One of the most difficult decisions a nonprofit leader faces is whether to cut a program. The program might be draining staff and offering few results to clients, but once a nonprofit launches a program it becomes almost instantly institutionalized. Even if the program eventually no longer makes strategic sense, it is almost impossible to convince board, staff and donors to end it.
But for a nonprofit to be most effective, its leaders must understand the financial and social impact of all of its programs and make strategic decisions accordingly. And the way to do that is with a Program Analysis Matrix.
Nonprofit leaders are driven by the desire to provide as many services as possible, so to shut down an established program seems so wrong. But nonprofit leaders must regularly analyze their portfolio of programs in order to understand how well each program contributes to the organization’s mission and financial sustainability.
When I assess a client’s financial model, one of the first things I employ is a Program Analysis Matrix that analyzes the social and financial impact of their entire portfolio of programs. I chart all programs and activities comparing each program’s ability to:
- Contribute to the social change the nonprofit is working toward (“Social Impact” on the x axis), and
- Add or subtract financial resources to/from the organization (“Financial Returns” on the y axis).
A Program Analysis Matrix looks like this:
Each program that a nonprofit operates is placed in one of the four boxes depending on how well that program contributes to the social impact (or mission) the nonprofit is working towards and the financial sustainability of the organization. The four options are:
- Sustaining: the program has low social impact (it doesn’t appreciably contribute to the nonprofit’s ability to create social change), but does provide financial resources to the organization.
- Beneficial: the program has high social impact and provides financial resources to the organization—this is the best of both worlds.
- Detrimental: the program provides low social impact and drains financial resources from the organization—this is the worst of both worlds.
- Worthwhile: the program provides high social impact but drains financial resources.
This Program Analysis Matrix helps to surface issues that a nonprofit must address, for example when some programs are providing no benefits, or there are too many mission-related programs that don’t attract funding. Typically, a nonprofit has an abundance of “Worthwhile” programs that are integral to the mission and provide important social impact but are financially draining to the organization. In a situation like that, board and staff need to get strategic about developing programs that are “Sustaining” or “Beneficial” and provide a positive financial return.
Board and staff should work together to plot all current programs in the matrix. Once completed, the matrix can help make the appropriate strategic decisions (labeled as “Strategy” above) about which programs to “cut,” “maintain,” “nurture,” or “expand.”
This analysis can help a nonprofit take a hard look at everything they are doing and start to make some hard decisions. A conversation about cutting programs is always incredibly difficult, but with the right data behind it, the conversation can be a logical, as opposed to emotional, one.
Photo Credit: Bart van de Biezen
There is a fundamental error that nonprofit leaders make when recruiting new board members. And that is to be vague about the kind of board members they need. Nonprofit leaders often think in very general terms about the makeup of their board while ignoring their nonprofit’s specific needs. It then becomes almost impossible to get new recruits (let alone old board members) active or engaged because they are unclear about the unique role they should play in the organization.
A board matrix is a tool that many nonprofits use to analyze what traits their current board has and where the holes lie. Often the traits used include very general things like:
- Gender diversity
- Racial diversity
- Geographic representation (for national and regional organizations)
- General sought-after skills like marketing and fundraising expertise
- Access to vague networks, like “connections to people with deep pockets”
But this is the wrong way to think about who your board members should be.
To recruit the board you really need, you have to connect the skills, experience, and networks of your board to the specific goals of your long-term strategy.
Here are the steps to get there:
- Divide Your Strategic Plan Into Board Vs. Staff Roles
Take a hard look at each goal of your strategic plan and ask what the board needs to do versus what the staff needs to do to make that goal a reality. For example, if your nonprofit runs an in-school literacy program and your first goal is to grow the number of students by 50%, you probably need your board to open doors to school district decision-makers so that you can grow to additional schools and secure more district support. So at least one or two of your board members must have connections to school district leaders.
- Analyze Current Board Members
Once you’ve made a list of what you need from your board for each of your goals, add those elements to the top of your new board matrix. Make sure these are very specific skills, expertise areas, and networks. So for the example above, they would include things like: “Connections to School District Decision-Makers,” “Experience Growing Organizations,” and “Ability to Understand and Articulate Literacy Data.” At the end of the process, you should have 10-15 skills, expertise areas, or networks that your board must possess. Now list all of your current board members along the left side of the matrix and mark the characteristics that each member has.
