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What Are The Key Strategic Questions Facing Your Nonprofit?

At the beginning of any strategic planning process I lead, this is the question I pose to the nonprofit’s leadership: “What are the key strategic questions facing your nonprofit?”

Nonprofit leaders who want to plan for the future must first articulate what it is they need to decide about that future. A strategic question is a big picture, two roads diverged in the woods kind of question. Shall we go this way, or shall we go that way? They are not the tactical “How do we get this done?” questions, but rather the “What should we be doing?” kinds of questions.

So my first step in strategic planning is to lead the board and staff to create a laundry list of the big picture questions they want to be able to answer by the end of the strategic planning process.

These are questions like:

What people or groups are we seeking to benefit or influence?
It is absolutely essential that your nonprofit get crystal clear about who your target population is in order to better create change for those targets, more effectively encourage funders to invest in what you are doing, put your limited resources to their highest and best use, and, most importantly, to really understand how best to create social change. Your target populations are those people who you are uniquely positioned to benefit or influence and in doing so will move you closer to achieving your nonprofit’s long-term vision for change. When you get clear about who you are best positioned to benefit or influence, you will be better able to direct your precious resources (staff, board, money, volunteers) toward achieving that ultimate goal. The clearer and more specific you can get about exactly who your target population(s) are, the more effective you will be at creating change for them.

Which programs or activities should we cut?
Often nonprofit leaders are so big hearted that over the years they take on more and more programs and services, regardless of whether those additional programs make strategic sense or fit with the core competencies of their organization. So if you run a nonprofit with a long list of programs that don’t necessarily align with each other or with what you do best, you may want (during your strategic planning process) to ask which programs should stay and which should go.

What social issues are we working to address?
Sometimes a nonprofit’s board and staff are at odds about (or at least have never really decided) the exact list of social problems their nonprofit wants to address. A nonprofit is typically created because its founder recognizes some injustice or disparity and she wants to address that problem. But over time, a nonprofit’s leadership might take on additional issues, or the issues they were formed to address might change or grow, or other competing groups might launch to address similar issues.  So to chart a future direction, board and staff together must become crystal clear about exactly which social problems they believe are in their nonprofit’s purview.

Given what others working on the same issues are doing, where should we be focusing our efforts?
You cannot create a long-term strategy in a vacuum. Therefore you must get outside your walls and understand what other people and groups working on similar social issues are doing. And then you may need to determine what impact those efforts have on your nonprofit’s future direction and where can you have the most effective results.

What changed conditions should result from our work?
This is the ultimate strategic question because it forces everyone to articulate why your nonprofit exists. The changed social conditions that you desire (in other words, your desired outcomes) help you articulate what you ultimately hope your nonprofit will accomplish. And by articulating that, you can then work backwards to determine how you will operate, what programs you will run, who you will work with, how you will be funded, etc. Your desired outcomes serve as your nonprofit’s guiding light. And they hold your nonprofit accountable both internally and externally.

What is the most sustainable financial model for the outcomes we want to achieve?
All money is not equal and in order to create sustainable social change you have to figure out how to attract enough and the right kinds of money to achieve your outcome goals. So as part of your strategic planning process, you may need to figure out what your financial model should look like given the answers to all of your other strategic questions.

These are just a sampling of potential key strategic questions. Your unique mission and operating model will necessitate that you create your own custom list of key strategic questions.

Once you have that list, the purpose of a good strategic planning process then is to set about answering those questions in an evidence-based, decisive way. And once you have answers to all of your key strategic questions, you can craft a compelling, effective strategic plan that board, staff and supporters will be excited to bring to fruition.

If you want to learn more about the strategic planning process I use with my clients, check out my Strategic Planning page.

Photo Credit: Nick Page

 

 

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When A Funder Takes Your Nonprofit Off Course

It’s fairly common knowledge that in the nonprofit sector the relationship between funders and nonprofit leaders is often fraught. A power imbalance between those with the purse strings and those without can sometimes lead to poor decisions about a nonprofit’s future direction.

