nonprofit strategy

How Founder’s Syndrome Hurt the Komen Foundation

Last week’s stunning PR nightmare at the Susan G. Komen Foundation is a textbook example of how not to run a nonprofit. Komen decided early last week to pull all funding from Planned Parenthood and then went radio silent in response to an increasingly angered social media network. Finally they flipped their original decision while firing the anti-Planned Parenthood vice president for public policy, Karen Handel.

Komen’s PR response was woefully inadequate, their social media efforts were non-existent compared to Planned Parenthood’s, and their board decision-making process was flawed. And all of this follows their brand-busting decision last year to partner with KFC.

Obviously, the organization is not making good decisions.

But few people are placing the blame for these missteps where it should probably go, at the top. Karen Handel herself argued that she wasn’t the only decision maker, “I clearly acknowledge [my role] in the process, but to suggest I had sole authority is just absurd. The policy was vetted at all appropriate levels.”

I wonder if Komen isn’t suffering from classic founder’s syndrome. Founder’s syndrome is when the original founder of a nonprofit (or a leader who has been there for a very long time) creates a culture where:

Power and influence all reside within the single founder
The brand of the organization is inextricably linked to the personality of the founder
Staff are powerless to speak up and be heard when they disagree with certain decisions
The board of directors merely rubber stamps founder decisions and have no real authority over and provide no strategic direction to the organization
Decisions are rarely tested or debated

Komen was founded by Nancy Brinker when her sister, Susan G. Komen, died of breast cancer in 1982. For such a massive organization (a 2010 budget of $400+ million), the Komen Foundation only has 9 board members, most of whom are friends or family of the founder . The organization’s structure and behavior have all the signs of classic founder’s syndrome.

In a healthy nonprofit environment, staff are allowed (even encouraged) to push back, ask hard questions, have their dissenting opinions heard. And the board of directors has the ultimate strategic and fiscal authority for the organization. As a group, they debate and grapple with big strategic decisions. And, as a group, board and staff together are charged with achieving the mission.

When founder’s syndrome is present it can spell trouble for a nonprofit. Far beyond the PR nightmare we have witnessed the past week with Komen, founder’s syndrome can fundamentally weaken an organization. It can make the organization’s funding and brand name overly reliant on one person. It can cause a lack of critical and innovative thinking. Ultimately, it can mean that the organization becomes less about social impact and more about the personality of the founder.

What has played out with the Komen Foundation over the past few months should be a cautionary tale for other nonprofits. To be strong, effective, innovative and sustainable, a nonprofit must encourage a culture of group ownership. It remains to be seen if Komen learns from their mistakes, but at the very least perhaps other nonprofits can.

Photo Credit: Jeffrey

Tags: Karen Handel, Komen Foundation, Nancy Brinker, nonprofit board of directors, nonprofit founder's syndrome, nonprofit strategy, Susan G. Komen Foundation

Wednesday, February 8th, 2012 Board of Directors, Fundraising, Leadership, Nonprofits, outcomes, Planning, Roadblocks, Social change, social media, Strategy 3 Comments

Do You Understand Your Nonprofit’s Place in the Market?

Until recently, market research, or understanding the marketplace in which a nonprofit operates, had no place in the nonprofit sector. Once the sole purview of entrepreneurs and corporate brands, market research is quickly (and rightly) becoming a skill set that nonprofits must embrace. Because in an increasingly competitive landscape, if you don’t understand the needs of your clients, who else is addressing those needs, what your funders are looking for, who else they are funding, where policy makers and decision makers are moving, you are sunk. But for many nonprofit leaders market research seems nebulous, inaccessible and expensive. It doesn’t have to be.

Here’s how you can start to wrap your head around market research.