- Recruit To Fill The Specific Holes
Once you’ve completed the matrix, you may see areas where your board falls short. Now you know exactly what kinds of board members you need on your board. Give this list of missing skills, expertise, and networks to your Board Recruitment Committee so they can find the specific people necessary to fill those holes.
- Give Each Board Member a Unique Job
Once you are clear about what you need from your board to deliver on your strategic plan, give each board member (current members and new recruits) a unique role to play. People function best when they are very clear about their specific role. If each individual member knows exactly what piece of the strategic plan is theirs to carry out, they will be much more engaged and active. So get specific: “We need you to secure meetings with district-level staff,” or “We need you to look at our growth model and ask hard questions.”
If you want a board that works for you, get specific about the kind of board you really need. To learn more about building a groundbreaking board, download the 10 Traits of a Groundbreaking Board book, or the How to Build a Groundbreaking Board webinar.
Photo Credit: Library of Congress
One thing the nonprofit sector desperately needs is more people asking hard questions. A lot of time is spent skirting issues or sugar coating situations. If nonprofit leaders instead forced some challenging conversations, with hard questions as the impetus, the sector could become more effective. And the place to start is with a nonprofit leader questioning herself.
I’ve written before about questions to ask your board, and questions to ask your nonprofit, and questions to ask before you pursue a new opportunity, but there are also some key questions a nonprofit leader should ask herself.
On a fairly regular basis a nonprofit leader should ask:
- Am I Leading or Managing?
A manager shuffles resources around, waits to be told what to do, and focuses on checking things off her list. But a leader crafts a larger vision for her organization, articulates what her nonprofit is trying to accomplish, and then marshals all the resources at her disposal (board, staff, funders, partners) toward that vision. And when some of those resources won’t align to the vision (board members who aren’t performing, donors who want to veer off course) she confidently tells it like it is. A manager will deploy resources, but a leader will ensure that the deployment results in social change.
- How Can I Address My Weaknesses?
A great leader recognizes when he is falling short and where he needs complementary abilities. A leader who doesn’t know how to fundraise hires a rockstar Development person, or gets fundraising training. A leader who struggles with strategic decisions finds a leadership coach. A leader who can’t build an effective board, asks fellow nonprofit leaders for counsel. Most importantly, if there are costs associated with addressing his weaknesses, a leader raises the money he needs, instead of doing it on the cheap.
- Am I Selling Myself (and My Nonprofit) Short?
I see so many nonprofit leaders not fighting for what their organization really needs. From not articulating the true costs of their nonprofit to funders, to allowing the board to shirk their fundraising responsibilities, to addressing capacity constraints with a band-aid, to burning out from long hours with not enough staff, nonprofit leaders are constantly giving their organizations, and themselves, short shrift. A true leader finds the confidence to stand up for herself and her organization and demand what is truly required to achieve the vision for change.
- Which Other Leaders Should I Align With?
It amazes me how many nonprofit leaders exist in a bubble. They may collaborate with others on a programmatic level, but they are not regularly analyzing the larger marketplace in which they operate (emerging competitors, new technologies, changing needs) and figuring out with which other leaders impacting the field (policymakers, organization heads, advocates, influencers) they should forge alliances. Social change requires much more than any single organization can accomplish. It is critical that nonprofits become fully networked in their area of social change. A nonprofit leader makes that happen.
- Am I Still The Right Person for The Job?
This is such a hard question. But if you simply don’t have the skills (or the energy) to lead the right road ahead, then you must step aside. Don’t hold your organization and the vision back because of your ego. If you are a true leader, you have assembled a whole army of board, staff, supporters and allies that can continue to move forward in your wake. It’s not easy to recognize or admit, but if you really care about the cause and want to see real change happen, then you should regularly be assessing this.
A true nonprofit leader drives the vision, marshals resources, forges alliances, inspires support, and, ultimately, leads the charge toward social change. Because now more than ever we need real social change leaders. People who are willing and able to find the best way forward and the confidence, smarts, and humility to lead us there.
If you want to learn more about nonprofit leadership, download the Reinventing the Nonprofit Leader book.