The other day I was advising a nonprofit leader — let’s call him “Tim” — about whether he should expand his after-school program to a new school district, an expansion that one of his key foundation funders was championing. Tim was intrigued by the idea because due to a mix of circumstances (high need, proximity to other programs, etc.) investing in this school district had recently become popular among foundations.

But Tim was conflicted because, through years of experience implementing his very successful program, he knew that this new school district would not be a good fit for his program. The school district leadership was not fully invested in Tim’s program and approach, the district was located too far away for the nonprofit to ensure program quality, and the expansion would stretch Tim’s staff too thin, to name just a few of the issues. Despite the drawbacks, Tim was seriously considering expanding to this new district for the sole reason that one of his funders was really keen to see Tim’s program there.

This is a recipe for disaster. It’s an example of a nonprofit leader paying too much attention to the noise. But most troubling, this is an example of a nonprofit leader elevating a funder’s opinion above what the nonprofit leader knows is right.

Don’t get me wrong, I get it.

As a nonprofit leader, there are so many interested parties, so many stakeholders, so many voices telling you what is right and what is best. But the problem is that often those voices have inserted their, or their organization’s, self interest. That’s not to say that this foundation leader was acting with malice. Rather I would bet that he was simply acting with a lack of complete information. Perhaps the foundation leader thought, from his limited viewpoint, that Tim’s proven program would be the perfect addition to this troubled school district. But the foundation leader didn’t understand the larger dynamics at play. And if Tim kept quiet he would actually be doing both himself and the foundation a disservice by keeping his expertise out of the equation.

So when faced with a critical decision (and so many competing voices) how do you get clear about the right move for your nonprofit and then articulate that potentially unpopular decision to others?

First, you have to get quiet. I’m serious — take a walk, turn off your devices, go out in the woods, whatever it takes. You simply cannot make a critical strategic decision amid the ringing phones, your staff’s questions, the constant ping of emails, or the lure of social media.

Once you’ve gotten truly quiet ask yourself: “Which of the possible directions facing our nonprofit is most likely to increase our ability to achieve our desired outcomes?” If you haven’t yet articulated your nonprofit’s desired outcomes, then you need a Theory of Change, which is an excellent guiding document when facing critical strategic decisions like this.

In Tim’s case, if he had gotten quiet and asked himself this question, the answer would have been clear. An expansion to the new school district would actually decrease his nonprofit’s ability to achieve their desired outcomes because 1) they were unlikely to achieve those outcomes with the new students (for all of the reasons outlined above), and 2) the additional drain on his staff would likely decrease the outcomes they were already achieving with their current students.

Once you have arrived at your answer (not the answer someone else wants) articulate (on paper if it’s helpful) why this is the right decision for your nonprofit’s mission and desired outcomes. Then convince a few board champions of your argument. Finally meet one-on-one with your funder, or whoever is trying to take you away from what you know to be the right path. In a clear, evidence-based, confident way explain the reasons behind the decision you have made.

Making the right decision for your organization might be terrifying at first – especially if you risk losing a key funder. But trust me, making the right decision will put your nonprofit in a much better place in the long run.

In Tim’s case, deciding not to expand to the new school district could result in one of two things: 1) he could convince his funder that this is the right decision and through Tim’s honesty and strategic decision-making solidify the funder’s long-term support, or 2) he could lose a funder who doesn’t have his nonprofit’s best interests at heart. And if Tim has a solid financing plan for his nonprofit, the loss of that single funder does not have to be a death knell for the organization.

Either way he has put his nonprofit on a stronger, more sustainable path.

Photo Credit: U.S. Coast Guard

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Do Your Programs Contribute to Mission AND Money?

There is a tool that I think is incredibly helpful to nonprofit leaders trying to figure out where to focus their resources and how to plan for the future. Indeed it is typically one of the first activities in the strategic planning process I use with my clients.

