by Mark Oppenheim
Nonprofit funding and operating realities are changing rapidly, and we must quickly reset and reshape our orgs for these challenging times. We’re clearly at a point where many nonprofits will need to rebuild the bicycle while riding it… figuratively speaking. We can do this if we adjust to current circumstances with focus, energy and optimism.
Funding cuts and other changes are not happening at the same pace for all nonprofits and geographies, but cuts and changes across the board are in-process. If your nonprofit hasn’t been affected yet, it will be soon. Arts, poverty, education, elder and child care, disability services, environmental, health, research and other programs are all being hit. Huge shifts are underway related to how nonprofits will interact with oversight entities, and significant job cuts are underway at agencies that provide support and coordination to nonprofits.
To properly serve our constituents and advance our mission through these times, boards, management teams and approaches must adjust in ways that are tailored to the circumstances of each nonprofit, each mission, each community.
A Practical 4-6 Week Approach to a Reset/Reshape
Traditional strategic planning takes too long and is too expensive for most small to mid-sized nonprofits, and by the time such a plan is developed, agreed and published it is often outdated. I’m certainly not against strategic planning. However, it is becoming increasingly obvious that we all need to adjust right now at a tactical level to rapid changes affecting the funding and programs of almost all nonprofits.
Most nonprofits need just two things to reset/reshape their organization. First, we need to build board and senior management team consensus around operating and financial challenges for the next 12 – 24 months. Second, we need a prioritized list of specific actions that different parts of the org will take (along with deliverables and milestones) to improve earned & contributed revenue, services, operating infrastructure, workflows, financial management and governance.
Once the plan is developed, its execution can be monitored by the chief executive and the board to ensure milestones are achieved. Each department will have specific goals that attach to the plan. Achievement of these goals can be integrated into quarterly and annual employee evaluation processes, compensation reviews and into board oversight practices.
A range of approaches to this are offered by a vast array of consultants and independent actors. m/Oppenheim’s is called Strategy Alignment Support. It’s a 4-6 week process provided at modest fixed cost to fund the work on a break-even basis. We work this way because in these times nonprofits need a practical approach that can be quickly executed. We consider this work to be a civic duty, which is why I’m sharing the approach here.
Topics should be shaped to the needs of each nonprofit, and can include tailored versions of the following:
- Governance (including a review of the nonprofit’s purpose, its mission & values, governance standards, and board bylaws)
- Constituents (these are the people ultimately served by the nonprofit, and can include: clients, visitors & patrons, allies, and nonprofit, business and government partners)
- Programs and Services (these are the core services and programs of a nonprofit, depending on sector and services, and can include exhibits, education, performances, health services, environmental programs, scientific research, housing, etc)
- Contributed Revenue (including individual, corporate/business, government, and foundation, and the various ways that contributed revenue is solicited)
- Earned Income (from gov/private contracts, tickets, tuition, rents, concessions, merchandise, endowment, fee-for-service arrangements, etc)
- Marketing & Communication (which includes internal, external, branding, website, social media, advocacy)
- Financial Management, Reporting, Compliance (budgeting, accounting, reporting, controls, asset & cash management, etc)
- Facilities and Operating Infrastructure (for nonprofits with considerable property and a large staff to manage)
- Information and Communication Technology (inhouse and customer-facing, security & backup, communications tech – tech is ubiquitous and expensive, so right-sizing tech is very important)
- Human Resources (org chart, right-sizing and mapping of staff & board capabilities to the needs of the nonprofit, identifying areas of improvement, workflows, standards for employees, objectives & metrics, comp & benefits, culture, training, entry to exit processes hiring processes)
The tailored version of the above analysis results is a prioritized list of specific actions that different parts of the org will take, along with deliverables and milestones. Once the plan is developed, its execution should be monitored by the chief executive and the board to ensure milestones are achieved. Monitoring means that execution progress reports should be integrated into quarterly and annual employee evaluation processes, compensation reviews and board oversight. Particularly when annual evaluations are orchestrated by a neutral outside third party, such evaluations can be a potent tool for improving performance and strengthening nonprofits on a sustained basis. Such performance evaluations are not lip-service or rote performance reviews – evaluations are tied to deliverables in the plan, and if people do or don’t deliver according to plan it becomes obvious to the organization as a whole. This enables the org to adjust tactics on the fly, and recognize those who contribute most to success.
These kinds of plans generally have a shelf life of about a year, so having a cadence of an annual refresh is beneficial. If an overarching multi-year strategic plan exists, this kind of plan fits within its context.
Final thoughts…
Nonprofits (and businesses) have a tendency to run on inertia until what worked last year won’t work next year. We’re at that time and place. Nonprofits that immediately adjust to new operating circumstances will have a significant leg up, and having a 4-6 week approach to a reset/reshaped org might make all the difference.
Nonprofit boards can undertake this work without support from consultants IF volunteers have required sector expertise related to the nonprofit’s workflows, systems, services, programs, constituents and operating metrics. An organizational development consultant on the board, someone with really good experience strengthening operating and financial metrics for similarly sized nonprofits or businesses, can be invaluable in these circumstances. If you don’t already have a sitting board member with this kind of experience, you might want to consider recruiting such a person to your board.
If you’re interested in talking with us about how your nonprofit can undertake this analysis yourself or with our assistance, please email info[@]moppenheim.com or call (415) 762-2650.