I’m really excited to announce today’s launch of the Performance Imperative. The Performance Imperative is a detailed definition, created by a community of nonprofit thought leaders, of a high-performance nonprofit. The hope is with a clear definition of high-performance we can strengthen nonprofit efforts to achieve social change.
As we all know, we are living in a time of growing wealth inequality, crumbling institutions, political divides, and the list of social challenges goes on. The burden of finding solutions to these challenges increasingly falls to the nonprofit sector. So “good work” is no longer enough. We need to understand — through rigor and evidence — which solutions are working and which are not.
The Performance Imperative was created by the Leap Ambassadors Community, a network of 70+ nonprofit thought leaders and practitioners of which I am a member. The group emerged from the 2013 After the Leap conference, which brought nonprofit, philanthropic and government leaders together to create a higher-performing nonprofit sector. The group is determined to lead the fundamental, and critical, shift towards a more effective nonprofit sector.
The Performance Imperative defines nonprofit high performance as “the ability to deliver—over a prolonged period of time—meaningful, measurable, and financially sustainable results for the people or causes the nonprofit is in existence to serve.”
The Performance Imperative further describes seven organizational pillars that lead to high performance:
- Courageous, adaptive executive and board leadership
- Disciplined, people-focused management
- Well-designed and well-implemented programs and strategies
- Financial health and sustainability
- A culture that values learning
- Internal monitoring for continuous improvement
- External evaluation for mission effectiveness.
Each one of these 7 pillars is fully explained in the Performance Imperative.
Over the next several months I will write a blog series that digs into each of these 7 pillars to understand what each one means for a nonprofit organization and to examine case studies of how other nonprofit leaders have approached the pillars. And next week on the blog I’ll interview one of the founders of this movement toward high performance.
Although the Performance Imperative is targeted toward $3M+ nonprofits, it can also be a benchmark upon which any social change nonprofit can measure itself. Nonprofit boards and staffs can use the Performance Imperative as a north star to guide their journey toward higher performance.
The critical necessity of a high performing nonprofit sector is clear. We no longer have the luxury of benevolent good works that sit aside the business of our country. Now is the time to find solutions that really work and develop the leadership and sustainability to spread them far and wide.
As Mario Morino, founder of the Leap Ambassador Community has said, “If we don’t figure out how to build high performing nonprofits, nothing else matters. This is the last mile. Our nation depends on it.”
In today’s Social Velocity interview, I’m talking with Josh Silver, Director of Represent.US, an organization building a movement to pass tough anti-corruption laws in cities and states across America. His local approach to political and social change is a fascinating model. Josh is a veteran election and media reform executive and served as the campaign manager for the successful 1998 Arizona Clean Elections ballot initiative campaign. He is also the co-founder and former CEO of Free Press, a leading media and technology reform advocacy organization. He also served as the Director of Development for the cultural arm of the Smithsonian Institution.
If you want to read past interviews in the Social Velocity interview series go here.
Nell: With Represent.Us you take a city-by-city or state-by-state approach to political reform, instead of a nationwide approach. Why do you think a local approach holds more promise?
Josh: It’s all about momentum. Every poll available has shown that Americans of all political affiliations — conservatives, progressives, and independents alike — support tough, new anti-corruption laws. But, as with so many other issues, these wildly popular reforms are going nowhere fast in today’s Washington.
If we want to break the gridlock at the national level, we need to be pragmatic about where we focus our efforts. Rather than throw ourselves at a brick wall in Congress, we’re taking this fight to the thousands of cities and 27 states where we can use the ballot initiative process to bypass compromised local legislatures and put tough, new anti-corruption laws directly to a public vote.
Focusing on city and state initiatives is both good policy and good politics. In policy terms, many state and local anti-corruption laws are even more out of date than federal law and in significant need of reform. We can and should do everything in our power to make the exchange of money and favors for political influence illegal at every level of government.
In political terms, using a local ballot initiative strategy will allow us to start racking up wins immediately, showing an understandably cynical public that change is possible and building momentum for national reform. While self-interested politicians might be reluctant to change the system that got them elected, the public will overwhelmingly vote for a local Anti-Corruption Act if given the opportunity.