The Program Matrix helps a nonprofit board and staff analyze their portfolio of programs to understand their overall mission and money mix.

Because those two elements — mission and money — are inextricably bound in an effective nonprofit organization. You simply cannot achieve your mission without an operation that attracts and uses money sustainably.

The Program Matrix looks like this:

And, here’s how to fill out yours.

List Your Programs
A nonprofit leader makes a list of all their mission-related programs and initiatives. But don’t include organization-building work, like pure fundraising activities, or board development. While those activities are absolutely critical to your success, they are a means to an end. For example, conducting a fundraising appeal has the goal of raising money to plow into programs. So in Program Matrix, we want to look at just the mission-related programs.

Plot Your Programs on the Matrix
Once you have that list of programs, plot each individual program on the matrix based on that program’s ability to contribute to:

  1. Social Impact: The social change outcomes you are working toward, which are found in your Theory of Change (on the x axis), and

  2. Financial Returns: The financial sustainability of the organization (on the y axis). A program that can attract enough money not only to cover its own direct and indirect costs, but also to subsidize other programs would be above the line (“positive”), whereas a program that cannot attract enough money to cover its own costs would be below the line (“negative.”)

Analyze the Results
Once you have plotted your entire portfolio of programs on the matrix, take a look at where they fall in the four boxes. These are:

  1. Worthwhile: The program significantly contributes to the nonprofit’s mission and desired outcomes, but it drains financial resources from the organization. A nonprofit will always have programs in this box, and that’s fine.

  2. Sustaining: The program doesn’t appreciably contribute to the nonprofit’s mission and desired outcomes, but it does provide a surplus of financial resources to the organization, which is great.

  3. Beneficial: The program contributes to the nonprofit’s mission and desired outcomes AND it provides excess money that can be plowed into “Worthwhile” programs — this is the best of both worlds.

  4. Detrimental: The program doesn’t contribute to the nonprofit’s mission and desired outcomes, AND it drains financial resources from the organization — this is the worst of both worlds.

Once filled out, the Program Matrix helps to surface issues that a nonprofit must address. First, any “Detrimental” programs should be significantly reconfigured, given to another organization to run, or abandoned. Second, in order to ensure financial sustainability, make sure that there are enough “Sustaining” and “Beneficial” programs to subsidize the “Worthwhile” programs. If not, you need to get strategic about developing programs that can offset the financial drain of the “Worthwhile” programs.

Repeat the Analysis Often
Once you’ve completed the Program Matrix analysis, rinse and repeat. On a regular basis (at least annually) board and staff should take a look at an updated Program Matrix and make any necessary programmatic adjustments. And any time you are thinking about adding a new program, redo the Program Matrix to include your best guess of where this new program will fall, so that you can understand its impact on the overall social impact and sustainability of your new portfolio of programs.

Armed with the power of the Program Matrix, nonprofit leaders can create a mix of programs that ensure achievement of their social change goals in a sustainable way.

Photo Credit: ParentingPatch 

 

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Is Your Nonprofit Stuck In A Rut?

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

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5 Conversations the Nonprofit Sector Should Have

douglas fairbanksChange is certainly happening within the nonprofit sector and the philanthropy that funds it. From efforts to make philanthropy better at addressing inequity, to movement away from the overhead myth (and other myths), we are witnessing important shifts in how we tackle (and fund that tackling of) social challenges.

But I’m hungry for more.

And more could emerge from honest and transparent conversations about what is holding the social change sector back. There are some key hurdles facing the sector, and we have no hope of finding solutions to those challenges unless we start some no holds barred conversations, like:

  1. What keeps nonprofits from creating more sustainable business models?
    Everyone understands that nonprofits are sorely under-resourced and struggle to find sustainable financing for their work. But few are trying to really understand how we change this reality sector-wide. A few funders have commissioned research on the state of money in the sector, but it’s not nearly enough. I would love to see a real, solutions-oriented conversation about a problem that everyone (nonprofit leaders, boards, funders) knows exists.

