Corner Office: A Pathway to Efficiency and Impact
The economic, political and cultural climate faced by human-serving nonprofits continues to challenge efficiency amid shrinking resources, increased demand and higher expectations of demonstrating return on investment. And while there is an urgency to achieve efficiency, there is even more urgency to achieve impact―in that "sweet spot" where operational excellence and mission alignment converge.
Impact is not about what you do as an organization, how many people you serve, how long you've been in existence or how far your service area reaches. It's about the positive change you achieve and whether or not it lasts. Organizations that achieve impact are advocates for systemic and attitudinal changes that benefit individuals, families and communities.
Achieving optimal efficiency is a necessary foundation for achieving greater impact. Strategy and execution can no longer be sequential. They must be concurrent. But nonprofits cannot lead through the current volatile operating environment haphazardly.
The Alliance for Strong Families and Communities, America's largest network of human-serving organizations, helps nonprofits address challenges and recognize areas for efficiencies with its signature Commitments of High-Impact Nonprofit Organizations. The commitments are a comprehensive, evidence-based framework of values and practices that provide a pathway to organizational impact. The following 10 commitment areas help nonprofit organizations maximize their comprehensive capacities and meet community need:
- Leading with vision
- Governing for the future
- Executing on mission
- Partnering with purpose
- Investing in capacity
- Measuring that matters
- Co-creating with community
- Innovating with enterprise
- Engaging all voices
- Advancing equity
The commitments were identified through an extensive literature review, the Alliance's Strategy Counts initiative, member engagement/feedback and the Alliance's more than 100 years of experience working with the sector. To achieve organizational efficiencies, the commitments offer a deep and integrated system of resources for evaluation, learning and change.
Together, the commitment areas form a common culture and language for engagement. They help organizational departments attain a collective philosophy, knock down silos, promote collaborative work, and in turn, foster cohesion and efficiency.
Unlike an accreditation or certification process, the commitments can be used comprehensively or in a la carte segments to focus on an organization's specific needs. For efficiency, focus on these four areas:
Executing on Mission
Much like creating a common culture and language between departments, executing on mission helps organizations improve efficiency and impact via focus. By aligning all programs and services with your organization's mission, you save resources previously given to uncoordinated and ineffective programs. For the nonprofit sector, resources are shrinking and scrutiny of ROI is increasing, so organizations must move away from ambiguous missions and programs that do not deliver promised outcomes.
"We dropped government contracts that didn't fit our new mission, including a $14 million managed care contract," says Jim Mason, president and CEO of Beech Acres Parenting Center. "Our budget decreased dramatically, but we are serving four times the number of kids and families and are seeing improved outcomes."
Concentrate and invest in programs aligned with your mission, and choose new programs wisely. You must continually examine your organization's programs to assess their relevancy to the mission. Set parameters, and identify programs that are misaligned and phase them out. This helps nonprofits position themselves to draw a clear line from their missions to the individual contributions of each staff member and volunteer, which enables employees and volunteers to remain connected and invested to the cause. Research shows invested employees and volunteers are efficient employees and volunteers.
Partnering With Purpose
The causes of poverty and other social ills are complex. Organizations seeking to address those needs are often most effective if they partner with other organizations that contribute unique strengths. Together, they can piece together a broader network of solutions. Partnering with purpose helps nonprofits forge relationships, partnerships and affiliations that maximize their unique assets. It encourages organizations to build internal capacity via diverse partnership networks that span sectors and revolve around shared visions and values.
Think of your partnership network as a collaborative, evolving process that generates resources beyond dollars. Be sure to continuously assess your current partnerships. If there is a particular type of organization you partner with frequently, ask what other potential partners you should connect with. If there is a partnership that is not mutually beneficial, create a plan for improving or dissolving the relationship. Collaboration is essential to create enduring change and impact on a systemic level.
Investing in Capacity
Investing in capacity focuses nonprofits' funding on their major assets—people, programs and physical space—to gain efficiencies in financial planning across departments. Investing in these three assets makes your organization more sustainable and relevant to its community, partners and donors. By focusing on investing in capacity, you have the ability to use funds flexibly and withstand shifts in funding streams, like inconsistent government spending and donor contributions.
Double down on raising unrestricted revenue, and use it to continually improve the operating systems and programs that support high efficiency, such as recruitment, staff training, marketing and fund development, information technology systems, and high-quality physical spaces. Use your budget as a policy and strategy guide, so resources are allocated and redirected based on seizing future opportunities, not maintaining systems and strategies that worked in the past. This will improve efficiencies in your financial planning, from which you can reap cost savings and reinvest in your organization's mission.
Measuring That Matters
No organization can improve its efficiency without measuring its performance and establishing a baseline. Measuring that matters helps identify trouble areas, what's working, and where to best spend time and money. This commitment also creates a performance management culture across all levels of an organization, where each staff member and volunteer sees how his or her work contributes to the execution of the organization's mission through monitored data. Research shows that employees who believe their work is meaningful are more engaged, have a strong commitment to achieving improvement, and work harder and more efficiently.
Measuring that matters helps nonprofits define and communicate the difference they are making. Search for ways to maximize alignment and strategic uses for your metric tracking systems. Use data, stories and testimonials to educate funders, government agencies and the public on the impact of your work. When your organization and staff are driven by a commitment to demonstrate ROI and regard data collection as a means for continuous quality improvement, efficiency naturally grows.
Now more than ever, there is an urgency for efficiency and impact in the nonprofit world. You must use all of the tools at your disposal to achieve organizational excellence and create lasting change.