Are You Smaller Than the Problem? 5 Rebellious Ideas Essential to Scaling Altruism. Today’s philanthropy is facing monster-sized challenges. Hunger, poverty, prejudice, inequality — all of it is swelling in size alongside digital media and a massive consumer economy.
Unfortunately, nonprofits aren’t keeping pace. Nearly 90% of nonprofits function with a budget of less than $500,000, and some are much smaller. Only the top 3% of nonprofits operate with a budget big enough to achieve economies of scale, and these icons of the sector control the bulk of the resources and expertise. Like everywhere else, the nonprofit sector is a story of haves and have-nots, and frankly almost every organization belongs to the latter group.
So how do nonprofits achieve sustainable scale and grow to the size of their problems? Not by following the traditional conventions of the sector, but by embracing a bolder and more growth-oriented approach to social impact. That’s why I tell every nonprofit leader who will listen to start living by these five seemingly rebellious ideas.
1. Your assessment should be immediate, honest, and rigorous.
The for-profit world sets a high standard for assessment — even in the minds of the consumer. Most of us wouldn’t even buy a toaster these days without browsing through several dozen user reviews, then taking a look at a few similar products to compare and contrast. This level of assessment and transparency is expected at this point, and it produces results for the company and the customer.
Even in the values-driven world of nonprofit work, you need to assess your organization as early and as often as possible. In fact, studies have shown that nonprofits that engage in organisational assessment as early as the accreditation process are much more likely to build up their organisational capacity in the future. This is because they have an immediate understanding of the resources they possess and the resources they need to acquire.
Once you’ve established such a solid foundation, you need to assess and reassess your individual projects frequently for brutally honest answers about what’s working and what isn’t. Basically, you need to consistently comb through your own ‘user reviews’ and distill them into something that makes sense of the situation. These assessments need to go above and beyond the traditional analysis of strengths, weaknesses, opportunities, and threats (SWOT). They need to be exhaustive, and they need to actively consider the challenges of scale.
2. Your efforts should always lead to an actionable plan.
In 2005, the City of Seattle launched a $10 million campaign to combat homelessness. To manage this campaign, the mayor appointed a prominent, yet recently retired lawyer from within the community. For the first 18 months, this person consulted with almost every stakeholder imaginable, ranging from service providers and neighborhood groups to community coalitions and corporate leaders.
At the end of it all, the public was left with a 247-page document that detailed why more housing — specifically, 50,000 more units of affordable housing in the next decade — was the key to making progress with the homeless population in Seattle. What was missing? Absolutely any details or ideas about how to pay for it.
Knowledge alone provides very little to your organisation. Actionable knowledge, however, is the lifeblood of successful businesses that grow in step with their challenges and opportunities. Unfortunately, nonprofit objectives are often mired in abstract language, and their planning is rooted in unverifiable outcomes. This is why maverick nonprofit leaders don’t walk away from any alignment exercise until an actionable plan is in place.
3. Your plan should be bold and business-focused.
You don’t need a strategic plan. You need a business plan. You don’t need an abstract mission statement. You need a big, hairy, audacious goal — a term first coined by Jim Collins and Jerry Porras in their book “Built to Last: Successful Habits of Visionary Companies” — with verifiable targets at every step. The most highly-endorsed business strategies didn’t get that way by accident. It’s because they work.
Don’t fall for the ‘myth of uniqueness.’ Nonprofit missions may be driven by unique values, but the economies in which they compete for attention are the same as any other organisation. Your organisation may not be primarily concerned with over-and-above profits, but what makes it succeed and what makes it fail at its mission have direct corollaries in the business world.
This is nothing new. In their now widely recognized article in “Stanford Social Innovation Review,” Heather McLeod Grant and Leslie R. Crutchfield wrote that the number two hallmark of a high-impact nonprofit was their ability to “make markets work.” This means accepting the fact that the powers of self-interest and the established laws of your industry far outweigh the appeal of altruism as its own reward. This means you need plans that are bold, measurable, and business-oriented.
4. You need to test that plan with critical stakeholders.
Criticism is an unavoidable part of any success. Aristotle implied as much when he wrote, “There is only one way to avoid criticism: do nothing, say nothing, and be nothing.” Still, many nonprofit organisations seem hell-bent on drafting plans and creating relationships that take criticism completely out of the equation.
This sort of environment does everyone a disservice. Criticizing philanthropy is an important part of meaningful change within the industry, questioning power imbalances and reframing funding relationships. On top of that, criticism is a safeguard against inefficiencies and other potential oversights, especially when this criticism involves stakeholders with overlapping interests in your nonprofit organisation.
Treehouse, a prominent nonprofit providing much-needed services to the children of Washington State, is a perfect case study for this sort of criticism. During their initial planning for new growth objectives, the executives couldn’t agree on how big to make their projections. Were they being too bold? Were they being too cautious? It wasn’t until they enlisted the confidential feedback of 30 of their most active stakeholders that they got the confidence to ‘go big or go home.’
5. You need monitoring dashboards to ensure execution.
Have you heard the story about the blind men and the elephant? None of these men have encountered an elephant before, and they are trying to get a sense of what it’s like by touching small parts of the animal one at a time.
The first feels his side, thinking it’s a wall. The second feels his tusk, thinking it’s a spear. The third feels his trunk, thinking it’s a snake. The fourth feels his leg, thinking it’s a tree trunk. The fifth feels his ear, thinking it’s a fan. The last one feels his tail, thinking it’s a rope. No one can conjure up an accurate picture of the elephant with such limited information, much like no organisation can actually measure its success without monitoring its performance in full.
When it comes to performance metrics, the for-profit world isn’t just looking at the whole elephant — they’re staring at it without blinking. This is why nonprofits that want to achieve real scale need a monitoring dashboard that ensures the execution of their newly minted business plan.
That’s right. Business plan.