Photo Credit: iwona_kellie
Note: Fellow nonprofit consultant Cindy Gibson and I were asked to write an opinion piece for Alliance Magazine this month answering the question, “Should Consultants Be Thought Leaders?” There is no doubt that there is a preponderance of consultants in the social sector, some who help move the sector forward, and some who don’t. Cindy and I offer some thoughts about how to distinguish what has value and what does not. Text from the piece is below, and you can also read the piece in the June issue of Alliance.
From strategic and business planning to marketing and fundraising, there seems to be no shortage of consultants ready to help nonprofits meet all kinds of needs. But should they be thought leaders too? Because they are removed from the day-to-day experience of the average non-proﬁt or foundation and have a breadth of perspective that comes from working with different types of organization, consultants can provide important insights to the larger sector.
But when is that thought leadership adding value to the sector and when is it just a means for hawking a consultant’s wares?
At a recent conference, a consulting ﬁrm president suggested his shop’s model was the only way to achieve social change, which caused some participants to shift in their seats. As one participant put it, ‘It’s because they’re consultants. If there’s only one solution and that’s the one they offer consulting on, that’s the approach they promote.’ There is, after all, a difference between introducing ideas to spark new thinking and marketing particular frameworks to build a consultant’s brand. At the end of the day, it all comes down to value.
Is a consultant adding value by introducing new approaches, raising hard questions, highlighting important trends, or suggesting necessary changes to systems and structure, the hallmarks of thought leadership? Or are they using ideas to package what they’re selling? Here are some key questions that might help us to make that distinction:
- Is what the consultant is presenting really new or just something old with new packaging?
We’ve all fallen victim to shiny object syndrome. The next new thing can seem so appealing that it’s easy to believe the hype, but it isn’t necessarily applicable for many organizations. Before embracing a new approach, it’s important to determine whether it actually applies to the specific situation at hand.
- Has the consultant’s new framework been tested?
If the new idea is really worthy of broad adoption, there should be evidence of its value. Consultants need to be transparent about whether they have this evidence and, if so, how it was collected. Was it a randomly sampled population or a few focus groups of satisﬁed clients? Consultants, like other thought leaders, sometimes ignore the fact that the big ideas they’ve envisioned may not work on the ground.
- Does what the consultant is proposing embrace the complexity of the situation?
Social challenges are inherently difficult to resolve because change takes time and requires grappling with the messiness of ‘wicked problems’, which don’t usually respond to one best practice or even a set of discrete interventions. Wicked problems don’t come from somewhere; they come from somewheres. And so do the solutions. True thought leadership emerges from understanding and integrating a problem’s inherent complexity into a potential resolution.
- Is the consultant willing to engage in thoughtful debate about their ideas with those who may disagree?
Thought leaders who are genuinely interested in moving a ﬁeld invite feedback, including criticism, because they know open and honest discussion can strengthen the original idea. They’re also eager to make their ideas broadly accessible so that they become part of the larger ﬁeld.
- Are influential people hailing the new idea as definitive when there may be little hard evidence to suggest that it is?
While it’s nice to have the endorsement of influential people, this can sometimes be a shield against real critique. It can also suggest an echo chamber at work, where the hype around the idea is bigger than the actual value of the idea itself.
There’s no question that it’s difficult, if not impossible, to separate good marketing – which every consultant must do to survive financially – from real thought leadership. We think that consultants can and should have opportunities to stand away from their business and share what they’re learning and observing. Like other thought leaders, they can lift us out of our individual circumstances and move us to see a bigger picture.
That isn’t always easy, especially when consultants’ thought leadership is controversial. But good thinking that has the potential to transform minds and entire fields, even when it may be inimical to a brand, can sometimes lead to impact that may not be easily achieved by focusing only on clients’ individual needs. The key is knowing when and where that kind of thought leadership will add value.
Photo Credit: Eugene Atget
I’ve written before about how hard it sometimes is for nonprofit leaders to ask for help. Donors, board members, regulators, and others put enormous pressure on nonprofit leaders to do it all with little (if any) help.
So in an effort to help nonprofit leaders convince those around them about the benefits of getting help, I’ve developed five benefit sheets describing the advantages of building a stronger nonprofit organization.
Whether or not you are interested in working with me, these benefit sheets describe the return on investing in nonprofit organization building efforts like leadership coaching, strategic planning, board engagement. Obviously I feel very strongly that nonprofits need to build stronger, more effective organizations, but that’s often a difficult case for nonprofit leaders to make.
