3 Keys To Nonprofit Success

Insights from Three Things Every Growing Nonprofit Needs to Scale by Kathleen Kelly Janus and Valerie Threlfall (Stanford Social Innovation Review, 2016).

In 2016, nonprofit researchers/consultants Kathleen Kelly Janus and Valerie Threlfall published findings from their survey of “high-performing social entrepreneurs.” They noted that despite the stereotype depicting the Steve Jobs-type lone visionary, “one person can’t possibly be responsible for the success of an entire organization.” Janus and Threlfall surveyed more than 200 social entrepreneurs and found three common elements to an organization’s early success: “teamwork, metrics, and access to capital.”

Teamwork

A high-functioning team is critically important. Good hires and strong board support are well-known factors contributing to successful nonprofit organizations.

But where nonprofits often misstep is failing to hire senior leadership. In an attempt to minimize overhead and prioritize programs and services, we often see organizations with a ton of front-line service staff and very few leadership positions. This inevitably means that organizational leaders, even the Executive Director, are very involved in operations and aren’t able to give sufficient time and attention to strategy and capacity building.

Hiring senior leaders early is especially critical to an organization’s ability to scale. We found that the most critical leadership hires to support scale are colleagues who can manage the day-to-day work, thereby freeing up the Executive Director to focus more on strategy and fundraising. The senior leadership team is also an important source of strategy advice, with 73 percent of respondents saying they rely on their senior leaders for strategic input.

What can funders do? Fund and support leadership training opportunities such as executive coaching and professional development.

What can nonprofits do? Reconsider your organizational chart. Invest in professional development for all levels of leadership. Learn how to hire well, and be willing to make difficult changes -- possibly including termination -- for underperforming staff.

Metrics

The survey also found that organizations that tracked outcomes from the beginning grew much more quickly than those that didn’t. This matters in two important respects. First, early data allows organizations to improve their programs and services rapidly. Secondly, organizations are able to “talk about their impact in a data-driven way that is attractive to funders.” 

What can funders do? Don’t just demand a logic model and key objectives. Work with applicants and grantees to develop key performance indicators, measurable outcomes, tracking systems, and reporting functions by providing (or providing funding for) technical assistance in collecting impact data.  

What can nonprofits do?  Develop an evaluation plan and invest in data tracking systems that are appropriate for your organization. If there isn’t anyone with data evaluation skills and experience on your staff, don’t try to DIY. Instead, bring in an experienced consultant who can create your evaluation plan and conduct a data and technology audit. 

Access to Capital

As nearly everyone in a nonprofit organization can attest to, funding is the third crucial component to nonprofit success. The biggest challenge is getting attention from and access to major donors and institutional funders. 

Having board members, advisory council members, or other stakeholders who can connect your organization to major funders may even be more helpful than having those deep-pocketed supporters actually in your organization. But it’s not enough to just have someone who works at XYZ Corp on your board -- The kind of influence and connection they have is more important. 

What can funders do? Connect your grantees with other funders. Provide meaningful connections and warm introductions, not just quick emails.   

What can nonprofits do? Invest in the things that build your organization’s capacity and attract major funders, such as those mentioned in Teamwork and Metrics above. Identify not just the big donors but the connectors in your community. Bring them into your organization and ask them directly to make meaningful connections and warm introductions for you. Ask community connectors to host or be honorary hosts of private parties and organizational events, and give clear instructions for their tasks and goals. Dedicate time to strategic fundraising planning.

The Bottom Line

These three keys — teamwork, metrics, and access to capital — create a support base for a successful nonprofit, with each component supporting the other. For nonprofit leaders and funders, the message is clear. We cannot fall prey to the overhead myth and focus exclusively on programs. We must invest in people and systems in order to have a successful organization, and therefore, to make the difference we are hoping to make. As Janus and Threlfall note, “Indeed, it is only by supporting nonprofit organizations to become sustainable that we can maximize their potential to solve the urgent social problems we face.”

If your organization needs help with any (or all!) of these 3 keys, give us a shout. We can help with organizational assessments, strategic planning, grant writing, and more.

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