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How-to Library • Featuring articles from past issues of Contributions

Does Your Organization Have What it Takes?
Groundbreaking work raises eyebrows

by James Gelatt

One of the enduring questions we all address in our work with nonprofits is: What makes for success?

If your first reaction to that question is: Been there, done that – I’m with you. At first blush, one might think this is hardly new territory. Au contraire. There is actually some work done recently that is not only new, but even groundbreaking – and well worth learning about.

Up until now, much of the theory about what makes for success came from the for-profit sector. Many of us read In Search of Excellence, by Tom Peters and colleagues; or Jim Collins’ From Good to Great. While these had some applicability, the application was flawed:

Tom Peters recently disclosed that, despite the enormous success of In Search of Excellence, he and his colleagues determined what came to be seen as the essential factors by, well, winging it. In a recent article, Peters says that he came up with the list of essential success factors out of necessity. He had a presentation to make the next morning, so he came up with the list sitting in his hotel room.

I’m not saying that Peters and his colleagues did not have ample anecdotal information to draw on. They were privileged to visit many of the most prestigious companies in the country and around the world. But they did not come to the conclusions that form the basis of their book by anything more than intuition driven by a time crunch.

Peter Drucker’s foray into the nonprofit world is no more scientific. Drucker’s work, while still greatly admired in management literature, was also based largely on his personal observations. He then transposed those observations into the nonprofit sector.

In both instances, we have been relying essentially on opinion – informed opinion, to be sure, but opinion nonetheless.

The good news is that we now have solid information, grounded in research and clearly presented, that provides an answer to the question of what makes for success in the nonprofit sector.

The book is Forces for Good: The Six Practices of High-Impact Nonprofits. It is written by Leslie Crutchfield, whose credentials include being a grantee of the Aspen Institute’s Nonprofit Sector and Philanthropy Program, along with an MBA from Harvard; and Heather McLeod Grant, an advisor to Stanford’s Center for Social Innovation and a research fellow for Duke University’s Center for the Advancement of Social Enterprise, and herself an MBA from Harvard.

Some of what the authors found out will surprise you. But before I share their findings, it’s worth pointing out the research on which the findings were based. In Phase I the authors (then researchers) came up with a definition of “high impact.” Essentially, their definition was derived by looking at nonprofits that had a substantial and sustained level of results, in the opinion of surveyed experts; and seeing which nonprofits also had an impact that in some ways affected the whole “cause” in which they were involved.

They then conducted a national survey of nearly 3,000 nonprofits, drawing on lists made available by a range of entities – large ones such as The Chronicle of Philanthropy and smaller nonprofits still in their start-up phase. Out of the results of the survey, the authors selected twelve nonprofits for in depth case study; analyzed the huge amount of information gathered; and drew conclusions.

Herewith:

Six Myths About Successful Nonprofits

Some of what the authors found runs counter to what we might consider conventional wisdom.
The myth of perfect management. Some management is necessary, but it is not sufficient to predict organizational success.

Brand-name awareness. Some of the most successful nonprofits examined have no perceivable focus on marketing or visibility.

A breakthrough new idea. Some successful nonprofits have taken relatively old ideas and “tweaked” them. Their success came from implementation.

Textbook mission statements. What the research found was that it’s not about writing the most perfect mission statement. It’s having a compelling mission and vision, and shared values – and the obsession with their impact.

High ratings on conventional metrics. Standards tend to reveal more about low-impact nonprofits than those that are very successful.

Large budgets. There is no clear corollary between size and impact.

So What is the Secret to Success?

In short, it’s the ability to mobilize every sector of society – government, business, nonprofits, and the public – to be a force for good. As the authors note: “Greatness has more to do with how nonprofits work outside the boundaries of their organizations than how they manage their own internal operations.” The most successful nonprofits work through and with others to create greater impact.

The Six Factors

Uncovered in Forces for Good are the following factors:

1) Advocate and serve. High impact nonprofits are involved both in serving others and in influencing positive systemic change. Systemic change involves working in public policy. There needs to be a bridge between service and advocacy – and the nonprofit needs to be good at both.

2) Make markets work. High impact nonprofits recognize that tapping into self-interests is more powerful than appealing to pure altruism. They encourage companies to do well while doing good. And they build partnerships and joint ventures, in order to leverage their impact.

3) Inspire evangelists. The nonprofits found to have the most impact see volunteers as true assets and create “meaningful ways to engage individuals” and “connect [them] to the group’s mission.” In doing so, the nonprofits seek to inspire persons who will carry the word, helping the nonprofit to build strong communities and connections.

4) Nurture nonprofit networks. I’ve worked with a lot of nonprofits in strategic planning, and it’s interesting how often the planning sessions speak of between the competition – as if having someone else providing valuable services to those in need was a bad thing. By contrast, high impact nonprofits help the competition succeed. They are not afraid to share the wealth, expertise, talent, power. And in so doing they advance the larger field.

5) Master the art of adaptation. Modify tactics as needed; respond to change. Learn from mistakes: Listen, learn, modify, stay relevant.

6) Share leadership. Distribute leadership throughout the organization – and beyond. Empower others. Cultivate strong teams.

The New Nonprofit Paradigm

As a way of graphically depicting what they learned about the differences between high impact nonprofits and others, the authors provide this comparative chart.

 

High Impact NPs Do This … Not This
Work externally Focus on their organization
Leverage to change systems Use growth to scale impact
Do what it takes within core values Rather “be right” than “win”
Advocate and provide services Provide services; avoid politics
Utilize market forces, businesses Transactional: See volunteers as free labor, donors as check writers
Engage others in meaningful experiences; long term relationships Nonprofits are competitors
Nurture networks Become mired in bureaucracy
Continually adapt Command and control
Empower others Neglect infrastructure
Invest in the basics Focus on process, not output

So What’s the “Take Away?”

A student in one of my Executive MBA seminars used to always ask that question at the end of each class. What’s the take away? What have we learned?

To me, the most important message may be to rethink our focus as nonprofits. Just as the book Blue Oceans stressed the importance of looking past competition to creating a new way of doing business, so too does Forces for Good encourage us to rethink the traditional paradigms that have in fact become boundaries.

Nonprofits can at once serve a population and a greater good. They can work effectively with the for-profit sector without selling their soul. They can work in cooperation with others who may also be going after the same donors. And in so doing, just maybe, they can teach the for-profit world what real leadership is all about.

James P. Gelatt, PhD, is the author of Managing Nonprofits in the 21st Century and general editor of Aspen's Fund Raising Series for the 21st Century. He is the president of Prentice Associates, a management consulting company specializing in associations and other national nonprofits, and a past-president of the Greater Washington, D.C. chapter of the National Society of Association Executives.

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