  2. Why do we hold nonprofits to a different standard than for-profits?
    Because the nonprofit sector was borne out of the charitable impulse, we continue to see it as more holy than and separate from the for-profit sector. Therefore we are uncomfortable with nonprofits being too political, raising too much money, or spending too much on infrastructure. As a stark example, the nonprofits working for reform to our fairly dysfunctional political system have many fewer resources for and many more restrictions on their efforts than the for-profit lobbyists that the nonprofit reformers are fighting.

  3. Why won’t we treat nonprofits as equal partners in the economy?
    Related to this, because the nonprofit sector emerged as a side-note to the business-driven economy, nonprofits have always been viewed as secondary to, and thus less valuable and important than, the private sector. But you simply cannot have one without the other. The nonprofit sector often provides the research and development, worker support, quality of life and other services that fuel the success and profits of the private sector. Without the nonprofit sector there would be less profit and a weaker economy. So we have to recognize the critical (and equal) role that nonprofits play in creating a strong economy. And we have to begin investing equally in the success of those nonprofits.

  4. Why are nonprofit boards largely ineffective?
    Another truism of the nonprofit sector is that boards just don’t work. I have yet to meet a nonprofit leader who doesn’t have at least some frustration with her board and many are resigned to their board’s deep dysfunction. It is extremely difficult to corral a group of volunteers, to be sure, but instead of accepting that challenge as a rule, let’s figure out how to fix it. Perhaps greater standards and regulations, perhaps compensation for their efforts — I don’t know what the right answer is, but let’s analyze the root causes of this inefficiency and change it.

  5. How do we direct more money to efforts that result in social change?
    There is much debate about whether donors want to give based on the results a nonprofit creates. But if the government is going to continue to off-load social interventions to the nonprofit sector, we don’t have the luxury of letting the funders of those nonprofits give solely based on emotion, reciprocity, or duty. You may not believe in “effective altruism” (the idea that philanthropy should flow to the most effective social interventions), but the fact remains that with mounting social problems and a resource-constrained and gridlocked government, a growing burden for addressing social challenges is falling to the nonprofit sector. Nonprofits will only be able to rise to this challenge if the solutions that work have enough resources to actually work. So let’s recognize the tension among increasing social problems, less government involvement, and lack of money and figure out how to fix it.

It’s time for bigger conversations. We have to openly face the challenges standing in the way of social change and figure out a way forward together.

Photo Credit: Paul Thompson

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The Future of the Nonprofit Sector [Slideshare]

I’m excited to be heading to Pennsylvania next month to speak at the 2016 Nonprofit Day Conference. My keynote address for the conference will be “The Future of the Nonprofit Sector.” I wanted to share an abbreviated version of the speech with you here via the Social Velocity Slideshare library.

In my mind, there are some fundamental shifts happening in the sector that will be important to watch. They include:

  • Increasing competition in the space
  • A greater demand for results and social change
  • An increased use of advocacy to achieve that change
  • A move to more “networked” approaches
  • Less “starving” nonprofits of their operational needs
  • And (of course) a move from fundraising to financing

These are interesting times, and they hold tremendous opportunity, I think, for the social change sector.

If you want to see other Social Velocity Slideshares go here. And if you want to learn more about inviting me to come speak to your group or event, check out my Speaking page.

The Future of the Nonprofit Sector from Nell Edgington

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10 Great Social Innovation Reads: July & Aug 2016

social changeSince I was on vacation in late July and early August, I’m combining the last two months of great reads into one. The summer of 2016 certainly was a dark one. From continuing police violence against black men, to the shootings of police officers in Dallas and Baton Rouge, it seemed we were becoming a nation truly divided. And tremendous flooding and devastation in Louisiana that was largely ignored by the media was heartbreaking to watch.

But, there were also moments of hope. From new research showing that donors are increasingly interested in investing in what works; to philanthropic leaders calling for better partnerships among the public, private and nonprofit sectors; to a way to move the conversation away from “overhead,” the summer months made for some very interesting reads.

