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- Herausgeber: John Wiley & Sons
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A hands-on toolkit for ambitious nonprofit leaders seeking to grow their organization's impact In Scaling Altruism: A Proven Pathway for Accelerating Nonprofit Growth and Impact, veteran social impact advisor and entrepreneur Donald Summers delivers a comprehensive, step-by-step blueprint to transforming small or mid-size nonprofit into an impactful and extraordinary agent of change. The book contains templates, tools, exercises, and crystal-clear implementation guides that readers can apply immediately to begin scaling their social impact organization. Offering actionable insights that have enabled many of today's most exciting social change efforts, the author provides practical guidance on how to turn your nonprofit into a social-problem-solving machine. You'll also find: * Specific strategies to improve cash flow and funding to your nonprofit, including revenue tools and staff integration * An Investment and Partnership Scorecard, detailing the health of your fundraising efforts * Leadership best practices for dealing with disruptive people at a nonprofit An invaluable resource for managers and directors at small- to medium-sized nonprofits, Scaling Altruism is also perfect for funders and graduate students aspiring to work in the nonprofit space.
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Veröffentlichungsjahr: 2024
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Table of Contents
Cover
Table of Contents
Title Page
Copyright
Dedication
Preface
Acknowledgments
Introduction
Success Stories
Whom This Book Is For
How to Use This Book
Notes
CHAPTER 1: Assess
Assess Practice 1.1: Benchmark against Robust Performance Standards
What to Do about All the Gaps
Additional Resources
Notes
CHAPTER 2: Align
Align Practice 2.1: Establish a Growth Mindset
Align Practice 2.2: Choose Powerful Language
Align Practice 2.3: Create Compelling, Actionable Mission and Vision Statements
Align Practice 2.4: Define the Organization's Value Proposition
Align Practice 2.5: Pick a BHAG
Align Practice 2.6: Define Impact and Growth Strategy
Align Practice 2.7: Draft Year 1 Initiatives
Align Practice 2.8: Create Key Performance Indicators
Align Practice 2.9: Create a Planning Framework
Additional Resources
Notes
CHAPTER 3: Plan
Plan Practice 3.1: Follow Good Process
Plan Practice 3.2: Develop a Clear Problem Statement
Plan Practice 3.3: Describe the Solution
Plan Practice 3.4: Refine the Value Proposition
Plan Practice 3.5: Explain Who Is on the Team
Plan Practice 3.6: Refine the BHAG
Plan Practice 3.7: Describe Your Market
Plan Practice 3.8: Refine Impact and Growth Strategies
Plan Practice 3.9: Define Growth Milestones
Plan Practice 3.10: Identify Key Performance Indicators
Plan Practice 3.11: Offer a Concise Marketing Plan
Plan Practice 3.12: Define Contributed, Earned, and Invested Income
Plan Practice 3.13: Identify Risk and Describe Mitigation
Plan Practice 3.14: Create an Organization Chart Projection
Plan Practice 3.15: Build a Detailed Financial Projection
Additional Resources
Notes
CHAPTER 4: Test
Test Practice 4.1: Map Key Constituents
Test Practice 4.2: Ask for Advice
Test Practice 4.3: Capture High‐Quality Feedback
Test Practice 4.4: Pitch Deck
Additional Resources
Note
CHAPTER 5: Fund
Fund Practice 5.1: Integrate Revenue Tools and Staff
Fund Practice 5.2: Develop Effective, Scalable Revenue Strategy
Fund Practice 5.3: Develop an Investment and Partnership Plan
Fund Practice 5.4: Drive Performance Improvement with an Investment and Partnership Scorecard
Read the Investment and Partnership Scorecard
Additional Resources
Notes
CHAPTER 6: Execute
Execute Practice 6.1: Inform Strategy with an Executive Dashboard
Execute Practice 6.2: Nurture a Culture of Performance and Trust
Execute Practice 6.3: Analyze Three Levels of Performance
Execute Practice 6.4: Identify Mission‐Critical KPIs
Execute Practice 6.5: Create a Dashboard Plan
Execute Practice 6.6: Align the Board with the Dashboard
Execute Practice 6.7: Build the Visualizations
Execute Practice 6.8: Establish a Cadence of Analysis
Execute Practice 6.9: Improve the Data Collection Process and Infrastructure
Execute Practice 6.10: Evolve and Improve
Additional Resources
Notes
CHAPTER 7: Lead
Lead Practice 7.1: Establish and Maintain Psychological Safety
Lead Practice 7.2: Practice Intentional Change Management
Lead Practice 7.3: Identify and Manage Disruptive People
Lead Practice 7.5: Ensure Balanced Thinking Styles
Lead Practice 7.6: Invest in Great People
Lead Practice 7.7: Ensure Clear Succession Planning
Additional Resources
Notes
Conclusion
Glossary
About the Author
Index
End User License Agreement
List of Illustrations
Introduction
FIGURE I.1 Nonprofit Sector Resource Distribution.