The first step is, with board and staff, to map the marketplace in which your nonprofit operates. A nonprofit is best positioned where their core competencies (those organizational assets they have that cannot be easily taken or replicated) intersect with a community need, apart from where their competitors or collaborators are strongest. Which looks like this:

The idea is that if a nonprofit organization can figure out what part of the solution to a social problem they offer and how that relates to the piece their competitors or collaborators have to offer, then the nonprofit can (for a start):

Better articulate to funders what their nonprofit is uniquely positioned to accomplish
Forge partnerships with organizations who supplement weaknesses the organization has
Stop wasting resources on “doing it all” and focus on the 1-2 things they do exceptionally well
Reduce competition for funding
Chart a sustainable future direction

But it is not enough to simply ask board and staff where they think your nonprofit fits in this map. Once they’ve taken a stab at it, you need to get out into the marketplace and see if that assessment holds true. This is where market research comes in. You need to understand current and future trends in your competitors/collaborators and the community need you are trying to address. So you need to find the answers to questions like:

Is the need within your client population expanding or contracting? In what areas? Why? What does the future hold?
How else are your clients getting these needs addressed or not addressed?
What is the future strategy of your competitors and collaborators?
What are the core competencies of your competitors and collaborators?
Are there new competitors/collaborators entering the space?
How do key decision makers (policy makers, funders, etc) feel about your competitors/collaborators? What do they think your role in addressing the problem is?

So how do you go about finding these answers? You can call current funders, friends or other connections and ask them to give you a lay of the land. But you also need to pull some data. And there are lots of free resources out there. Here is a beginning list of things to try:

Check out these free market research tools
Ask your local reference librarian for help
Use the many free databases available at public and university libraries
Use SurveyMonkey (or other free/cheap survey tools) to ask clients, funders, volunteers what they think
Ask a market research class at a local college or university to practice their new skills for free on your organization

There really is no excuse for nonprofits not to explore the market in which they operate. The information is out there, you just need to go out and get it. And if you don’t, you will be moving forward in the dark.

Photo Credit: HikingArtist.com

Tags: nonprofit competition, nonprofit competitors, nonprofit market research, nonprofit marketplace, nonprofit strategy, nonprofit surveying, strategic planning

Friday, January 20th, 2012 Capacity Building, Economy, Financing, Fundraising, Nonprofits, Planning, Roadblocks, Strategy 2 Comments

5 Nonprofit Trends to Watch in 2012

My annual predictions for the coming year are probably a bit more wishful thinking than actual prediction. It’s hard to say if my predictions for 2011 became a reality for the sector as a whole. But I am ever an optimist and continue to think that the nonprofit sector is getting smarter, more effective, and better able to create real, lasting change in our communities. I truly believe that our challenging economy offers nonprofits a real opportunity to reinvent themselves.

So here are my predictions (hopes) for what the nonprofit sector will move towards in 2012:

More Open, Engaging Organizations
Smart nonprofits are getting better at engaging armies of supporters. In order to do that, they have to cede some control. Nonprofits that can allow volunteers, donors and advocates to engage their friends in their own way will unleash a growing army of support for their organizations. Those nonprofits that continue to control the message and the method, that only engage their donors when they need money, and ignore the increasingly networked world will wither on the vine.

Smarter Boards
I am an endless optimist when it comes to nonprofit boards of directors. Boards are, for the most part, dysfunctional, but I believe that they are getting smarter and more effective. I think boards will start asking more and better questions, increasingly put themselves to their highest and best use, focus more on strategic issues as opposed to day-to-day tasks, empower their staff leadership to take the organization in more innovative directions, and start putting their money (and their networks) where their mouth is. Because this new harsher environment absolutely necessitates a smart, strategic, innovative board.

More Honest Communication Between Nonprofits and Their Donors
Oh yes, I do, I do believe it. The nonprofit sector’s proclivity to endlessly beat around the bush, tell donors what they want to hear, and sugar-coat the truth will start to wane in the new year. Because the reality is that a severely under-resourced nonprofit sector is the new normal. That truth is harder and harder to hide. Nonprofits need more money for infrastructure, more and better staff, technology. And they need their donors to step up to the plate and fund it. Those nonprofits that continue to fear their donors will continue to struggle. Those that take the leap and tell donors how it is, how it REALLY is, will propel themselves out of the starvation cycle.

