strategic issues in nonprofit management3141
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Strategic Issues in Nonprofit ManagementTRANSCRIPT
Nonprofit Leadership: Maximizing Impact
April 27, 2009UPEACE Centre for Executive Education, Costa Rica
“Empowering leaders to transform challenges into opportunities”
Agenda for the morning Introductions
Overview of nonprofit organizations
Strategic Planning– Mission Statements – Theory of Change– Intended Impact
Activity on gaining strategic clarity
The Learning Pyramid
Lecture
Reading
Audiovisual
Demonstration
Discussion group
Practice by doing
Teach others / immediate use
Av. retention rate after 24 hrs.
5%
10%
20%
30%
50%
75%
90%
D. Sousa, (2001). How the Brain Learns
Some key themes in this course
These are times of tremendous change and therefore tremendous opportunity
The traditional boundaries between the for-profits and nonproftis are changing
Given the complexities of nonprofit leadership, strategic discipline is essential
Overview of Nonprofit Organizations
Nonprofit Organizations
Organizations which enjoy tax exempt status as a result of being organized to serve a broad public interest.
Nonprofits and profits Nonprofit organizations are permitted to generate
a profit
However, nonprofits may not distribute their profits to their staff or directors – nondistribution constraint
Surplus must be used to further the mission of the organization
Why do we have nonprofits? (in pairs)
The nonprofit world has been experiencing significant changes
Increasing privatization of government services (education, health care, social services, the arts)
Increasing financial pressure on nonprofits
Increasing concerns about the efficacy of nonprofits
Increasing corporate social responsibility initiatives and funds
Other trends?
Source: Social Enterprise: Private Initiatives for the Common Good (Harvard Business School)
Some of the management challenges of the nonprofit enterprise
Defining and measuring success (economic stability and growth is a subsidiary goal).
Raising funds – cannot sell the company ‘shares’
Attracting and motivating people given the often limited resources and the nondistribution constraint (no profit-based incentives)
Strategic Planning in Nonprofits
What is strategy?
Getting critical resource decisions right – allocating time, talent, and money to the activities that have the greatest impact – is what “strategy” is about.
Source: The Bridgespan Group is a nonprofit,501(c)(3) organization applying leading-edge management strategies, tools and talent to help other nonprofits and foundations achieve greater social impact.
Strategic Planning
The process of developing a comprehensive document that sets forth what and organization is working to accomplish and how it intends to succeed
Source: The Bridgespan Group
The Strategic Plan
Connects the mission and the programs
Establishing performance measures that are understandable to all
Encourages strategic thinking – the best allocation of scarce resources
The strategic planning process is as valuable as the end result
Four main components of strategic planning
1. Strategic clarity – Mission statement– Intended Impact– Theory of Change
2. Strategic priorities: What specific actions and activities must take place to achieve the intended impact
3. Resource implications: To pursue the priorities, and the plan to secure them
4. Performance measures: Establishing the quantitative and qualitative milestones to measure progress
Source: The Bridgespan Group
The University for Peace’s Mission Statement:“To provide humanity with an international institution
of higher education for peace and with the aim of promoting among all human beings the spirit of understanding, tolerance and peaceful coexistence, to stimulate cooperation among peoples and to help lessen obstacles and threats to world peace and progress, in keeping with the noble aspirations proclaimed in the Charter of the United Nations".
Which functions does this mission statement fulfill?
The Earth Charter Initiative
The mission of the Earth Charter Initiative is, "To establish a sound ethical foundation for the emerging global society and to help build a sustainable world based on respect for nature, universal human rights, economic justice and a culture of peace."
The mission is the centerpiece of the nonprofit organization It serves a boundary function
Serves to attract and motivate stakeholders (donors, staff, and clients)
Should help in the process of evaluation
The challenge could be see to create a mission statement that is specific enough to inspire, but sufficiently broad to allow strategic redirection
A nonprofit’s theory of change:
Theory of Change: Explains how the organization’s intended impact will actually happen.
In other words, why will the organization’s approach bring about the desired change.
To clarify a nonprofit’s theory of change, ask:
1. What are the most important elements of our programs?
2. What assumptions led us to choose these particular program element?
3. Are there other ways to achieve the desired outcomes? Why are we not taking that approach?
A nonprofit’s Intended Impact provides a bridge between mission and programs
Intended Impact: Is a statement about what the organization is trying to achieve and will hold itself accountable for within a period of time. It identifies both the benefits the organization seeks and the beneficiaries.
To clarify an organization’s intended impact, ask:
1. Who are the beneficiaries?
2. What benefits do our programs create?
3. What won’t we do?
2. Determining strategic priorities is the next stepLooking at current programs
– How do they align with mission, intended impact and theory of change?
– How much do they cost? (per outcome?)
– Do they play into the organization’s strengths?
– How do they compare with peers?
– Changes that should be made?
• Modify
• Add new ones
• Discontinue
3. Resource Implications – human and infrastructure
What will it cost to implement? What’s the gap? Financial projections for new strategy
– Scenario planning
UPEACE Strategic Planning…star, constellation, galaxy
4. Performance measures Need to collect data – INDICATORS
Program milestones– Quantity– Quality
Operational milestones– Human resources– Infrastructure
Financial milestones– budget
In establishing performance measures, it is important to be clear about the timing and ownership
Measuring success in nonprofit organization
1. What makes measuring success particularly difficult in the nonprofit environment?
2. What was the problem with the ‘bucks and acres’ measurement system of the TNC?
3. What approach did the American Cancer Society (ACS) adopt given its challenge?
4. Any questions/points you want to discuss on the reading?
Small group exercise on developing strategic clarity1. Select one member in your group to share his/her
organization’s mission and main programs
2. Work together and draft the organization’s ‘Theory of Change’ on your ‘flip chart’
3. Clarify the organization’s ‘Intended Impact’
4. Discuss what indicators are currently being tracked. What should be added?
Lessons learned from ‘Measuring what matters in Nonprofits’
Measuring mission depends on measurable goals
Keep measures simple and easy to communicate
Measures are marketable
Measures are only as good as the use to which organizations put them
Returning to the milestones over time is a sign that your organization is continuing to think strategically
Managing in Tough Times
1. Act quickly, but not reflexively, and plan contingencies.
2. Protect the core3. Identify the people who matter most and
keep the group strong4. Stay very close to your key funders5. Shape up your organization6. Involve your board7. Communicate openly and often
How is your organization reacting the ‘financial crisis’?