Chapter 2
FIGURE 2.1 Stuck Versus Growth Mindset.
FIGURE 2.2 Charity Versus SIE Frameworks.
FIGURE 2.3 Planning Framework Template.
FIGURE 2.4 Treehouse's Planning Framework.
Chapter 3
FIGURE 3.1 Sample Features Comparison Format.
FIGURE 3.2 Sample Organization Chart.
FIGURE 3.3 Sample High‐Level Financial Projection.
FIGURE 3.4 Sample “Goldilocks” Financial Projection.
FIGURE 3.5 Business Plan Template.
Chapter 4
FIGURE 4.1 Constituent Mapping Model.
Chapter 5
FIGURE 5.1 The Individual Domain from the Investment and Partnership (I&P) P...
FIGURE 5.2 The Cycle of Social Investment.
FIGURE 5.3 Sample Prospect Output from Database.
FIGURE 5.4 Sample Investment and Partnership Scorecard.
FIGURE 5.5 Sample Organizational Contact Potential.
FIGURE 5.6 Typical Number of Contacts to Close an Investment.
Chapter 6
FIGURE 6.1 Sample Dashboard Visualization.
FIGURE 6.2 Treehouse Dashboard Plan.
FIGURE 6.3 Treehouse's Early Dashboard.
FIGURE 6.4 Treehouse's Second Dashboard.
Chapter 7
FIGURE 7.1 Spectrum of Reactions to Bad News.
FIGURE 7.2 Kotter's Eight‐Step Change Framework.
FIGURE 7.3 Organizational Roles and Responsibilities.
FIGURE 7.4 Organizational Decision Types and Speeds.
FIGURE 7.5 Categories of Thinking Styles.
FIGURE 7.6 Leadership Typology.
Guide
Cover Page
Title Page
Copyright
Dedication
Preface
Acknowledgments
Table of Contents
Begin Reading
Conclusion
Glossary
About the Author
Index
Wiley End User License Agreement
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SCALING ALTRUISM
A PROVEN PATHWAY FOR ACCELERATING NONPROFIT GROWTH AND IMPACT
DONALD SUMMERS
Copyright © 2024 by John Wiley & Sons, Inc. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Preface
I grew up very suspicious of businesses. Like so many nonprofit types I would come to admire and support later in life, I abhorred what the big, bad companies were doing to people and the planet, and I spent my time immersed in literature and art. After brief stints as a teacher, I landed in an educational leadership program at graduate school that required classes in management and accounting. I walked into them dreading the content, but after the first class I was smitten. It was fascinating stuff. This is how the world works, I thought: What if we could use these tools for good?
On graduation, I was able to marry my newfound love for business practice with my altruistic impulses in my next job as a nonprofit fundraiser. Thanks to the power of the business methodology I learned, within three years of graduation, I designed and executed two multimillion‐dollar nonprofit fundraising efforts, one at an independent school and another at a large residential community serving adults with cognitive impairments. Another five years overseeing yet another multimillion‐dollar fundraising acceleration for the language and literature division at a large research university cemented my belief in the power of business tools for social good. My doctoral research around social sector entrepreneurship indicated how few nonprofits took advantage of the power of basic business tools: financial projections, key performance indicators, and dashboards—the same instruments used to catalyze my success in raising money and accomplishing goals.
It was like discovering a new world of opportunity. But I was simultaneously suspicious and incredulous. Surely I couldn't be the first person to realize the full power of marrying business processes with altruism. Yet there it was: a great gap in the literature.
After almost 10 years of fundraising, I sought new challenges and landed a gig as a CEO of a small charitable foundation, working for a board full of scientists who had all retired wealthy when their companies were acquired. They set up an environmental philanthropy to take an “innovative, systems approach” to environmental challenges. It started out great. After years of hustling for the charitable dollar, I finally landed on the money side. I thought I would be in philanthropy forever.