More Strategic Approaches to Solving Social Problems
It’s increasingly meaningless for nonprofits to talk about the “good work” they do. In order to attract donors, nonprofits must be able to articulate what they do and how it results in change. This necessitates an overall strategic approach to their work. From creating a theory of change, to developing on a comprehensive strategy, to raising the money required to execute on that strategy, to aligning money and mission, to evaluating their efforts, to translating their evaluation into a compelling story, nonprofits have to get more strategic. Those organizations that take a step back and create, and fully integrate their organization into, a long-term plan will be much more successful and sustainable.

More Financed Nonprofits
As part of this more strategic approach, nonprofits will (must) move towards a broader, more strategic approach to funding their work. They will realize that the hamster wheel of chasing receding dollars in a scattered approach just isn’t going to cut it anymore. As the fundamental economic restructuring that we are currently experiencing continues, nonprofits must create a financial model for their work. The financial status quo just will no longer work in the nonprofit sector.

I’m not a fortune teller, but I am an optimist. I have tremendous hope for our great nonprofit sector. We may be in the depths of an on-going, structurally transformative recession, but it in no way is the death knell for the nonprofit sector. It is simply an opportunity for nonprofits to get smarter, more honest, more open, more strategic, and more sustainable. And that’s exciting.

Photo Credit: riptheskull

Tags: Board of Directors, capacity capital, challenging economy, nonprofit donors, nonprofit fundraising, nonprofit predictions for 2012, nonprofit strategy, nonprofit trends, Philanthropy

Thursday, December 15th, 2011 Board of Directors, Capacity Building, Economy, evaluation, Financing, Fundraising, Innovators, Inspiration, Leadership, Nonprofits, outcomes, Philanthropy, Planning, Social change, social media, Strategy 7 Comments

A Monster List of Social Innovation Books, Blogs, Conferences, Funders

Since today is Halloween, I thought I’d offer a monster list of resources for nonprofit leaders, social entrepreneurs, philanthropists, board members and others involved in creating social change.

The following list comes from the Resources page of the Social Velocity web site. The page includes social innovation conferences, organizations, funders, blogs, books and other things that anyone involved in the social change space should be aware of. It could be a starting point or an ongoing exploration of what’s going on in the space.

We are constantly adding to the Resources page, so if we are missing something, let us know in the comments.

Organizations Moving Social Innovation Forward

Funders

Conferences

Philanthropic Thought Leaders

Things to Read

Blogs

Financing Impact

Using Social Media

Being Strategic

Finding Inspiration

Growing Solutions

Leading Well

Photo Credit: annabellaphoto

Tags: funding for social entrepreneurship, nonprofit, nonprofit financing, nonprofit funders, nonprofit leadership, nonprofit strategy, Philanthropy, social change funders, Social Entrepreneurship, social entrepreneurship conferences, social innovation, social innovation blogs

Monday, October 31st, 2011 Capacity Building, Financing, Fundraising, Innovators, Inspiration, Leadership, Nonprofits, outcomes, Philanthropy, Planning, Roadblocks, scale, Social change, Social Entrepreneurship, social media, Strategy, Venture Philanthropy 10 Comments

What Nonprofits Can Learn From Netflix

Even if you aren’t a subscriber to Netflix (the DVD and online streaming video service) you have probably heard about how their bad decisions have cost them thousands of customers in recent months. Although a nonprofit might seem worlds apart from Netflix, there is still much to be learned from their debacle.

