Good management can make you lean, not mean.
Could you, as a nonprofit board member or executive, name the 20% of your operations and/or services you would eliminate today if you had no choice?
Yes, we often argue every service we provide is valuable and we must continue to fund even those services that harm us financially. As visionaries, we see the need for every service. But, as effective managers, we know the organization’s long-term viability must be sustained. Vision is simply not enough. We need to help people get, for example, good and rewarding careers. That’s what matters!
The author notes the majority of donors to our organizations prefer to see their funds go toward direct support services at the impact and grass-roots level. Donors want to know they are affecting change when they give.
They are not considering the need for effective management, which includes talented people and systems. (I saw an instance today where a nonprofit children’s service organization made a significant donation to a local university. If your donors do not want to support internal systems I am fairly confident they do not want their donations funneled to a third party).
Nonprofit leaders, it is noted, are not recognized for being effective managers but for being visionaries. But you can not be an effective visionary if the right metrics are not in place to map your current and future success.
Strategic clarity is the key term and encompasses two questions to the nonprofit. One, what impact are we prepared to be accountable for? Two, what do we need to do — and not do — in order to achieve this impact? Nonprofit organizations far too often measure only the metrics immediately, and conveniently, available.
The Chief Financial Officer dutifully provides the board with the financial update each and every month, for example. But this presents two problems: financial statements are inherently backward-looking and, second, they may have very little significance to the overall impact generated by the organization’s mission.
Nonprofit organizations must define for themselves, and their mission, the appropriate metrics. Teach for America is cited in this article as a prime example of impact metrics. Teach for America measures the metric of having children make one and a half years of progress in one school year. It also measures the number of alumni assuming leadership roles in a wide variety of settings. Metrics that measure impact.
The article concludes with a discussion on hard choices with regard to the management team, especially as an organization grows and evolves over time. First, it is suggested, nonprofits must create a “second in command” or a “chief of staff” to focus on operations in an effort to mitigate “Founder’s Syndrome” or to allow the chief executive to fully function as the visionary and primary fundraiser.
Second, organizations must determine how to address team members who are “passionately dedicated” to the mission, but who are “not able to contribute at the level needed.” It is a cliche but it remains true: it is not just who is on the bus but also where they are sitting on the bus.
The bottom line is the nonprofit organization must embrace the challenge of functioning in an effective manner as the best possible steward of limited resources, especially in an economically challenging environment. We need visionaries to see the way ahead and to project potential solutions the rest of us do not see. But we also need effective managers to deploy and implement the vision. Strive to establish both the best possible fit for your organization.
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