I lasted about six months. It quickly became clear that the nonprofit grant seekers needed a lot more help than the small sums we were doling out could provide. The grant applications described nonprofit programs with exciting, world‐changing potential, but the applications often lacked clear goals, sound strategy, clear performance indicators, and a means of sustainable financing. If their missions were summiting mountains, they proposed some courageous and promising new routes up difficult peaks, but their equipment list wasn't much longer than shorts and sandals.
It struck me: This is a waste of time. These are good people with great ideas who need a lot more than little sums of money doled out after endless hours of grant selection meetings. They need deep guidance on how to structure and scale their programs, many of which appear to have real potential.
I excitedly pitched my board about how we could use the business tool kit I had been using successfully for years, the same one that had made them all wealthy. To my surprise and disappointment, they were uninterested. As I would later realize, they weren't in it for the impact, despite all the talk of “systems change.” It was all just theater. They had made a great deal of money and were following a well‐traveled path of setting up a foundation because they needed something to do. They also clearly enjoyed the image and prestige of philanthropy and, frankly, the power trip of deciding who gets money. I wanted to dig in deep with each grantee, unpack the underlying business and organizational constraints, help them fill in the blanks on their program and financial modeling, and then go raise capital. Asking this board to engage in that level of work was like asking retirees on a cruise ship to crack open their accounting ledgers. Interacting with other philanthropies and attending philanthropic conferences, I saw more of the same: the appearance of investing in social impact but little substance—and only a fraction of the necessary capital.
Philanthropy as practiced like this was clearly not for me, so I left and pitched my services as a consultant to two of the grantees. They paid me a couple grand a month to write their business plans and guide them through funding and execution. Just like I had done with my previous organizations, I catalyzed multimillion‐dollar growth and delivered social impact that improved the lives of many people around the world, but now I was doing it for more than one organization at a time.
Success was intoxicating. I worked hard on developing the methodology with moderate levels of success. And then I had the Treehouse engagement, where we landed a moonshot in the world of social services, creating a level of social and financial acceleration that few thought possible. It was yet another confirmation that I was on to something truly important: the secret to unlocking the untapped potential of the entire social sector.
It made me overconfident. I was not dissimilar to insufferable tech founders who sold their first start‐up to Google and thought they could do no wrong. Fortunately, my hubris didn't last. I got ejected from client engagements like a virus because I didn't listen enough or spend enough time aligning decision makers. I also chose clients without being careful about first making sure they possessed growth mindsets and risk tolerance.
For about five years, I produced decent results and even some very strong outcomes, but I also kept failing for reasons that were only clear in hindsight. I would paddle along in my little methodological rowboat, smash into a hidden rock, and sink right to the bottom. Finally, after multiple sinkings and hole‐patchings, my arrogance gave way to humility. And the humility made me a much better consultant, better able to empathize with my clients. Failure motivated me to improve the process further. It took years of trial and error, the help of supportive colleagues, and the input of hundreds of nonprofit executives and board members, but I eventually landed on a comprehensive, step‐by‐step process that consistently accelerated nonprofit growth and impact.
Today, I have calluses on my butt from all the swift kicks I've earned. When I observe in the pages that follow that getting things right takes time and lots of perseverance, I speak from experience. The Japanese call this continuous pursuit of improvement kaizen. (I don't have any tattoos, but were I to get one, I'd get a kaizen tattoo.)
The boutique consulting firm I founded to deliver this methodology, Altruist Partners, works today with a small set of ambitious clients around the United States and internationally. We have also set up a nonprofit arm, the Altruist Nonprofit Accelerator, to teach the methodology to cohorts of nonprofits, and this book serves as the backbone of the curriculum. Early deployments in nonprofits around the world are encouraging.
In the spirit of kaizen, the methodology presented in this book isn't perfect. It was improved by the review of so many wise and generous experts, and I am confident I will get much more constructive feedback now that it is all in book form. I will be very happy if this book attracts critique and advice from those who don't agree or have better ideas.
Delivering an effective management system that enables widespread improvements across the nonprofit sector is my dream. If this work represents only marginal progress or serves to support superior efforts elsewhere, I will still die happy. Therefore, please forgive gaps or mistakes. Write to me at [email protected] with your ideas. I'll do my best to read and respond to everyone.
And before we begin: While this book may offer any number of blunt critiques about the current state of nonprofit performance, I am truly grateful to live in a world with so many fellow altruists. Thank you for all the good work you currently do to help make the world a better place.
Acknowledgments
For three decades I've had the privilege of working alongside smart, generous, and talented people: nonprofit professionals, directors, executives, volunteers, funders, government and corporate partners, and advisors, academics, and advocates of every stripe. Their wisdom fueled this book, and their work to make the world a better place continues to inspire and motivate me.