Unlike for-profit companies that have only one customer group, nonprofits actually have two. First are those customers to whom nonprofits provide services — their clients. For a homeless shelter these “customers” are their homeless clients. Their second customer group is those who pay for the services — their funders. So for nonprofits, customer management is much more complex. I would argue that nonprofits generally do a good job of understanding and taking care of their client customers. But their second customer group, funders, can sometimes get lost in the shuffle.

Which makes the lessons from Netflix even more important. Here’s what Netflix teaches us about taking care of your supporters:

Listen to Your Supporters
Netflix assumed that their customers were so in love with their services that a 60% price hike wouldn’t phase them. When customers flooded the Netflix blog and took to Twitter to complain, Netflix largely ignored their customer’s anger. Then Netflix was shocked when customers started leaving in droves. Organizations make mistakes and will at times irritate their customers, the trick is to listen to your customers and quickly correct any missteps. This is particularly important now that social media is so prevalent and is often the first place people go to vent about an organization. Listen to your funders, volunteers, supporters and other community advocates wherever they are and respond to their feedback, concerns, ideas. Don’t build walls around your nonprofit and ignore the outside world. Meet people where they are talking about you and listen and engage in a conversation with them.

Understand How Your Supporters Tick
It’s not enough, however, to simply listen to your customers, you have to understand what they want and need. Netflix assumed that separating DVD rentals from online video streaming was no big deal to customers. Boy were they wrong. The introduction of Qwikster, a separate DVD-only service from Netflix, threw an already angered customer base into a tailspin. Netflix failed to understand how their customers operate. Having two separate websites, two separate passwords and two separate queues for movies was completely untenable to their customers. As a nonprofit you have to understand how your supporters operate and what makes them tick. What about your mission and programs appeals to your supporters? How do they want to be involved? Invest some time in getting to know your donors, volunteers, board members, friends, advocates and what makes them passionate about your nonprofit, how best to engage them, what they’d like to do to support the cause, and how to make it easy for them to do so.

Acknowledge That Your Supporters Ultimately Run Your Business
Netflix forgot that their customers run their business. Without customers, there is no Netflix. Similarly for nonprofits, you may like to think that you exist solely to achieve your mission, but you have no mission without a way to fund it. You cannot separate your mission from how you financially support it. You need to take a step back and understand what types of funding and funders your mission would appeal to (Is your organization a good sell to individuals? Is there an opportunity for school or other government contracts? Is earned income an option?) and then develop a plan for going after and sustaining those funders.

Figure Out a Viable Business Model
Netflix used to have a very viable, profitable business model. But movie studios have realized that there is more money to be made in content, so their financial demands on Netflix have increased dramatically. Which pushed Netflix to increase customer prices. Now Netflix’s business model is out of whack. I’m not a media content expert, so I have no idea what a viable business model is for Netflix, but I don’t think they do either. The trick is to figure out how to get revenue and expenses to create a net positive. For nonprofits, the same is true. Funders will be more likely to support a viable entity with a bright future. Get your financial house in order by aligning your mission with a way to bring sustainable money in the door and funders will be more likely to support you.

Netflix’s missteps have almost been painful to watch. But watch we must if we are going to learn how to avoid their pitfalls. Whether you run a for-profit or nonprofit organization, you must be ever-cognizant of your customers and constantly work to fully integrate them into a successful, viable financial model.

Tags: individual donors, Netflix, nonprofit earned income, nonprofit funders, nonprofit fundraising, nonprofit strategy, Philanthropy

Wednesday, October 26th, 2011 Earned Income, Financing, Fundraising, government, Individual donors, Nonprofits, Planning, Roadblocks, social media, Strategy 7 Comments

Better Strategy for Educational Entrepreneurs

I’m delighted to announce that a book I wrote with Peter Frumkin, head of the RGK Center for Philanthropy and Community Service at the University of Texas at Austin, and Bruno Manno, senior advisor for K–12 Education Reform at the Walton Family Foundation, has just been published by Harvard Education Press. The Strategic Management of Charter Schools: Frameworks and Tools for Educational Entrepreneurs looks at charter school case studies and applies management tools (like SWOT analysis, customer satisfaction surveying, balanced scorecard) to analyze what these schools could have done to be more successful. While the book focuses on charter schools, the tools and frameworks can easily be applied to any nonprofit organization.