Advocates of marriage equality and marijuana legalization have seen huge success with the same strategy. 20 years ago, both issues faced seemingly insurmountable odds in Washington. By picking smart targets at the state and local level, they’ve managed to redraw the political map and set their campaigns on the path to national victory.
We’re running the same playbook, and it’s already working. On November 4, 2014, Tallahassee, Florida passed the first municipal Anti-Corruption Act in the United States by a two to one margin. Now, campaigns for new Anti-Corruption Acts are already in the works for twelve cities and two states in 2015 and 2016.
Nell: As you mentioned, your approach is part of a larger state-by-state reform trend, with movements like the state-by-state legalization of gay marriage and of marijuana. Why does the state-by-state approach work now and will we ever go back to federal level reform?
Josh: The state-by-state approach works because it allows Americans to take matters into their own hands when politicians refuse to act. Instead of worrying about local politicians carving out loopholes for themselves and their parties, the People can craft their own comprehensive reform plan, gather the signatures necessary to place it on the ballot, and put their local Anti-Corruption Act directly to a public vote. Given the popularity of the reforms we’re talking about, these local Acts are very likely to pass, building the movement from the ground up and creating a domino effect which will spread from state to state and eventually Washington, DC.
Passing a statewide ballot initiative can fundamentally change a state’s political culture. It sends a clear message to every elected official in the state, including that state’s federal delegation. Every time we pass a statewide anti-corruption act, it makes it possible for federal candidates in that state to run for Congress and win without the backing of big money special interests. So, every state we win means more members of Congress who support comprehensive nationwide reform. Once we’ve attained a critical mass of support in the states, federal level reform is inevitable.
Nell: A big part of what you do involves creating coalitions of strange bedfellows, for example Tea Party loyalists and progressives. How do you circumvent our current environment of the dismissive or openly hostile discourse between opposing viewpoints and get people to find some common ground and work together?
Josh: Americans self-identify as roughly one-third Conservative, one-third Progressive and one-third Independent. Maintaining a fiercely cross-partisan campaign is critical to our long-term success — winning national reform is impossible with only one-third of the country behind you.
We’ve found that the people fighting at the grassroots are sick of the gridlock in Washington, and much more willing to work across partisan lines than their members of Congress. While our supporters might not agree on everything, they’re united behind the fundamental belief that government — no matter how large or how small — must put the needs of the People first. Public policy decisions should be made based on merit, not lobbyists and campaign contributions. Our supporters are willing to put their partisan differences aside and work together to make that happen.
The effort behind the Tallahassee Anti-Corruption Act is a perfect example of this principle in action. It was spearheaded by the chair of the Florida Tea Party Network, the former president of the Florida League of Women Voters, the chairman of Florida Common Cause, and a leader of Integrity Florida, an independent state ethics watchdog. This politically diverse coalition played an enormous role in the Tallahassee victory. As the editorial board of the Tallahassee Democrat, the local paper of record, put it: “When you have representatives of the League of Women Voters, Common Cause, Integrity Florida and the state Tea Party Network all aligned against you, it might be time to reassess your position.”
Nell: You just won your first victory by passing an anti-corruption code in the city of Tallahassee, FL. Let’s be idealistic for a second. What if you are able to log victories like Tallahassee’s in cities and states across the country. Is there a critical number of places before the movement becomes truly national? And then do you look at federal reforms? Or is the end goal every city and every state?
Josh: There is no “magic number” — Each state-level win makes national reform more likely. Every statewide victory means more Congressional delegations from states with an Anti-Corruption Act, and more public pressure on politicians to get on the right side of this issue or risk losing their seats.
While winning a federal Anti-Corruption Act is a major goal, bringing reform to every city and state is just as important. This movement is bigger than any one law — it’s about fundamentally changing the political culture of the United States. It’s about demonstrating that Americans will not tolerate laws putting self-interest before the public good, and ensuring a government committed to serving the People at every level.
It’s not a question of idealism. This movement is real, and has no plans of slowing down. We’re planning to bring local Anti-Corruption acts to 12 cities and 2 states in 2015 and 2016. We are already working with local law firms, political strategists and grassroots activists to make it happen.
