The Unique Challenges in Leading a Nonprofit
As I work with directors, staff and volunteers of nonprofit organizations, I often encounter talented, skilled people who are passionate about, and deeply committed to their cause. But they’re frustrated because they sense the organization is spinning its wheels. They’re busy with lots of organizational activity but not really making significant progress toward some agreed upon target or goal. Many of these individuals have a deep seated realization that their skills and abilities are not being fully utilized limiting their benefit to the organization. And yet driven by their passion they continue to faithfully plod along, staying true to the cause. Occasionally one of them will raise questions like, “Are we being as effective as we could be? Are there efficiencies we could realize by doing things differently? Do we really know what our long term strategy is? How do we measure success?” Most often the questioner is given patronizing affirmation - “that’s a good question” and things continue on as they always have. Perhaps you’re one of those people. You know the frustration. You know what could be. But you also know what is.
There are several common themes which emerge as I engage these individuals. I’ve rarely encountered a nonprofit organization flush with cash. Most are struggling to secure the necessary funding to finance the operation of the organization. Usually the cash flow crunch is acute and they’re living day to day. Since the need is often so critical, the tyranny of the urgent prevails. Most energy is directed to deciding which bill gets paid, which program gets scaled back, which staff member might have to be terminated, generating more cash from existing donors, and securing new donors. And in the process the collective energy is sapped like a magnet to keep the organization afloat.
I’ve been working with the board and staff of a nonprofit and the chairperson recently lamented that the most time-consuming agenda item at board meetings is funding to the exclusion of virtually everything else. It has an obsessive hold on them. Decisions are made based on the answer to the question, “Can we afford it?” He is a competent, well respected executive in a large, successful corporation and his frustration was palpable. He sees what could be, but he lives with the reality of what is.
Another common theme, although never as pronounced as funding, is the strategic direction of the organization. There is an underlying, unspoken assumption that everyone knows what the strategic direction is but rarely is the assumption put to the test. It’s not uncommon to have varying (and sometimes competing) understandings about the strategic direction which further serve to hamper the organizations effectiveness. Because the funding issue is always more pronounced, there isn’t the “time” to invest in the important process of addressing the longer term strategic direction.
The chairperson I referenced earlier, has begun to raise the possibility with fellow board members that the greatest issue facing them is really the issue of strategic direction. We’ve begun the process of talking about what it might look like for them to bring clarity and focus to this transformational aspect of organizational life. He’s confident that as they address the strategic direction, the funding issues will begin to take care of themselves.
Because the long term direction is unclear, the metrics for success are equally unclear. There is however, one metric that is always crystal clear and in focus - “Do we have money to pay the bills today?” The answer to that question is the measurement of “success.” Beyond that, there are no clear metrics that help the directors, staff, and volunteers evaluate their progress towards their “agreed upon” strategic destination. Because directors feel the pressure of addressing and monitoring the ongoing funding challenges, they’ve told me that they rarely feel as if they “have the time” during their board meetings to ask the question, “How are we doing as a board?” Annual General Meetings are rarely used as a platform for dreaming and direction setting. Instead they’re a review of the finances (which is important) and a discussion of the funding struggles of the organization. That’s not the kind of discussion that inspires passion or generates interest and confidence from potential donors or even committed, loyal stakeholders.
As I’ve worked with nonprofit organizations, I’ve encountered staff and volunteers who are frustrated and feel unmotivated, unfulfilled, and cast adrift as they seek to keep the organization afloat. Because there is no common over-arching strategic direction with clear, measurable success indicators, staff and volunteers often aren’t really sure how they’re doing. Are they performing up to standard? If they weren’t how would they know? Occasionally you find a staff member or a volunteer who is clearly not performing, but since there are no measurable success indicators, there is no process to conduct a fair and objective evaluation. What’s more, board members have no way of really knowing what’s going on in the day to day operations (beyond the financial reports they receive). And so the organizational challenges and struggles perpetuate themselves.
In working with one of our nonprofit clients, I asked an employee who is the administrative hub of the organization a couple of questions. “Who do you report to?” and, “On what basis are you evaluated?” A blank look came over her face and she said to me, “Those are good questions. I don’t know.” In our work with this client I have had opportunity to benefit from her administrative skills, abilities and collaborative approach. I was profoundly saddened because I knew there was so much more she could offer the organization if only there was a stronger framework in place. Unfortunately her story is not unique in the world of nonprofits.
A New Way Forward
Maybe you’re a board member, paid staff or volunteer in a nonprofit organization that has some of the dynamics I’ve just described. No, I haven’t read your mail, but I have worked with enough nonprofits to recognize the patterns. As a board member, you serve as a volunteer. You have a full-time career which occupies your precious time. You have a family and friendships that deserve your time and attention. And you’re wondering to yourself whether or not there’s a way forward, one that doesn’t simply replicate the past. You’re wondering whether it’s worth the investment of your precious time and energy. As paid staff or a volunteer, you know there’s so much more that could be done!
I’ve worked with nonprofits where board and staff members have had the courage to persist in asking the hard questions. They’ve paid the price to take a step back and look at the bigger picture. They’ve engaged the collective process of dreaming and direction setting. They’ve identified clear and measurable success indicators for the board, staff and the organization as a whole, and they’ve moved beyond the singular focus on funding to examine and evaluate all aspects of the organization’s operation and direction. They’ve developed clear guidelines for staff and volunteers with measurable success indicators. In the process they’ve charted a new way forward, one that inspires people, motivates donors, and expands the positive impact for the beneficiaries of the organization. It’s possible - I know it because I’ve seen it and I’ve been privileged to facilitate those kinds of processes. These organizations have been able to realize an imagined future they’d only dreamed about!
No matter which direction you choose to go, there’s a price to be paid. Simply repeating the past - doing what you’ve always done - has a cost attached to it. So does charting a new way forward. Which price are you willing to pay?