Organized around three crucial challenges to charter school leaders—managing mission, managing internal operations, and managing the larger stakeholder environment—the book provides charter school leaders with tools and insights for achieving educational and organizational success. In its description of these managerial challenges, and in its detailed examinations of particular schools, the book offers a clear, credible approach to the efficient and sustainable management of what are still young and experimental educational institutions.

Frederick M. Hess, director of education policy studies at the American Enterprise Institute, says of the book:

The importance of this volume lies not in the prescription of best practices but in the strategic ‘toolbox’ of skills and frameworks that the authors share. For providers seeking better ways to promote both growth and quality, this book will prove invaluable. For policy makers, parents, philanthropists, and educators seeking to understand how to help charter schooling deliver on its promise, this volume will prove an invaluable resource. Finally, the authors’ savvy suggestions for aligning mission, institutional operations, and stakeholders offer a strategic vision that holds promise not only in the charter sector but also for those in traditional district schools.

Again, although the cases are all related to charter schools, the lessons and insights can and should be used by any nonprofit leader. From better financial management, to stronger mission alignment, to more accurate understanding of the needs of your various constituents, to more effective leadership, this book helps social change leaders create stronger, more effective organizations that will ultimately result in greater change.

You can learn more about the book here.

Tags: Bruno Manno, charter schools, Frederick Hess, nonprofit balanced scorecard, nonprofit management, nonprofit strategy, Peter Frumkin, RGK Center for Philanthropy, Strategic Management of Charter Schools, SWOT Analysis, Walton Family Foundation

Friday, August 19th, 2011 Capacity Building, Financing, Fundraising, Innovators, Leadership, Nonprofits, Philanthropy, Planning, Roadblocks, scale, Social change, Strategy No Comments

The Dire Consequences of Poor Nonprofit Strategy

There was a really interesting article in the Wall Street Journal recently about the New York City Opera that dramatically illustrates how critical a nonprofit’s strategic alignment of mission, money and competence is. I’ve written before that for a nonprofit to be truly effective and sustainable, three things must be aligned:

Their mission, or reason for existing
Their core competencies–what they do better than anyone else in the world, and
Their revenue engine–all the ways in which they sustain themselves financially

So that an organization, in alignment, fully integrates and gives equal weight to those three elements. Those nonprofits not in alignment eventually suffer the consequences, which can sometimes be quite dire, as is the case with the New York City Opera (NYCO).

Once a shining star in New York City’s performing arts world, NYCO has fallen on financial hard times, requiring them to move out of their Lincoln Center home and dramatically scale back their performance calendar this year. The NYCO chorus and orchestra are so upset about the situation that they have held a protest. What a nightmare.

In the 68 years of its existence, NYCO’s mission statement has been clear, succinct and captivating: “The People’s Opera.” However, in recent years, the organization has struggled to align its core competencies and revenue engine around that compelling mission. In 2008 Gérard Mortier, the NYCO general manager and artistic director, canceled NYCO’s 2008-09 season while Lincoln Center was under construction. And the following season, after Mortier quit, NYCO scrapped their planned season and staged a selection of unpopular productions that flopped. The result is that NYCO has lost its audience, lost its revenue, and lost its way.

At the same time, NYCO’s competitor, the Metropolitan Opera, has transformed from a very conservative opera house into a media-savvy, artistically adventurous opera company that trains its own new singers instead of relying on NYCO to develop upcoming stars. All of this leaves the Wall Street Journal to ask, “New York already has one major opera company. Why does it need two? If [NYCO] can’t come up with an answer to that question, then New York City Opera is doomed—and deserves to be.”