If you’d like to be part of it, visit represent.us to learn more and join the campaign.
Recent studies of nonprofit donors have found that the majority aren’t interested in impact. But what if that current reality isn’t also future reality but rather an opportunity? What if just as Apple created a market for smartphones where one didn’t exist, we could create a market for social change funding where one currently doesn’t exist?
As I mentioned in my 10 Great Reads list for January, data wonk Caroline Fiennes reviewed recent studies on donor behavior and found that donors don’t increase their donations when shown nonprofit performance data. And Caroline is not alone, others have also argued that donors just don’t care about performance.
This could be depressing because if donors aren’t interested in the effectiveness of a nonprofit they won’t shift their money to the nonprofits more effective at creating social change. In other words, we have no hope of solving social problems if we can’t channel money to those entities that are actually solving those problems.
Apple is probably the most obvious example of a market maker, creating consumer demand where there was none. They have continually created innovative products for swooning consumers who previously had no idea they needed those products. Before creating the first iPhone prototype in 2006 Steve Jobs didn’t survey consumers to ask if they wanted their phone to surf the web, send emails, and take pictures. A majority of consumers would probably have said no. Rather, Apple saw a need that consumers didn’t yet know they had (what marketers call a “latent need”) and built a huge consumer base from scratch.
They were market makers, as Fred Vogelstein described in the New York Times Magazine:
Apple’s innovations have set off an entire rethinking of how humans interact with machines. It’s not simply that we use our fingers now instead of a mouse. Smartphones, in particular, have become extensions of our brains…Its technology is changing the way we learn in school, the way doctors treat patients, the way we travel and explore. Entertainment and media are accessed and experienced in entirely new ways.
Jobs and his team created a completely different marketplace, set of cultural norms, and way of interacting with the world around us.
In the world of social change we need a completely different marketplace, set of cultural norms, and way of channeling money. So we need to create the market.
We need to show funders that the current flow of money to social change efforts is not sufficient or efficient. If we truly want solutions to our social challenges, we must create an effective financial market for those solutions.
I believe that funders can be inspired to change their behavior. They have a latent desire to see their dollars actually achieve something. They have been so used to the lowest common denominator of giving based solely on reciprocity or emotion, but that can change.
As Harvard Business Review blogger Umair Haque explains, Apple’s success comes from their ability to rise above the common denominator and create something people love and truly (though they may not yet know it) want:
Most companies…don’t care about what they make. They merely care about what they sell. And so they…offer the people they call consumers the lowest common denominator designed by focus-group led committees at the everyday low price in malls full of stores full of shelves full of…other lowest common denominators designed by committee at the everyday low price. Nobody ever loved anybody who was merely trying to sell them something. Especially not the lowest common denominator. People love people—and organizations—that make their lives better. Even when those things are as simple as phones.
The data and the focus groups may say that donors don’t want impact. Yet. So its up to us to create the market. It is up to us to get donors to love the impact that makes clients’ lives, donors’ lives, and ultimately our communities better. It’s up to us to create demand for funding real social change.
Photo Credit: Matthew Yohe
January was a busy month. From more trends and predictions for the new year, to new ways of thinking about scale, to nonprofit performance measures and whether donors really care about them, to a return to farming, and a new giving app, there was lots to read in the world of social change.
You can see past months’ 10 Great Social Innovation Reads lists here.
- Since it was the first month of a new year, there were several prediction posts for the nonprofit sector. Rich Cohen’s predictions are very thoughtful, including declining slacktivism, an IRS crisis, continuing financial collapse of local governments and much more. The National Council of Nonprofits pulled together their list of 2015 trends facing the sector. And Kivi Leroux Miller created this nice infographic summarizing her 2015 Nonprofit Communications Trends Report.
- Because a “social capital chasm” exists in the nonprofit sector it may not be possible for nonprofits to truly achieve organizational scale says Alice Gugelev and Andrew Stern writing in the Stanford Social Innovation Review. They urge social change leaders to look at scaling impact instead of organization. As they put it, “It’s time for nonprofit leaders to ask a more fundamental question than ‘How do you scale up?’ Instead, we urge them to consider…’What’s your endgame?'”