Below are my picks of the 10 best reads in the world of social change in July and August. But let me know in the comments what else I missed while I was out.

If you want a longer list of reads, follow me on Twitter @nedgington. And you can read previous months’ 10 Great Reads lists here.

  1. More police violence against black men and the shootings of police officers in Dallas and Baton Rouge arguably broke the country’s heart in July. Ira David Socol traced Americans’ growing fear of “the other” over the past few decades and how it has contributed to where we are today. And Pew Research offered some data about how Americans see the Black Lives Matter movement. While Heinz Endowment President Grant Oliphant called for an end to the violence, in an incredibly moving series of blog posts where he wrote:  “We are called — by everything our diverse faiths teach us, by everything we believe about ourselves and our country — to come together as one people, whether we bravely wear the blue or have come to fear those who do. We are called by all that is good in our hearts to see ourselves in all the fallen, all the lives lost, all the families grieving, all the communities struggling to make sense of their brokenness. We are better than this violence. Deep down in our souls we know this. We are so, so much better than this.” And President Obama gave an incredibly moving speech at the funerals for the Dallas police officers, where he encouraged us all to, “With an open heart…worry less about which side has been wronged, and worry more about joining sides to do right.”

  2. But the Black Lives Matter Movement is not just aimed at addressing police violence, the Movement recently released a K-12 education platform designed to fix “a U.S. public-school system…so broken that college is never an option for many young people of color.”

  3. Amid these deepening divides and a growing wealth inequality, Andy Carroll from Exponent Philanthropy argues that philanthropy can no longer be expected to solve everything. Rather, we need partnerships among the public, business and nonprofit sectors to address our growing challenges.

  4. And then there was the tremendous flooding and devastation in Louisiana. Despite the fact that it was the largest natural disaster since Hurricane Sandy in 2012, the media and philanthropy largely ignored the disaster.

  5. Curtis Klotz from the Nonprofits Assistance Fund offers a phenomenal graphic to use in changing the conversation from “nonprofit overhead” to “core mission support” at your nonprofit.

  6. And speaking of how nonprofits use money, FASB (the Financial Accounting Standards Board) just released some significant updates to their standards for nonprofit accounting. The changes impact net asset classes, investment returns, expenses, liquidity and availability of resources, and presentation of operating cash flows. Every nonprofit leader should understand these important changes.

  7. Founder of Family Independence Initiative, Mauricio Lim Miller argues that just as businesses constantly use technology to understand consumer behavior, nonprofits should tap into technology to “let the people they serve dictate what works best.” And Melissa Chadburn might agree with Mauricio’s premise that fighting poverty requires a better understanding of the causes of that poverty given her scathing piece, “How Well-Meaning Nonprofits Perpetuate Poverty.”

  8. Penelope Burk’s annual fundraising study revealed that more donors are interested in results than ever before. Five years ago, only 16% of donors surveyed gave based on a nonprofit’s results vs. a whopping 41% this year.  And research from MobileCause shows that Millennials and GenXers are now the vast majority of the U.S. workforce so if you want to reach them as donors you better be online and mobile.

  9. Ever the trailblazers in foundations interested in building nonprofit capacity, the David and Lucile Packard Foundation unveiled a fabulous new online Knowledge Center with tons of resources for improving nonprofit organizational effectiveness.

  10. Jim Schaffer questions how “philanthropic” the digital giants Amazon, Facebook and Google actually are. And Lucy Bernholz warns nonprofits of the dangers of trusting Facebook’s new fundraising offerings.

Photo Credit: radness.com.au

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Performance Management for Every Nonprofit: An Interview With Isaac Castillo

Castillo_IsaacIn today’s Social Velocity interview, I’m talking with Isaac Castillo, Director of Outcomes, Assessment, and Learning at Venture Philanthropy Partners, where he leads VPP’s approach to data collection, data reporting, and outcome measurement.