I hope these benefit sheets can help you make that case:
Nonprofit Leader Coaching
But it doesn’t have to be that way. A leadership coach becomes your strategic partner helping you analyze your challenges and concerns, think through staffing decisions, overcome fundraising hurdles, address board management struggles, and brainstorm new approaches. Coaching provides tremendous benefits including: increased board and donor engagement, more productive staff, greater financial sustainability, and clearer strategic thinking. Download the Nonprofit Leader Coaching benefit sheet.
In an increasingly competitive, resource-strapped world, great nonprofit strategy is less a luxury and increasingly a necessity. Without an overall strategy, a nonprofit is relegated to the world of “doing good work,” instead of the world of “making a real difference.” And these days more and more funders, supporters, advocates, partners and decision makers are requiring that nonprofits do more than just good work.
Smart nonprofit strategy can completely transform your nonprofit. It can create momentum, attract deeper funding, filter future decisions, become a management tool, and ultimately realize more social change. Download the Strategic Planning benefit sheet.
It can often seem impossible to get your board’s attention, let alone get them all pointing in the same, effective direction. But if managed strategically, your board can be an unstoppable army moving your nonprofit forward.
If you take a big step back and develop a groundbreaking board, you can dramatically increase your ability to: reach new audiences, grow your programs, forge new external partnerships, raise more money, increase exposure to key decision makers, build community investment and engagement. Download the Board Engagement benefit sheet.
Financial Model Assessment
It happens all the time. A nonprofit leader wants to expand her services to meet growing demand, or is frustrated with a stalled fundraising effort, or doesn’t know where to diversify her fundraising efforts. She wants to raise more money, but doesn’t know how.
A Financial Model Assessment can be game changing. It uncovers how all aspects of your organization contribute to or detract from money flowing through your doors, including strategy, mission & vision, leadership, program delivery & impact, marketing and partnerships. It can give your nonprofit a deep understanding of where you need to focus your efforts and a clear road map for growing your financial sustainability. Download the Financial Model Assessment benefit sheet.
Unlike a traditional fundraising plan, a financing plan is an integrated, thoughtful, and strategic way to help your nonprofit raise enough money to achieve your programmatic and organizational goals. Instead of asking the question: “How much can we accomplish with what we can raise?” you start asking the question: “How much should we raise to accomplish our goals?”
A financing plan galvanizes board and staff to bring enough of the right kinds of money in the door to make your nonprofit’s goals a reality. It creates a sustainable financial model for your nonprofit so that you can survive and thrive. Download the Financing Plan benefit sheet.
If you are trying to make the case for a stronger nonprofit organization download these benefits sheets and share them with your board, donors, staff. And if you would like to talk about these organization building processes in more detail, let me know.
Photo Credit: Johnathan Nightingale
Earlier this month, there was a great post by Linda Wood from the Haas Fund bemoaning the fact that 73% of nonprofit leaders in a recent Center for Effective Philanthropy study said they lack resources to build their leadership skills. And the recent Meyer Foundation Executive Director Listening Project found that nonprofit leaders’ biggest challenges are fundraising, human capital management and board of directors management — all leadership challenges.
This doesn’t surprise me at all.
I constantly witness the lack of support nonprofit leaders receive for building their leadership skills. Leading a nonprofit is an incredibly demanding task and the challenges are only growing. Nonprofit leaders are expected to magically solve the world’s problems, on a shoestring, while herding a disparate group of volunteers, funders, clients.
Which is why I think nonprofit leader coaching holds so much promise for the sector. If a struggling nonprofit leader had a strategic partner who could help her think through staffing, fundraising, board management and strategic decisions, instead of having to figure it out all on her own, it could be transformative.