- Writing on the Center for Effective Philanthropy blog, Phil Buchanan reminds us that it is not enough to move beyond overhead as a way to evaluate nonprofits: “What we need to focus on, of course, is not just de-emphasizing overhead ratios as a performance metric. We also need improvements in approaches to performance measurement. The reality is that donors often gravitate to overhead ratios when they can’t get their hands around anything else.”
- But nonprofit evaluation wonk Caroline Fiennes might disagree. She takes a look at recent studies on how information about a nonprofit’s performance affects donor giving behavior. She rather depressingly finds that performance data doesn’t improve donations. In her review of three recent studies, Caroline finds “Donors appeared to use evidence of effectiveness as they would a hygiene factor: they seemed to expect all charities to have four-star ratings, and reduced donations when they were disappointed – but never increased them because they were never positively surprised.”
- With elections behind him, President Obama’s January State of the Union address laid out his plans for his last two years in office. But he didn’t once mention the nonprofit sector even though the sector is key to the success of those plans, as Rick Cohen points out.
- The new app, Charity Match that was developed by Intuit and the Gates Foundation, prompts people to make charitable donations based on their spending habits while they do their online banking.
- While the family farm was once a thing of the past some Millennials are returning to farming, wanting “to find a way to live high-quality, sustainable lives, and help others do the same.”
- The Nonprofit Tech for Good blog offers 15 Must-Know Fundraising and Social Media Stats.
- As is their tradition, every year Bill and Melinda Gates release an annual letter about their philanthropy. And every year social change thinkers tear it apart. This year Chris Blattman from The Monkey Cage takes issue with the Gates’ assumption “that a few new technologies can make unprecedented and fundamental changes in poverty in 15 years.”
- And finally, Michel Bachmann and Roshan Paul caution social changemakers to slow down and go deep in order to avoid burning out altogether. “The social entrepreneurship sector in many parts of the world is rife with accelerators…These organizations play an important role—there are good reasons for their existence. However, in this era where everything is accelerating, we’d like to put our hands up for the importance of deceleration. As the poet Tess Gallagher said: ‘You can’t go deep until you slow down.'” Amen!
Photo Credit: Jonathan Cohen
There was a bit of a dust up in the (social change) Twitterverse yesterday. Ryan Seashore from CodeNow wrote a post on TechCrunch arguing that the majority of nonprofits are “broken,” and should act more like for-profit startups in order to create impact. The post follows a similar line of other arguments over the years (most recently Carrie Rich’s argument that nonprofits should all become social enterprises) that the nonprofit form is so dysfunctional that it should be tossed out. But there is a real danger to this idea of abandoning the nonprofit sector.
Debates like these are crucial not because of the entertainment value (although I do love good drama), but because they force us to uncover and analyze our underlying assumptions. Yesterday’s debate, and others like it, which take the nonprofit sector to task for being inefficient, broken, unbusinesslike, lay bare some false and destructive assumptions about nonprofits and about social change in general.
Ryan sees nonprofits as aging dinosaurs with “too much overhead, too much bureaucracy, and a lack of focus on impact. Everything feels slow.” But for real change to happen you have to integrate the institutions that already exist with the networks, or “startups,” that want change, as I discussed in an earlier post. The two (institutions and networks) must work together. Ryan’s argument that nonprofits need to be more like startups is fundamentally flawed because if everything were a startup, change wouldn’t happen.
To quote David Brooks from a recent The New York Times piece, “Post-Internet, many people assume that big problems can be solved by swarms of small, loosely networked…social entrepreneurs. Big hierarchical organizations are dinosaurs…[but] this is misguided…Public and nonprofit management, the stuff that gets derided as ‘overhead,’ really matters. It’s as important to attract talent to health ministries as it is to spend money on specific medicines.”
To be sure, in his blog post Ryan outlines some areas where many nonprofits could improve (becoming more focused, continually innovating, diversifying revenue sources, thinking big), but these are best practices that any organization (startup or established institution, for-profit or nonprofit) should embrace. It is simplistic and misguided to think, as Ryan writes, that “the nonprofit world must embrace the nimble ways of successful startups to become more effective, and do better.” I know its not sexy, but real social change is much more complex than startup versus institution.
