonprofit organization. If some members are allowed to be members in name only, but not required to have any skin in the game, then what compels any member to invest their time and resources in a significant way? If there is no bar that a board member must clear to be a board member, then what separates a board member from just an interested member of the public?
A board of directors must be a nonprofit’s staunchest supporters, most vocal advocates, and most committed allies. If a nonprofit cannot depend on its board to work tirelessly, not only to ensure achievement of the mission, but also to ensure financial sustainability, how can a nonprofit possibly expect those outside the organization to care? So, yes, being a member of a board must come with some level of commitment, both of time and of resources.
Because at the end of the day, there is no mission without money. By allowing any individual board member, let alone your entire board, to make programmatic and organizational decisions without fully understanding and contributing to the financial model of the organization you are creating an enormous disconnect between mission and money. A person cannot hope to understand something unless they have actually worked within it. So each board member must somehow contribute to the financial model of the nonprofit on which they serve.
Just because nonprofit leaders sometimes do a poor job of engaging their board in the financial model does not mean that we should separate the governance of a nonprofit from its financial model. All board members must understand, embrace, and actively work toward the financial sustainability of the nonprofit they govern.
Photo Credit: Susana Fernandez
One of the biggest complaints I hear from nonprofit leaders is that their board is not working well enough for them — most often around fundraising. From board members who are largely in name only, to others who refuse to fundraise, to those who meddle or micromanage, to those who don’t understand the organization or its programs, there can be a large list of grievances that nonprofit leaders have about their board. So nonprofit leaders often look for a magic bullet to get their board in gear.
Just last week a nonprofit leader approached me seeking help getting her board engaged. She thought that if she hired a consultant to rewrite their board by-laws and rework the board committee structure, all would be well.
But it just isn’t that simple.
An ineffective board is often just a symptom of a larger problem at your nonprofit. And while nonprofit boards can be incredibly frustrating, it is often not their fault that they aren’t working harder for you.
If you are frustrated with your board, ask these questions to uncover the larger issues at play:
Do We Have a Compelling Case?
You simply cannot get people excited to help further your nonprofit’s cause if they don’t fully understand and embrace that cause. Have you had a conversation with your board about why your nonprofit does the work it does? Have you articulated together your nonprofit’s Theory of Change? Have you involved your board in creating your nonprofit’s Case for Investment? It surprises me how often I see nonprofit leaders leaving these critical and investing conversations at the staff level. The number one way to get your board excited about your work is to get them involved in articulating to others why that work is so critical.
Do We Have a Long-Term Strategy?
But it’s not enough to articulate what you hope to accomplish as a nonprofit, you also need to create a strategy for bringing those goals to fruition. You must involve your full board in your nonprofit’s overall strategy. They must buy in at the ground level to the goals of your strategic plan. And then the board must be in charge, as is their true leadership role, in monitoring in their ongoing board meetings whether those goals are actually being realized. Give your board the opportunity to create and then drive the overall organizational strategy, and then see how they start to come alive.
Do We Have Clear Board Responsibilities?
And they will truly come to life when they understand how each of them individually can and must contribute to bringing that larger strategy to fruition. You simply cannot expect a board to engage when they don’t understand how and where they can be helpful. Give the overall board specific goals and responsibilities and then talk one-on-one with each individual board member to determine together where their unique skills and experience can be brought to bear on the larger strategy. With a clear roadmap for how they can help, you will see your board start to pick up the pace.
Do We Have the Wrong Board Members?
However, you may find that some of your board members are simply taking up space. It may be that some are disengaged because they simply don’t have the skills, experience and networks necessary to achieve your goals. That’s why you have to do the analysis and look at every single board member against the skills, experience and networks you need to deliver on your strategic plan. Please, please, please don’t fall for the temptation of filling your board with warm bodies. Make sure that you are recruiting the type of board members that you truly need to deliver on your organization’s strategy.
Are We Afraid of Asking For What We Really Need?
Nonprofit leaders sometimes fear their board members as much as they fear their donors. Rather than insisting their board members step up to the plate and effectively contribute their time, energy, and resources, nonprofit leaders may be overly grateful for ineffective board members. But when you operate under that dysfunctional power imbalance, you are setting the bar incredibly low for your board. And when a person is confronted with a low bar, there is nothing compelling him to get engaged and get working. So be very clear with your board members about what you want from them, and then be equally clear when they aren’t delivering. There is a nice way to tell a board member that you need more from her. And if she isn’t willing, then it is probably best that she walk away and leave room for more effective board members.
If you are fed up with your board, use frustration as an opportunity to dig deeper to figure out what is really causing their uselessness. And if you need some help to get there, check out the nonprofit leader coaching I provide.
Photo Credit: Peter Alfred Hess