Social sector

One Reason Why I Love the Nonprofit Sector

Image: Maayan Ohayon

Image: Maayan Ohayon

At Wellspring Consulting, we work entirely with nonprofits. I am often deeply moved by the leaders in our client organizations, their selfless approach, and the missions they are serving.

I vividly remember one day when we were helping the leadership team at Open Circle rethink their pricing. Open Circle trains grade-school teachers in methods to help their students learn how to get along interpersonally. To assess Open Circle’s pricing, we studied their competitors, interviewed their customers, and built an economic model of their costs and revenues. We found that Open Circle could charge more for their services, and we suggested that they do so.  But Lisa Sankowski, Associate Director at Open Circle, pushed back, saying, “We wouldn’t want to charge the schools more. They’re already under enough economic hardship, and higher prices would only make it harder for them.”  So we chose not to increase prices to the schools. Instead, we presented funders and donors with a clear depiction of Open Circle’s economic model to demonstrate why additional support was needed. This worked. Open Circle raised more money and met their economic needs.

To me, Lisa’s response crystallizes something I love about the nonprofit sector, and which I have seen many times over. Leaders of nonprofit organizations care deeply about the ultimate wellbeing of their customers. Laura Walker, President and CEO of New York Public Radio stayed at the radio station through the terror of 9/11, keeping it open while the frightening chaos rained about their offices. Thanks to her bravery, listeners all over the city were helped in their response to the crisis. Debbie Bial, Executive Director at Posse Foundation – which supports low-income youth in going to top colleges – communicates an infectious enthusiasm about Posse’s kids, their talents and their potential. Through her leadership Posse now operates in ten cities across the country, and she has personally taken scores of photos of radiant young adults on their college graduation day, which now hang on the walls and website pages of the Foundation. And Kathy Douglass, who left a lucrative career as a partner at one of the top law firms in New York City, founded In Motion, an organization providing free legal services to victims of domestic violence. Over 20 years under her guidance, the organization has served thousands of women.

Daily, I am touched by such leaders’ caring, vision and tenacity. I believe in them, and what they are doing. I am stirred by the amazing ways they are making change happen. And through them, I am able to be a part of something much larger than myself.

Four Ways to Address a Problem that Won’t Go Away

We are currently working with a client that provides services for victims of crimes, particularly victims of family violence such as domestic violence and child abuse.  Family violence is a persistent issue upon which it seems almost impossible to make a dent. And so, our client wanted to know how they can have greater impact.   To find possible approaches to answer this question, we looked at how other organizations strive to have impact in the face of an enduring, seemingly insurmountable, problem.

Four aces picture

We found four possible approaches employed by other organizations, which we coined, “go upstream,” “a banner to march behind, “expand the picture,” and “strength in numbers.” 

The National Audubon Society typifies what we called “go upstream.”  This organization began with the mission of protecting birds and their habitats.  But soon an important challenge became clear:  all habitats were increasingly impacted by climate change, leading to negative consequences for birds everywhere. The “go upstream” approach posits that one’s mission is served not only through intervention services aimed at solving certain issues, but also by working on the environmental factors which cause the issues to occur in the first place.  So, The National Audubon Society decided to “go upstream” from the bird territory and now has a more general focus on protecting the environment with the downstream goal of saving birds’ habitats.  What could this mean for our client?  Perhaps they address those things that contribute to family violence occurring in the first place, like poverty. Or, they work to prevent the perpetuation of the cycles of violence by helping abused children heal from their trauma, thereby reducing the likelihood that they will grow up to be re-victimized or will abuse others.

“A banner to march behind” is well exemplified by The March of Dimes.  The assumption behind this approach is that to make a greater difference, one must mobilize the public to develop awareness and a sense of outrage about the issue.  For The March of Dimes, the mission of decreasing birth defects and pre-term birth would not be accomplished with medical research alone, and thus The March took to the streets to get the public involved with fighting for this cause.  Mothers Against Drunk Driving (MADD) is also a good example of an organization which used “a banner” to realize impact, namely a significant reduction of alcohol-related traffic accidents.  Our client, therefore, could consider starting a movement to generate awareness and outrage to help combat family violence.

Terracyle is an example of “expand the picture,” which posits that to make more of a difference, one must engage all involved components of the problem to be part of the solution. Terracyle started out working to eliminate food waste by using it to create quality fertilizers.  The fertilizers reduced some waste, but landfills kept filling, and so TerraCycle sought to make a broader impact.  Today, Terracyle focuses on eliminating many kinds of waste by creating new product lines and mobilizing people to recycle.  For our client, expanding the picture could mean not just working with the primarily low-income, female population it currently serves, but adding services for batterers, wealthy victims, or victims who choose to stay in relationship with their abusers.

Finally, “strength in numbers” is typified by East Meets West (EMW).  The premise here is that one organization can’t make a significant difference on large issues by itself; working together with others with similar missions means that the impact is exponentially increased.  East Meets West started out providing grassroots humanitarian aid in Vietnam, but they soon realized the problems were too big for them to significantly affect on their ownEMW transitioned from offering humanitarian services to building a network of similar organizations that share back-office capacity and learn valuable skills from one another.  Our client could realize this approach through creating a network of similar organizations or employing a regional or national expansion strategy to have a greater impact.