To the dozens of social impact leaders who provided their feedback on early drafts, thank you. Particular thanks go to Janis Avery, the incredible founder and now retired CEO of Treehouse, for her courage, skill, and partnership and for her generosity in allowing me to share the story of our work together; to Akhtar Badshah, for his guidance and support; to my colleagues at Altruist Partners, especially Ian Hanna, who helped develop and refine this methodology; to BrightRay Publishing, who helped me produce my first draft; to my publication team at Wiley, including Brian Neill and Deborah Schindlar, who have supported the book's final maturation and development; and to my editor, Angela Morrison, whose sensibility, judgment, and advice have improved this text immensely.
Introduction
Every man must decide whether he will walk in the light of creative altruism or in the darkness of destructive selfishness.
—Martin Luther King, Jr.
In 2013, Ken Stern, the former CEO of National Public Radio, wrote With Charity for All,1 an exhaustively researched, evidence‐filled, and incredibly shocking account of how the nonprofit sector is pervasively dysfunctional and filled with organizations that routinely fail to deliver on promises. Whether one agrees with Stern or not, it is clear that the nonprofit sector has at least an image problem: according to the Better Business Bureau, only one in five Americans trust charities to use their donations well.2 This mistrust may be a driver behind a collapse in charitable donations from small donors, individuals who make up 98% of all nonprofit supporters. In 2021, fewer than half of American households gave to charity, down from two‐thirds only a decade ago.3
Like the rest of society, the charitable organization landscape in the United States and elsewhere is a story of haves and have‐nots. While giving collapses among the middle class, wealthy donors and foundations continue to donate record levels to universities, hospitals, and other large nonprofits, a class of organizations that share the same tax status as their smaller brethren but are run with the sophistication of major corporations. Approximately 95% of the nonprofit sector is composed of small organizations with average budgets of about $500,000. The remaining 5%, or about 35,000 total, are often large and complex organizations that have far more in common with Microsoft than a neighborhood soup kitchen. Many operate on a global scale and are our most significant engines for social good. For example, American nonprofit universities, both public and private, consistently lead the world in educational rankings. While US higher education's success is by no means assured, they are, comparatively speaking, mostly well‐managed organizations that deliver beneficial products and services at scale.
For example, the University of Washington in Seattle raises approximately $2 million in private gifts and grants every day of the year. It earns billions more in contracts with corporations and the federal government. Pay and benefits are excellent, the facilities are world‐class, and the university churns out more patents than almost every other research university in the world. Steve Olswang, the university's former vice provost, explains: “Make no mistake. The University of Washington is a business. We are in the business of education and discovery.”
On the other end of the spectrum is the 95% of nonprofits, over 1 million organizations in total, that survive on budgets under $5 million a year, with the average budget holding steady at just under $500,000.4 These include homeless service agencies, community clinics, tutoring programs, arts and theater groups, animal shelters, conservation organizations, human rights advocacy groups, environmental sustainability advocates, and tens of thousands of other types that form so much of our social fabric. Most are financially threadbare, chasing grants, begging for dollars, and existing in or near the zone of insolvency.5 Few can meet more than a small fraction of the demand.
Figure I.1 illustrates that large nonprofits such as hospitals and universities, while few in number, command over 85% of the resources in the nonprofit sector.
FIGURE I.1 Nonprofit Sector Resource Distribution.6
There is relatively little examination of why so many nonprofits remain so small. William Foster and Gail Fine's article in the Stanford Social Innovation Review, “How Nonprofits Get Really Big,”7 provides one explanation, citing a complex financial landscape where few nonprofits have figured out how to grow their revenue. The authors target what they see as the major challenge: sustainable, scalable revenue. Leslie Crutchfield and Heather McLeod Grant's Forces for Good8 examines a set of high‐growth nonprofits and attempts to distill from them a set of effective organizational scaling strategies. While an important set of strategies emerges, the book leaves it to executives to figure out how to formulate, finance, and execute them.
For‐profit business executives wishing to expand their organizations and generate more profit enjoy access to a massive education, support, and funding ecosystem. Around the world there are hundreds of MBA programs, incubators, and accelerators; scores of mentoring programs and entrepreneurial support and coaching organizations; an extensive literature filled with well‐established guidance; a large, expert service industry of consultants and business solutions providers; and an enormous and sophisticated capital marketplace filled with banks and investors of every stripe.