Prior to coming to VPP, Isaac served as the Deputy Director for the DC Promise Neighborhood Initiative (DCPNI).  At DCPNI, Isaac led efforts to improve outcomes in the Kenilworth-Parkside community in Ward 7 of the District of Columbia through the strategic coordination of programmatic solutions and research-based strategies. Prior to his time at DCPNI, Isaac served as a Senior Research Scientist at Child Trends where he worked with nonprofits throughout the United States on the development and modification of performance management systems and evaluation designs. In addition, Isaac was also the Director of Learning and Evaluation for the Latin American Youth Center (LAYC) where he led the organization’s evaluation and performance management work.

You can read interviews with other social change leaders here.

Nell: You have spent your career using data to improve the performance of the nonprofits for which you worked. Why do you think performance management is so important for nonprofits? Do you think all nonprofits should pursue performance management? When does it make sense and when doesn’t it?

Isaac: I believe that every nonprofit should pursue some form of performance management because they owe it to the clients they serve. Most nonprofits will assume that they are making a positive difference in people’s lives, but in the vast majority of cases they are just guessing. Using some form of performance management will allow every nonprofit organization to confirm this thinking and to identify areas that can and should be improved so that the next cohort of participants can get better services than the last.

Unfortunately, one of the greatest challenges preventing a nonprofit from implementing some form of performance management isn’t a lack of resources, expertise, or time. It is fear. The fear that they will find out that their work isn’t having a positive effect. This fear is what nonprofit leaders need to overcome, not for the benefit of themselves or their organization, but because they owe it to the clients they serve today and the clients they will serve in the future. I believe that every nonprofit should strive to serve tomorrow’s clients better than today’s clients, and one of the only ways to ensure that this happens is the sustained use of performance management.

The type of performance management that each nonprofit should pursue should vary by the size and scope of their work. At a minimum, small nonprofits should be tracking basic demographic and attendance information on their participants, and hopefully at least one meaningful output or outcome. Whether this occurs in a computerized system or in a spiral paper notebook is up to the nonprofit. But it doesn’t have to be costly, and it doesn’t take expertise. It only takes the will and desire to improve as a nonprofit.

Nell: In the nonprofits in which you’ve worked how have you been able to secure resources to fund performance management? What is the case you and your colleagues have made to funders and what do you think it will take to get more funders investing in performance management?

Isaac: Raising funding for performance management work usually takes a mix of several different strategies and approaches for potential and existing funders.

First, I strongly encourage nonprofits to include some percentage (1 to 5 percent – possibly more) of funding in each grant submission or proposal dedicated to supporting performance management and outcome measurement work. By placing this small percentage into each proposal, a nonprofit can begin to raise funds for internal evaluation and performance management activities. It may not seem like a lot, but it can add up, and eventually generate enough funds for a half-time or full-time position to support in-house performance management work.

Second, I also strongly encourage nonprofits to engage in regular ‘funder education’ – where a nonprofit proactively meets with their funders to have ongoing conversations about outcome measurement and evaluation. This allows both the funder and the nonprofit to come to agreement on measurement expectations and to ensure that both groups are focused on the same concepts. I often suggest that the first of these types of meetings focuses on each group’s definitions of three commonly misunderstood terms: outputs, outcomes, and impact.

Finally, I would recommend that the nonprofit and funder have an honest discussion regarding expectations of results and the funding necessary to support the related evaluation work. If a funder is expecting an random control trial (RCT) to be completed to determine ‘impact,’ then the nonprofit should be willing to push the funder to support a large investment to pay for a high quality evaluation. If the funder is only willing to support a small amount for outcome measurement, then the nonprofit should clearly articulate what is possible.

Nell: Ken Berger and Caroline Fiennes recently argued that we may have gone too far by asking nonprofits to produce research about their own outcomes. What’s your response to that argument?

Isaac: I fully support Ken and Caroline in their argument that most nonprofits should stay away from trying to produce impact research. The desire for ‘impact’ is something that has been (and continues to be) pushed unfairly (and without financial support) by the funding community.