The problem of a persistent societal struggle is one that many non-profits face. These four approaches show how some nonprofits have addressed such struggles in ways that can be applied by others.

We’re Growing... But Not Yet

Growth makes for an inspiring organizational story. Boards of Directors and staff can be mobilized around growth. But if work must be done in the near term in order to prepare for growth later, the story may be less than inspiring. People may ask, "If we can't make growth happen now, why expect it in several years?" I faced just this situation recently. One of our clients had just come off a highly successful run of completing innovative projects and raising a large amount of funding to support general operations. However, most of their major projects were nearly complete, and a campaign for unrestricted revenue was ending. These efforts seeded a huge potential for new, innovative program work and an increase in revenue, but that potential was unlikely to be realized until after several years of less outwardly visible initiatives—to plan and begin working on new educational projects, to align work internally and to improve their internal functioning. This organization therefore faced a major challenge: how to communicate with their Board about why growth wouldn't be realized right away, while still telling an inspiring story.

This nonprofit found a way to mobilize their Board members. Rather than avoiding a discussion about two years of flat budgets, the Executive Director explained exactly how the organization was preparing for growth in the future. She shared their new fundraising tactics. She described how increased coordination among staff groups would leading to higher organizational effectiveness.  She worked with her staff to develop a balanced scorecard for the organization, and committed to sharing the results regularly with the Board. And, she asked her Board to help realize the growth by forming committees around a new set of products; reaching out to bring their friends to events; and helping to find new trustees with expertise in needed areas.

As a result, Board members were galvanized and excited. Rather than being disappointed that growth would wait for several years, they were inspired to help realize future success. They understood how they could contribute, and could see clear links between the organization’s plans and the outcomes predicted.

What is the Right Organizational Structure for Us?

Org chart 24Mar14-001
Org chart 24Mar14-001

Over the years, I have worked with Chief Executives seeking to get their organization's structure right. They have grappled with questions such as: Should we have a COO to oversee operations? Do we need Regional Directors to run areas of the country? What control should the national office have over local offices? To whom should the Development Director report? One way to answer such questions is to use objective criteria. For instance, a span of control greater than 6 or 7 is a stretch. Or, work conducted by senior people should be delegated down to those more junior wherever possible.

However, objective criteria alone cannot specify an organization's structure. There is the human factor to consider -- we all come with our idiosyncrasies. Take the case of a brilliant Program Director who is expecting a promotion to the COO position, but isn't strong in management and delegation skills. Moving someone else into the COO role could cause the Program Director to leave, while the promotion might cause him to flounder. A third option of assigning an excellent Project Manager to work with the Program Director in his new role could lead to success. Consideration of human factors -- the specific capabilities of the people involved -- leads to an improved solution.

An organizational structure solution may also be temporal -- its value having a shelf life. Because a given structure tends to optimize for some factors while attenuating others, using one structure for too long may cause problems to arise. To address this, organizations may alternate between different structural approaches. For instance, in a national organization with affiliates and a central office, a period of tighter central-office control aimed at reining in quality infractions may be followed by a more laissez-faire approach from the central office to stimulate local innovation. Organizational structures may oscillate over five-to-ten-year periods, first optimizing for one thing, then another. 

Finally, it is useful to remember that a structural solution can only go so far in solving an organization's problems.  People may need to be replaced, or training may be in order. Conversely, when an organization's staff is excellent, one of several different organizational structures may work just fine.

Don't Fundraise for Your Means, Fundraise for Your Ends

Money stars
Money stars

Would you donate money to help improve the skills of a teacher? Or, would you be more motivated to donate so the children in that teacher's classroom would get a better education, and would be more likely to stay in school?

Would you donate money to help a scientist track the pounds of carbon released into the atmosphere? Or, would you be more motivated to donate so that better carbon emission data from that scientist would influence public policy leading to reduced carbon emissions, and thus slow global warming?

Glynwood Center, a nonprofit dedicated to sustainable land use was raising money for a program that brought  together land developers, town officials and land owners to decide on the best use of open space. When the organization asked donors to "Help us bring people together to decide on the best use of open farmland," funding support was meager. When Glynwood Center changed its message to "Help us save farmland," their funding increased dramatically.

Habitat for Humanity in Wilmington Delaware would report the number of homes built each year to its funders. When  the organization added information about the reduction in crime rates and increased employment due to their new homes, funders were more interested in providing support.

Tell your donors about the ends you are furthering -- the benefits to individuals, to society or the environment. The dollars are more likely to roll in.

Is My Organization Creating Benefit? Four types of rationale

City_Harvest_Truck
City_Harvest_Truck

I expect it is important for you to know if your organization is creating social benefit. I think about this a lot, both with the clients we serve, and for our consulting firm. Donors, funders, constituents, and employees also want to know.

Here are four different types of rationale to ascertain the benefit created by an organization. While a higher level of proof may be more desirable, it is not feasible to fully prove benefit for all activities. Thus, all four rationale can be acceptable tools to inform leaders and decision-makers.