By contrast, nonprofit executives seeking to expand their organizations to deliver greater levels of social impact face a much more austere landscape, one with significant gaps in entrepreneurial, management, and financial training; a comparatively sparse and incomplete literature; relatively thin supporting organizational and professional service resources; and a fractured funding marketplace with a complex, confusing variety of gifts, grants, contracts, and loans sourced from millions of individuals, tens of thousands of corporations and foundations, and hundreds of local, state, and federal agencies.
While running any type of organization is difficult, life as a nonprofit executive is therefore particularly hard, and there is little debate that, for all but the largest, most wealthy nonprofits such as hospitals and universities, social impact suffers as a result. Staff are underpaid and overworked; technology is often underutilized; and underinvestment in program measurement, evaluation, and improvement is common. For example, the National Council of Nonprofits reports that 40% of nonprofits surveyed in 2023 responded that they have a quarter to a third of their staff positions currently unfilled, with most citing low salary as the barrier. Nearly 50% have a service waiting list more than a month long.9
When noted management expert Michael Porter observed, “Philanthropy is decades behind business in applying rigorous thinking to the use of money,”10 he identified one part of a much bigger truth: the nonprofit sector is decades behind the for‐profit sector in the rigorous use of organizational growth methodology. There remains a significant gap in the literature for current and future nonprofit leaders around how to lead a small to midsized nonprofit to continuous annual growth and impact.
This book is aimed at this gap. It presents a comprehensive nonprofit management system, the Altruist Impact and Growth Methodology, proven to catalyze significant acceleration in organizational revenue, performance, and impact for nonprofits under $50 million in annual revenue, or over 95% of nonprofits operating today.11 It is based on two decades of continuous development, a comprehensive review of the for‐ and nonprofit management literature, and thousands of hours of partnership with hundreds of nonprofit executives and board members in diverse fields. It attempts to provide a comprehensive acceleration platform in a step‐by‐step sequence for accelerating organizational impact and growth, one that organizations can follow independently and at their own pace. It is aimed at the following audiences: nonprofit executives and board members, public and private funders, and graduate students.
Nonprofit executives and board members
find a practice guide with tools, templates, and implementation guidance to catalyze sustained annual growth in organizational revenue and social impact.
Public and private funders
discover new insights for assessing nonprofit performance and supporting scalable social impact efforts.
Graduate students
learn effective social change leadership practices not found in graduate programs.
There are seven phases to this methodology. Each chapter focuses on a particular phase, breaking it down into a series of organizational development steps called practices. In total there are about fifty practices across all seven phases. After the purpose and benefit of each practice is explored, implementation steps follow, supplemented with exercises, templates, case studies, anecdotes, metrics, protocols, and talking points to help changemakers embed the practices into their day‐to‐day operations. Technical terms are italicized on first use, explained in context, and defined in the glossary.
In addition, a supplementary tool kit of templates, examples, and additional resources is available on this book's companion website, www.altruistaccelerator.org. Users will find electronic versions of all the tools and templates provided here such as business plan templates, organizational charts, financial projection, and scorecard models. There is also a selection of real‐world examples we have developed with our clients, ones they have used to successfully grow their revenue and impact.
If applied with fidelity and discipline, the methodology promises to catalyze accelerated organizational performance and resolve barriers keeping smaller nonprofits understaffed, underpaid, and trapped in survival mode. However, implementation is difficult. Nothing about growing any type of organization is easy, as any entrepreneur will attest. The journey requires courage, optimism, grit, discipline, urgency, and focus.
The gravity and magnitude of today's social challenges create enormous opportunities for nonprofits to harness the power of entrepreneurial growth practices so they can solve social problems, not just tinker at the margins. Success creates profound advances in social, economic, human, and ecosystem benefits, as the success stories below indicate.
Success Stories
In over one hundred deployments with nonprofits of all types, the methodology outlined in this book has catalyzed a sustained median annual impact and revenue growth rate of 25%. Examples of the methodology's track record with a diverse set of organizations include the following:
A human services organization set a goal to double high school graduation rates for foster children in a major metropolitan area. It tried for two years but didn't move the needle on graduation rates. Then it applied this system and, over the next five years, tripled its annual revenue, increased the numbers of foster youth it served from hundreds to thousands, and doubled foster youth graduation rates, increasing them from a baseline of 40% to 80% for the entire population in a major metropolitan area. The organization's program model is now being followed by educational support programs and government agencies nationally.
An educational philanthropy delivering financial support for low‐income public school students wanted to break through annual service levels that were flat year over year. After deploying this system, student service levels accelerated from 25,000 to over 350,000. The organization is today on track to providing educational needs such as calculators, student activity cards, extracurricular supplies, glasses, and other assistance for every low‐income student in the state.