Harsh, but true. NYCO is faced with a critical inflection point. They can either figure out how their mission should adapt to their core competencies (what they do better than the Metropolitan Opera) and develop an integrated revenue strategy around that mission and those core competencies, or they need to close up shop.

The reality is that NYCO isn’t alone in this dilemma. It is becoming increasingly difficult to survive these days. Growing competition from nonprofit and for-profit solutions, decreasing funding available, and the advent of new technological channels to reach customers, clients, and funders means that now more than ever nonprofits need to find alignment. They must constantly be analyzing whether their mission, money, and competencies are working in tandem to create an effective, sustainable organization that brings value to its community. Because to ignore alignment is to eventually wake up to the heart-wrenching decision NYCO now faces.

Photo Credit: NYCO website

Tags: Metropolitan Opera, New York City Opera, nonprofit alignment, nonprofit case study, nonprofit financial sustainability, nonprofit mission, nonprofit strategy, NYCO

Thursday, July 14th, 2011 Economy, Financing, Fundraising, Nonprofits, Planning, Roadblocks, Strategy 2 Comments

The Problem with Strategic Planning

The term “strategic plan” has become so misused and abused in the nonprofit sector that it has almost become meaningless. So many organizations have undergone a poor strategic planning process that the idea of “strategic planning” has almost become laughable. But the fact remains that to be truly effective at creating social change a nonprofit organization MUST have a strategy for the future and a plan for how they will get there.

There are some very clear ways that a good strategic plan differs from a poor one:

A good strategic plan starts from an in-depth understanding of the outside community marketplace in which the nonprofit operates (trends in clients, funders, competitors, etc). Whereas a bad strategic plan is created in a vacuum among only board and staff. One nonprofit told me that at a board retreat years ago, board members were asked to write their goals for the organization on post-it notes, which were then tacked all over the room and voted on. And like that, their strategic plan was born.

A good strategic plan forces the organization to articulate its value proposition, i.e. how the organization uniquely uses community inputs to create significant social value (change to a social problem). A poor strategic plan fails to articulate a value proposition and assumes that everyone outside the organization loves it and understands its value just as much as everyone inside the organization.

A good strategic plan puts everything on the table and allows no sacred cows. Board members with pet interests are reigned in and staff members who are not contributing are encouraged to realign themselves with the new plan. A poor strategic plan only deals with the easy or non-controversial issues and leaves the difficult questions aside.

A good strategic plan makes sure that the strategy for programs is aligned with the organization’s business and financial model so that the resulting strategic plan includes programs, financing and operations in an integrated way. A poor strategic plan focuses only on programs and assumes that the money will somehow follow.

A good strategic plan includes a tactical plan so that the broad goals are broken down into individual steps to get there. This allows the organization to monitor and revise the plan on an on-going basis. A poor strategic plan has no tactical plan or monitoring system attached to it. Once approved, staff or board don’t see it again and it certainly doesn’t drive the day-to-day activity of the organization.

A good strategic plan is inspiring and compelling to potential funders. It sets forth a bold vision for the future and a specific road map for getting there, which inspires confidence and investment. A poor strategic plan is boring, maintains the status quo, and elicits only nominal external support.

It’s not enough to go through the “strategy” motions. A real strategic plan is bold, compelling, tactical, well-financed, integrated and inspiring. It gets everyone (staff, board, funders, volunteers, clients) moving forward in a common direction from which real change flows.

If you’re interested in exactly what Social Velocity’s 7-stage strategic planning process looks like, go here.

Photo Credit: HikingArtist.com

Tags: bad strategic planning, Board of Directors, how to create a strategic plan, nonprofit alignment, nonprofit planning, nonprofit strategic planning, nonprofit strategy, strategic plan

Wednesday, April 27th, 2011 Board of Directors, Capacity Building, Financing, Nonprofits, Planning, Strategy 15 Comments

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