So let’s move on from this either/or mentality. Effective social change requires institutions AND networks, it requires Millennials AND Boomers, it requires startups AND established organizations, it requires public AND private money (and lots of it), and it requires for-profit and nonprofit solutions. We are wasting our time (and our keystrokes) by creating false dichotomies. Let’s work together toward strategic, sustainable social change.
December is often a fairly quiet month in the world of social change writing because of the holidays and time off, but there was still some great stuff to read. From Giving Tuesday, to Teach for America’s 25th anniversary, to philanthropy buzzwords, to social media trends to watch, to a critique of Charity Navigator’s naughty and nice list, there was a good bit to think about in the world of social change.
You can read past months’ 10 Great Social Innovation Reads lists here.
- Writing in the Harvard Business Review, Umair Haque provides a scathing critique of American politicians and pundits and the dirty little secrets they are harboring about our economy. As he puts it: “We don’t live the lives we were meant to by merrily shoving Artificially Fried Chicken Flavored Dorito Slurpees down our gullets while watching our societies crumble. We live them when we build things. Great things. Worthy things. Noble things. And the greatest, worthiest, and noblest of all things that mankind has ever built are not apps, drones, corporations, or profits. They are societies in which every life counts. In which every life is truly, fully lived.” Wow.
- And speaking of the disparities in our economy, there is growing concern that wealth inequality is making its way into philanthropy. The super rich are disproportionately making up American giving and are supporting their own self interests (i.e. their alma maters, donor advised funds that provide personal tax benefits but no social benefits) as opposed to a redistribution of wealth to the poor.
- Teach For America, the often heralded nonprofit that sends recent college graduates into challenged schools to teach for 2 years, marks its 25th anniversary this year. NPR reports on the challenges the organization faces, including a “self-described TFA resistance movement [with] former corps members [who] say their youthful idealism was cynically co-opted by a group that, in the big picture, acts to the detriment of public education.” Yikes.
- Amazing blogger David Henderson from Full Contact Philanthropy took a writing hiatus earlier this year, but he’s back with a vengeance, and I am loving every one of his posts, especially December’s critique of Charity Navigator’s “naughty and nice list”.
- As is her annual tradition, Lucy Bernholz offers her 2015 philanthropy buzzwords. My personal favorite are “artivists” and “citizen science.”
- I would love to see more nonprofits (and foundations) getting into the advocacy game. Rick Anderson, writing on the Markets for Good blog, provides a really interesting case study of how Washington Nonprofits, the state association for the 58,000+ charitable organizations in Washington State, has been using data to better coordinate with state agencies, elected officials, other nonprofits and foundations.
- December marked the third annual Giving Tuesday, and it was the most profitable yet, raising over $45 Million. Perhaps we have a movement?
- The Wild Apricot blog offers 5 Social Media Trends That Could Impact Nonprofits in 2015.
- Kate Barr from the Nonprofits Assistance Fund encourages nonprofit leaders to stop fearing money. As she puts it, “Let’s eliminate the fear of finance from the nonprofit sector. It doesn’t serve us personally or organizationally. Why? Because nonprofits with strong financial leadership are better equipped to deliver on their promises to the community, explore new territories and foster innovation.” Amen to that!
- The fundraising anomaly of last summer’s ALS Ice Bucket Challenge left a lot of outstanding questions. Not least of which is whether ALS would be able to retain any of those new donors. Beth Kanter talks to ALS CEO Barb Newhouse about exactly that question.
Photo Credit: US Department of Agriculture
The year is winding down, and I will be taking some time off to enjoy friends and family (as I hope you are too). But before I go, I want to leave you with a list of the 10 most popular posts on the blog this year, in case you missed any of them.
I feel incredibly lucky to be able to work with you amazing social change leaders. I am grateful for the amazing work you are doing to create a better world. And I appreciate you being part of the Social Velocity community.
I wish you all a happy, relaxing holiday season, and a wonderful new year. I’ll see you in 2015!
- Can We Move Beyond the Nonprofit Overhead Myth?