A global reforestation organization grew its annual budget from $19 million to over $40 million and achieved a 10x program acceleration to reach the milestone of 1 billion trees planted, creating the world's largest and most efficient ecosystem rehabilitation program and establishing a model for hundreds of similar efforts.
In 18 months, a three‐person, $250,000 environmental advocacy organization running a small corporate responsibility pledge transformed into a $1.5 million, 20‐person operation that delivered a global ISO 14001 certification in partnership with hundreds of companies such as Samsung, LG, Bloomberg, and Capital One. The certification catalyzed sweeping changes in a global $20 billion recycling industry and significant reductions in hazardous waste dumping around the world. Public awareness milestones included an award‐winning
60 Minutes
episode viewed by over 30 million and front‐page articles on major media outlets worldwide.
A social services agency providing food, shelter, clothing, and educational support for low‐income families had been a pillar of its community for over a century, but it continuously struggled to make its annual budget and served only a fraction of its potential service audience. By year 2 of deploying the impact and growth methodology, the organization had doubled its budget and service audience and tripled them by year 3. It is now co‐locating its programs in the region's public schools and is on track to serve every vulnerable child and family in its service area.
An educational start‐up launched a clinical training program to teach doctors how to talk to families about terminal illness, growing the work from an NIH‐funded grant project into a multimillion‐dollar organization reaching tens of thousands of clinicians nationwide.
A social services start‐up enabled individuals to make direct charitable gifts to early‐stage, scalable agricultural innovations in developing countries through a rigorous process borrowed from finance.
The nation's oldest PBS affiliate pivoted from consistent 5% annual losses in membership to a 10% increase and a concomitant 20% increase in charitable gift revenue in the first year of deployment. A similarly positioned NPR station increased its previously static advertising revenue 30%, improved charitable gift receipts 20%, and secured the first million‐dollar charitable gift in the organization's history.
A global NGO operating on multiple continents within a complex membership network of governments, major corporations, other industry bodies, and peer NGOs currently is executing the first planning and execution cycle and has already reversed a years‐long decline in membership numbers, generating their first $1.5 million in unrestricted funding.
These examples, all from the past 15 years, follow the example created by a small number of exceptionally high‐growth, high‐performing nonprofit start‐ups from the 1980s and 1990s that achieved national scale. Well‐known examples include Teach for America (teachforamerica.org), City Year (cityyear.org), and KIPP (kipp.org). Another less well known example is EducationSuperHighway (educationsuperhighway.org), founded in 2012, which has successfully closed the digital divide for millions of low‐income households. An early‐stage organization that appears poised to achieve similar levels of success is Housing Connector (housingconnector.com), a start‐up founded in 2019 in Seattle. They use logistics and technology expertise to house thousands of homeless individuals at an efficiency and effectiveness that leads the social sector, all after only a few years of operation. Asked to explain why he is so successful when so many organizations in the homelessness space struggle to deliver more than marginal impact, founder and CEO Shkëlqim Kelmendi says, “We are strong at execution.”12
What does that mean, to be strong at execution? While the vast majority of small to midsize nonprofits struggle for survival and deliver marginal levels of impact, what explains the breakout success of these positive outliers? A small set of funders recognize that these success stories share a common playbook that can be installed in other organizations. While practiced by a diverse array of organizations and funders, the set of organizational acceleration principles and practices behind all of these success stories is remarkably similar. As the opening line of Anna Karenina states, “All happy families are alike. All unhappy families are unhappy in their own way.” The methodology of this book attempts to document our success playbook and provide a step‐by‐step process any nonprofit can execute.
Whom This Book Is For
As their organizations struggle to perform, some nonprofit leaders adopt a defensive posture that asserts outsiders are illegitimate critics: “We are a unique organizational type with unique challenges. People who tell us we need to run like a business have no idea.” This is the myth of uniqueness, an assertion that a nonprofit is a fundamentally different type of organization, a mysterious animal that outsiders, especially business types, cannot appreciate or understand. Normal organizational practices don't apply; business planning is impossible because the nonprofit is subject to forces beyond its control; clear outcome measures are impossible because social impact is too hard to measure; growth is impossible because nonprofits have no control over external funding from foundations, government agencies, and capricious rich people. This myth is used as a smokescreen to confuse business‐minded board members and deflect funders seeking transparency and accountability.