Nonprofit leader coaching is one-on-one strategic counsel from someone with deep management, financial, and strategy expertise. With a strategic coach, a nonprofit leader can find solutions to issues like how to:
- Create the most effective staffing structure for growth
- Recruit and engage an effective board
- Diversify and grow funding streams aligned with the nonprofit’s specific mission and operations
- Analyze strategic opportunities for the organization
- Develop effective collaborations that build on the organization’s assets
The return on investment of coaching can be really exciting. Let me give you some examples:
Increased Board Fundraising
Fundraising is such a tricky business. Often nonprofit boards are fairly ineffective at it, largely because they and their nonprofit leader don’t know how to focus the board’s efforts. This was true for one of my clients whose board didn’t understand fundraising and was confused about their role. Through coaching, both with the executive director and board members, the board now understands how each of them individually can contribute to bringing money in the door. They also understand how to focus their efforts on the most profitable activities and now have the skills and knowledge to move the organization’s financial strategy forward. As a result, the board has dramatically increased the number of new donors to the organization.
Clearer Strategic Thinking
Nonprofits are constantly bombarded with new opportunities, new partnerships, new funding ideas. A coach can help a nonprofit leader think through how a new opportunity might fit with the overall organization strategy, ask hard questions and analyze the costs and benefits. In this coaching role, I encourage nonprofit leaders to take a step back and examine all of the implications of a decision, how it might draw resources away, what impact it will have on the larger work, how it moves the organization closer to or farther away from strategic alignment, and so on. Coaching can get nonprofits away from group think and towards making smarter, more strategic decisions.
More Productive Staff
Management of staff is one of the hardest jobs of being a leader in any setting, but I think it’s particularly tricky in the nonprofit sector where resources are tighter and nonprofits are often encouraged to play nice at all costs. In coaching around staff challenges, I help a leader create an effective staffing structure for the organization, analyze and resolve staff conflicts, and make sure all staff are playing to their strengths.
Strategic coaching is not right for every nonprofit leader because it takes a real commitment to change, a willingness to analyze situations, and an openness to making difficult decisions.
But coaching is right for a leader who:
- Leads an organization that is ready for change
- Is open to trying new approaches
- Wants to have difficult, but important, conversations with board, staff and funders
- Needs a thinking partner to help make strategic decisions
- Recognizes that she doesn’t have all of the answers
- Is ready to build her leadership skills
Photo Credit: PhilanTopic
As I’ve said many times before, it’s no longer enough for nonprofits to do “good work.” Funders, policy makers, board members are increasingly demanding that nonprofits explain what change they exist to create. With increasing competition for social change dollars it is absolutely crucial that nonprofit organizations develop their own theory of change. This Social Velocity webinar “The Power of a Theory of Change” can help you do just that.
A theory of change is basically an argument for why a nonprofit exists. It describes how an organization uses community resources (money, volunteers, clients) to perform a set of activities which result in changes to the clients’ lives (outcomes) and changes to broader communities, institutions, or systems (impact).
Essentially a theory of change describes how a nonprofit creates social change.
It used to be enough for a nonprofit to talk about what it produced (or outputs), such as meals served in a soup kitchen, hours spent reading to a child, beds provided in a homeless shelter, but that just doesn’t cut it anymore. In a world where there are fewer and fewer dollars and more and more nonprofits fighting for those dollars, people are increasingly asking the question “To What End?” So what if you created outputs, did anything really change because of your work? Did the lives of those in your program change and did the community change?
That’s where a theory of change comes in. If you can articulate what change you hope your organization is creating, then with that fundamental building block in place you can:
- Chart a strategic direction
- Prove your results
- Secure more support for your organization
And ultimately achieve the holy grail of the nonprofit sector: sustainable community change.
The “Power of a Theory of Change” webinar will help you:
- Understand what a theory of change is and how it can help your nonprofit
- Develop your nonprofit’s own theory of change
- Connect your mission to your new theory of change
- Learn how to use your theory of change to chart a strategic direction
- Use your theory of change to attract more funding
- Help your board understand its power
On Demand Webinar
And remember, all Social Velocity webinars are available as on demand downloads, so even if you can’t make this date and time you can still register for the webinar and get access to all of the content.
Photo Credit: frank.itlab.us
One of my resolutions this new year is to add more video to the Social Velocity site. I love watching video, and I’d love to see more nonprofits using the medium, so I thought I should probably follow suit. A few months ago I created a Social Velocity YouTube channel and will continue to add video to it over the course of the year. I also plan to do some video blogging this year, which I’m pretty excited about.
But today I want to introduce my new consulting video. Here I discuss how I consult with nonprofit clients. If you are reading this in an email, you can see the video by clicking here. Take a look!
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