- 7 Rules For Brilliant Nonprofit Leaders
- How to Move Your Nonprofit Board From Fundraising to Financing
- Why Nonprofits Must Stop Being So Grateful
- 5 Questions Every Nonprofit Leader Should Ask
- Why Do Nonprofit Leaders Get In Their Own Way?
- 3 Questions to Get Your Nonprofit Board Engaged
- 5 Ways Great Strategy Can Transform a Nonprofit
- Does Your Nonprofit Know How To Attract Big Donors?
- It’s Time to Reinvent the Nonprofit Leader
Photo Credit: Steven Depolo
As the year draws to a close, and you (I hope) make time to relax, reconnect with friends and family, and reacquaint yourselves with some much-needed quiet, you may also want to reflect on your role as a social change leader. Effective leadership is really, really hard work, but it is also incredibly necessary and needed.
So if you find time over the next few weeks to take a look at your role as social change leader and you want some help along the way, download the Reinventing the Nonprofit Leader book.
Here is an excerpt:
Chapter 3: Refuse to Play Nice
As a by-product of the charity mindset, nonprofit leaders often suffer from being too nice. The thing I love most about nonprofit leaders is that, for the most part, they are truly good, decent people. They are trying to make the world a better place, so by definition they are considerate of others. But sometimes you can take being nice too far. Being nice to the donor who leads your nonprofit the wrong way, or the staff member who is not performing may work for the individual relationship, but is detrimental to the larger organization and ultimately your mission.
Indeed, according to a 2010 study by researchers at Stanford University, nonprofits are perceived as “warm, generous and caring organizations, but lacking the competence to produce high-quality goods or services and run financially sound businesses.” In other words, we think nonprofit leaders are nice — but not competent.
But this reality is often imposed on nonprofit leaders. Nonprofit leaders are encouraged to collaborate instead of compete, hold onto under-performing staff, accept martyr-like salaries, smile and nod when funders push them in tangential directions, and keep quiet when government programs require the same services at a lower price.
This demand that the nonprofit sector play “nice” is the result of (at least) three aspects to the sector:
- A Focus on the Social. The sector exists to address and (hopefully) solve social problems. Thus, by definition, it is socially oriented and has an inclusive, consensus-based approach to doing business.
- More Customers. Nonprofits have two customer groups, as opposed to the single customer for-profits have: 1) those who benefit from the services a nonprofit provides (clients) and 2) those who pay for those services (funders).
- Multiple Players. In addition to their customer groups, nonprofit leaders must corral their board of directors, which often includes individuals with competing interests, and external decision-makers (policy makers, advocates, leaders of collaborating organizations) who have an impact on the change the nonprofit seeks. The end result is that multiple players must somehow be brought together and led in a common direction.
But in order to work toward real solutions and get out from under consensus-based mediocrity, you need to break free from the niceness trap. Rest assured, I am not asking you to get mean and ugly. But there is a way to politely, but assertively, make sure you get what you need to succeed.
In other words, the reinvented nonprofit leader needs to:
- Say “No” to funders who demand new programs or changes to programs that detract from your nonprofit’s theory of change and your core competencies.
- Diversify revenue streams so that you are not beholden to any one funder or funding stream.
- Demand that board members invest significant time and money in your nonprofit, or get out.
- Fire under-performing staff. This is such a taboo in the sector, but with limited resources and mounting social problems to be addressed, we do not have time to invest in people who cannot deliver.
- Be brutally honest with funders and board members about the true costs of running operations effectively and stop apologizing for, or hiding, administrative expenses.
- Create a bold strategic plan that will drive your nonprofit toward social impact and sustainability, not mediocrity.
- Make an honest assessment of your nonprofit’s core competencies, competitors and consumers so that you understand and can articulate where you fit in the marketplace — and act accordingly.
- Stop waiting for your board chair, or a big donor, or a government official to allow you to do something that you know is the right way forward.
- Refusing to play nice is not easy. And it often culminates in a difficult conversation, perhaps with an underperforming staff member, an ineffective board member, or a time-consuming funder.
In order to manage these difficult conversations for success, you need to approach them in a thoughtful and strategic way. Here are the steps…
Photo Credit: Satish Krishnamurthy
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