This book is written for nonprofit executives, board members, and social impact leaders who believe that success and scale for nonprofits are possible and that the myth of uniqueness is just that—a myth.
While additional attitudes and mindsets are detailed in Chapter 2, “Align,” we've found the following six characteristics of leaders that are fundamental to the pursuit and application of the practices outlined in this book:
Courage:
They are unafraid of change and take measured risks, understanding that failure is an ingredient of success and that there is more merit in setting a scary goal and failing than never stepping outside comfort zones.
Optimism:
They believe in their work and have or are working to get evidence that they have a best‐of‐field solution that can solve a major problem.
Grit:
They understand that growth and performance are hard. They expect to fail repeatedly and demonstrate resilience when they do.
Urgency:
Talk is not a deliverable. Meetings are short. They are biased toward action and experiment, not analysis and reflection. There are no social impact tourists on the board or staff.
Discipline:
They plan the work and then work the plan. They are analytical and base decisions on data. They don't chase shiny objects and invent a program to fit a grant opportunity.
Focus:
They pick a goal, define strategies, and then stay focused on the small handful of metrics that measure the execution of the strategy. They don't create new programs on a whim. They don't boil the ocean. They are trying to solve one specific, hard problem.
Successful entrepreneurs are far from the brilliant know‐it‐alls portrayed in popular media. They are most often remarkably humble and have achieved success from tenacity and continuous learning and improving. Jim Collins describes these successful entrepreneurs as Level 5 leaders:
Level 5 leaders display a powerful mixture of personal humility and indomitable will. They're incredibly ambitious, but their ambition is first and foremost for the cause, for the organization and its purpose, not themselves. While Level 5 leaders can come in many personality packages, they are often self‐effacing, quiet, reserved, and even shy.13
CEOs must not be the only ones with these attitudes. They can only succeed with close partnership and support from boards; a high‐performing executive team; and well‐curated, compensated, and supported staff and volunteers.
How to Use This Book
Fifth graders learn about PEMDAS, which is the order of operations for completing a math equation. Do the work in parentheses first, then exponents, then multiplication and division, and finally addition and subtraction. Accurate calculation alone isn't enough. Do correct calculations in the wrong order and you get the wrong answer.
Apply the tools in this book out of sequence and you dramatically reduce the odds of success. We've realized over decades of practice that accelerating social impact demands that an order of operations be carefully followed. Untold tens of thousands of nonprofit leaders are mired in a game of whac‐a‐mole, all because they aren't aware of the correct order of operations. They hire fundraising experts but don't realize that their fundraising will struggle to gain traction until they can show funders their strategy is informed by evidence. Huge sums and many hours are spent building teams, only to have efforts eroded by turnover because of low pay. So many efforts spent on board development and activation are wasted because of information overload, poor recruitment practices, and weak job descriptions. Pick a typical nonprofit and there is usually any number of critical enabling factors that aren't recognized as foundational.
The practices presented in this book are therefore clearly sequenced. The success of each depends on organization‐wide embrace of the one before it. While adopting each practice will yield benefits even if pursued by themselves, maximum increases in organizational performance and acceleration demand that all get executed in sequence, a process that we've found takes between 6 and 18 months, depending on organizational size and complexity.
In addition to the sequence, there is the underlying robustness of this methodology. It demands a level of commitment and determination not dissimilar to what is required to successfully complete a diet and exercise program. Following the practices in this book will likely require significant behavioral change for everyone in an organization. This will need a champion, or even better, a team of champions (ideally the board of directors) to evangelize these practices and then hold themselves and everyone else accountable to ensure they are adopted and followed. So prepare for change and hard work. The likelihood of accelerated impact and growth is maximized if leaders adopt the practices in the sequence provided here and refuse to quit.
One final note before we launch into the methodology: there are about two dozen templates illustrated throughout the book, for business plans, scorecards, database protocols, and the like. Since these would be difficult and time consuming to reproduce from scratch, we offer downloadable versions on the book's companion website (www.altruistaccelerator.org), along with helpful other resources and real‐world examples of business plans, fundraising strategy, scorecards, and more. Each chapter ends with a list of these resources.
Notes
1
Ken Stern,
With Charity for All: Why Charities Are Failing and a Better Way to Give
(New York: Doubleday, 2013).
2
“
Give.org
Donor Trust Report 2022: Five‐Year Review of Trust and Giving Attitudes,”
Give.org
, BBB Wise Giving Alliance,
https://www.give.org/docs/default-source/donor-trust-library/donor_trust_report_2022_five_year_review.pdf
.