  1. An observable, causal relationship - When City Harvest collected 46 million pounds of food from the food industry and distributed them to hungry people, there was an observable, causal relationship: hungry people have been fed. City Harvest can declare the benefit it achieves based on such numbers.
  2. Evidence-based research indicating a causal relationship - The Parent Child Home Program conducted longitudinal research showing that children who had been through their program graduated from high school at higher rates than control groups. This demonstrated a high likelihood that other children going through the program would have their chance of graduating from high school  increased. The Parent Child Home Program can use this longitudinal research as convincing evidence of its benefits.
  3. A theory of change - When Garrison Institute brings together environmentalists, industrialists and government officials and uses meditation to help them find new solutions to environmental issues, Garrison Institute believes that this will help stem environmental degradation. Because this result is difficult to measure given the vast array of factors impacting the environment, Garrison Institute relies on its theory of change to guide its choices and verify the value of this work.
  4. A personal desire - Ethel Donaghue established the Donaghue Foundation with a vision of "continual improvement in people’s health as a result of research being converted to practical benefit." In doing so, she made a choice about where to focus her resources, based on a personal desire. Given that Ethel Donaghue passed away in 1989 leaving her foundation as a permanent legacy, at this point no proof is needed to determine if Ethel's vision is where the foundation should invest.

Capital is More than Money: Four Types of Capital

Recently, during a meeting  with the Hyams Foundation I learned about Matthew Wesley's idea of four types of capital: Human, Cultural, Social and Financial. Rather than considering financial capital alone, all four types of capital should be included when charting a successful future. Matthew Wesley applies the concept to families who have remained successful across many generations. At the Hyams Foundation we found the concepts to be applicable to organizations and philanthropic institutions as well.

Financial Capital refers to the financial assets an entity has to invest in its future. Capital is different from income. High revenues can be offset by higher expenses, eroding financial capital. It is financial capital in reserves, unspent, that bolster an organization.

Human Capital is the resources that individuals and groups have, such as education, emotional resilience, physical health, and self-esteem. This capital can be built over time, and can also be eroded through poverty, natural disasters or other misfortune.

Social Capital relates to the development and maintenance of social networks, helping us to attain our goals while we help others attain theirs. The pattern of social networks has been changing dramatically in recent years with the advent of the virtual world.

Cultural Capital relates to the mindsets, the ethos carried by a group as it moves along its path. Culture is commonly conveyed through stories which demonstrate "how we do things around here." Culture can be a powerful foundation for an organization's equilibrium, and if eroded can cause the organization to falter or even fail.

In thinking about your organization, consider all the forms of capital that influence its success.  Human, social and cultural capital can be as powerful as financial capital in securing the future.

Musings on measurement

Recently I’ve been thinking about the role of measurement and quantification in the social sector.  Over the past decade or two there has been an increasing push to quantify and measure everything – and those calling for measurement are looking for outcomes, not just inputs.  Overall, I think this makes a lot of sense.  There are billions of dollars pouring into the social sector – it’s a good idea to have a sense that those dollars are spent wisely and, ideally, are creating as much good as possible. At the same time – I think there needs to remain room for the human side.  Yes – I’m a quant girl by background and experience – but I don’t think all things are measureable, or should be quantified.  I believe sometimes you just need to believe that something is a good thing, that it makes a difference, and that the difference is worthy of support.

I’ve had the great fortune to work with a wide variety of non-profit organizations.   One of my recent clients was an organization that brings joy and normalcy to seriously ill children.  Because of this organization, many of these children achieve amazing transformations. These children come to realize that they can fit in, that they can have hope and ambition.  One of the Board members was pushing for a way to measure the cost effectiveness of the organization’s approach – maybe there was a cheaper way to serve these children.  Interestingly, the strong majority of the Board was not energized by this call for measurements.  Rather, they were motivated by the individual stories of triumph and transformation.   And they understood that sometimes you can’t deconstruct magical experiences to their core components so as to replicate them at a lower cost.

Perhaps I sound heretical, and I certainly am not advocating against all measurement of outcomes.  I’m just saying that there still needs to be space for the simply human – for understanding that while providing a meal to a hungry individual might cost $3, and providing a college education to another might cost many thousands of dollars – that happiness, security, hope, ambition are all priceless – and there’s value in that.

For Whom Do You Really Work?

I came to my work in the social sector with a desire for selfless service. Perhaps you did too. I hope to make the world a better place, to leave everyone I meet a little better off. But these aspirations can get eclipsed by my self-oriented desires. Of course, there is benefit in working for self-fulfillment. But if my dominant urge is to build my own stature, my ability to further the common good is attenuated. My choices become subtly directed towards enhancing myself and I become less creative and vital in furthering others.

Facilitating a Board retreat at Garrison Institute, I am reminded of my commitment to selfless service. The wisdom of contemplative practice, as furthered by that institution, increases my awareness that my success is interlinked with your success. It is through benefiting others that my greatest rewards will come.

All the spiritual traditions teach that deep happiness comes from serving others. This, ultimately, is what I seek.