I honestly think a lot of confusion in this space comes from inconsistent use and understanding of the term ‘impact’. The term ‘impact’ has a precise definition among researchers but is often used in a much broader context among funders, nonprofits, and the general public. In the research and evaluation world, impact is used to describe the effectiveness of a program while eliminating as many potential confounding factors as possible. That is why the use of random control trials (RCTs) is usually the cornerstone of impact research – RCTs are the easiest way to control for and eliminate confounding factors.

When most non-researchers use the term ‘impact’ however, they are usually just asking if the program or organization works and if it is making a difference for its intended service population. That is a much lower bar to set, and yet it is a critical distinction in this discussion. If you are thinking about ‘impact’ as a researcher, you will need a large amount of resources and expertise to determine ‘impact,’ which usually means completing one or more formal evaluations. If you are thinking about ‘impact’ in the more general sense and less strict way, then pursuing some form of performance management system will allow a nonprofit to determine if their efforts have been successful.

I do think every nonprofit should pursue some form of performance management to ensure that their work is having a positive effect as a complement to existing research that others have done. Relying only on the use of others’ research does not guarantee that a nonprofit will provide effective services and achieve positive outcomes. This type of research is a like a recipe – it shows what has worked in the past and provides a guide for the nonprofit – but a recipe can still be ruined with poor implementation or planning.

Every nonprofit has an obligation to the people they serve (and not to their funders) to ensure that their programming is having a positive effect (or at the very least not causing harm). Without some form of performance management system in place (even one that just uses paper and pencil), a nonprofit will never know if they have strayed too far from the recipe provided by previous research.

I also think there are a growing number of very sophisticated nonprofits that should be using AND producing research on effective programs. Every year, I see more and more nonprofits that hire talented and unbiased researchers dedicated to internal evaluation and outcome measurement work. These individuals are just as talented and unbiased as their colleagues working in traditional research and evaluation organizations. They can, and should, produce original research that can help inform the nonprofit field. The real challenge comes in nonprofit organizations finding the resources to support the hiring and retention of these individuals. Not every nonprofit will have the resources or capacity to hire one or more of these individuals – but those that do should absolutely be trying to produce original outcome and impact research to provide ‘recipes’ for effective programming that nonprofits with fewer resources can use in the future.

Nell: Your former organization, DC Promise Neighborhoods, is part of the national Promise Neighborhoods Initiative launched by the US Department of Education in 2010 and modeled after the famous Harlem Children’s Zone. How successful has this national replication of a successful local model been? Have you been able to replicate outcomes? And what hurdles, if any, have you and other replication sites found?

Isaac: I think that there has been some initial success among the Promise Neighborhoods. Part of the challenge that all the Promise Neighborhoods face is that the Harlem Children’s Zone did not achieve their success overnight. They have been working in Harlem for decades, so it would be unrealistic to believe that the Promise Neighborhoods would be able to create large scale change in a matter of a few years.

However, there are signs of progress across all of the Promise Neighborhoods. Each of the Promise Neighborhoods started to address a few outcomes with the initial round of funding, and these outcomes varied. Some focused on math and reading proficiency for students, some focused on obtaining medical homes for young children, and others sought to increase the amount of healthy food consumed by residents. In DC, we focused on improving school attendance.

I do think that most of the 12 Promise Neighborhood Implementation grantees were able to make progress on the outcomes they identified as initial focus areas. However, the very nature of the work (creating community level change) doesn’t lend itself to the rapid accomplishment of multiple outcomes in a short period of time. Each of the Promise Neighborhoods had to prioritize certain outcomes for their respective communities, and only several years later are they able to claim success and begin to identify the next set of outcomes to be addressed. So while certain outcomes haven’t necessarily been replicated across all the Promise Neighborhoods, that is due to the differences in priorities and community conditions rather than any problem with the model itself.

Photo Credit: Venture Philanthropy Partners

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