3
“Fundraising and the Generosity Crisis,”
The Chronicle of Philanthropy
,
https://www.philanthropy.com/package/fundraising-and-the-generosity-crisis
.
4
Urban Institute, “Nonprofit Sector in Brief,” 2019,
https://nccs.urban.org/publication/nonprofit-sector-brief-2019#size
.
5
See Ron Mattocks,
The Zone of Insolvency: How Nonprofits Avoid Hidden Liabilities and Build Financial Strength
(New York: John Wiley & Sons, 2008).
6
Urban Institute, National Center for Charitable Statistics, Core Files (Public Charities, 2016).
7
William Foster and Gail Fine, “How Nonprofits Get Really Big,”
Stanford Social Innovation Review
,
https://ssir.org/articles/entry/how_nonprofits_get_really_big
.
8
Leslie R. Crutchfield and Heather McLeod Grant,
Forces for Good: The Six Practices of High‐Impact Nonprofits
(New York: John Wiley & Sons, 2007).
9
National Council of Nonprofits, “Nonprofit Workforce Shortages: A Crisis That Affects Everyone,” 2023,
https://www.councilofnonprofits.org/reports/nonprofit-workforce-shortages-crisis-affects-everyone
.
10
“The Business of Giving,” Special Report,
The Economist
, February 2, 2006,
https://www.economist.com/special-report/2006/02/25/the-business-of-giving
.
11
“The Nonprofit Sector in Brief,” Urban Institute, 2019,
https://nccs.urban.org/publication/nonprofit-sector-brief-2019#size
.
12
Personal interview, September 12, 2022.
13
Jim Collins, “Level 5 Leadership,”
https://www.jimcollins.com/concepts/level-five-leadership.html
.
CHAPTER 1Assess
You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.
—Jim Collins, “The Stockdale Paradox,” from Good to Great
LEARNING OBJECTIVES
By the end of this chapter, you will be able to:
Understand the value performance benchmarking can bring to your organization;
Identify the organizational assets and capabilities essential for driving organizational growth and impact; and
Apply performance benchmarks to your organization to establish a shared understanding among board members and executives around organizational strengths and opportunities for development.
Experienced leaders understand that, before beginning any organizational change effort, there should be a shared understanding of what needs changing—and what doesn't. Therefore, they commonly engage in performance benchmarking exercises, such as SWOT analysis. First developed in the 1960s, traditional SWOT analysis (strengths, weaknesses, opportunities, and threats)1 is a simple, self‐explanatory model that examines where the organization is and is not functioning well, what the growth potential is, and what risks might be encountered. While it is probably better than jumping into planning without any preparation at all, as practiced in the nonprofit sector, we have found that it and other nonprofit benchmarking exercises tend to result in long documents filled with abstract findings, leaving leaders in doubt about what planning should address. So we built our own nonprofit performance benchmarking model to provide leaders with a punch list of what is working and what needs development. After hundreds of deployments and thousands of incremental improvements, we landed on a set of critical success factors that appear to be the most influential when it comes to scaling up organizational impact.
Let's linger on the word scale for a moment. It is the crux of this entire book. I can go out in my backyard and plant a tree and make a marginal contribution to the climate crisis. But we need to reforest about 10,000 hectares (24,700 acres) a day for an entire decade to recover the forests lost since the industrial revolution. The point is this: marginal impact is relatively easy. Scaling up that impact is very difficult—but urgently needed.
Therefore, to guide discussion among boards and executive teams on the most critical issues to organizational growth, essential must‐haves for delivering increasing levels of impact year after year, consult the list below, consider the key questions, and discuss them openly among board members and staff. After this performance benchmarking chapter, subsequent chapters offer a step‐by‐step planning and execution model that will help leaders leverage strengths and fill identified gaps.
Before delivering our assessment framework, examine the first of many short Treehouse Case Studies presented throughout this book to land the practices within a specific organizational context. Treehouse's performance assessment was informed by many of the same benchmarks outlined in this chapter.
Case Study: Treehouse's Performance Assessment
In 2012, Treehouse was already one of Seattle's most admired human service agencies. For most of its 25‐year history, it provided clothing, resources, and educational support for children and youth in foster care to help them succeed in school. After more than two decades of hard work, leadership realized that providing material assistance did little to change what remained troubling educational outcomes for the population, with only 40% of youth in foster care graduating from high school, less than half the rate of their peers. Treehouse's CEO, Janis Avery, was eager to shift from doing good to moving the needle. “No more congratulating ourselves for trying. We have to do better. Their lives depend on it.”
