Nonprofit Leadership: Maximizing Impact

April 27, 2009

UPEACE Centre for Executive Education, Costa Rica

Empowering leaders to transform challenges into opportunities

Agenda for the morning

Introductions

Overview of nonprofit organizations

Strategic Planning
Mission Statements
Theory of Change
Intended Impact

Activity on gaining strategic clarity

The Learning Pyramid

Av. retention
rate after 24 hrs.
Lecture

5%

Reading

10%

Audiovisual

20%

Demonstration

30%

Discussion group

50%

Practice by doing

75%

Teach others / immediate use

90%

D. Sousa, (2001). How the Brain Learns

Some key themes in this course

These are times of tremendous change and

therefore tremendous opportunity

The traditional boundaries between the forprofits and nonproftis are changing

Given the complexities of nonprofit

leadership, strategic discipline is essential

Overview of Nonprofit
Organizations

Nonprofit Organizations
Organizations which enjoy tax exempt
status as a result of being organized to
serve a broad public interest.

Nonprofits and profits

Nonprofit organizations are permitted to generate

a profit

However, nonprofits may not distribute their

profits to their staff or directors nondistribution
constraint

Surplus must be used to further the mission of

the organization

Why do we have nonprofits?

(in pairs)

The nonprofit world has been experiencing

significant changes

Increasing privatization of government services

(education, health care, social services, the arts)

Increasing financial pressure on nonprofits

Increasing concerns about the efficacy of nonprofits

Increasing corporate social responsibility initiatives

and funds

Other trends?

Source: Social Enterprise: Private Initiatives for the Common Good (Harvard Business School)

Some of the management challenges

of the nonprofit enterprise

Defining and measuring success (economic

stability and growth is a subsidiary goal).

Raising funds cannot sell the company shares

Attracting and motivating people given the often

limited resources and the nondistribution
constraint (no profit-based incentives)

Strategic Planning in Nonprofits

What is strategy?
Getting critical resource decisions
right allocating time, talent, and
money to the activities that have
the greatest impact is what
strategy is about.

Source: The Bridgespan Group is a nonprofit,501(c)(3) organization applying leading-edge management strategies,
tools and talent to help other nonprofits and foundations achieve greater social impact.

Strategic Planning
The process of developing a
comprehensive document that sets
forth what and organization is working
to accomplish and how it intends to
succeed

Source: The Bridgespan Group

The Strategic Plan

Connects the mission and the programs

Establishing performance measures that are

understandable to all

Encourages strategic thinking the best

allocation of scarce resources
The strategic planning process is as valuable as
the end result

Four main components of strategic

planning
1.

Strategic clarity
Mission statement
Intended Impact
Theory of Change

2.

Strategic priorities: What specific actions and activities

must take place to achieve the intended impact

3.

Resource implications: To pursue the priorities, and the

plan to secure them

4.

Performance measures: Establishing the quantitative and

qualitative milestones to measure progress

Source: The Bridgespan Group

The University for Peaces

Mission Statement:
To provide humanity with an international institution
of higher education for peace and with the aim of
promoting among all human beings the spirit of
understanding,
tolerance
and
peaceful
coexistence, to stimulate cooperation among
peoples and to help lessen obstacles and threats
to world peace and progress, in keeping with the
noble aspirations proclaimed in the Charter of the
United Nations".
Which functions does this mission statement fulfill?

The Earth Charter Initiative

The mission of the Earth Charter Initiative
is, "To establish a sound ethical
foundation for the emerging global
society and to help build a sustainable
world based on respect for nature,
universal human rights, economic
justice and a culture of peace."

The mission is the centerpiece of

the nonprofit organization

It serves a boundary function

Serves to attract and motivate stakeholders

(donors, staff, and clients)

Should help in the process of evaluation

The challenge could be see to create a mission statement

that is specific enough to inspire, but sufficiently broad to
allow strategic redirection

A nonprofits theory of change:

Theory of Change: Explains how the

organizations intended impact will actually
happen.
In other words, why will the organizations
approach bring about the desired change.

To clarify a nonprofits theory of

change, ask:
1.

What are the most important elements of our

programs?

2.

What assumptions led us to choose these particular

program element?

3.

Are there other ways to achieve the desired

outcomes? Why are we not taking that approach?

A nonprofits Intended Impact provides a

bridge between mission and programs

Intended Impact: Is a statement about

what the organization is trying to achieve
and will hold itself accountable for within a
period of time. It identifies both the
benefits the organization seeks and the
beneficiaries.

To clarify an organizations intended

impact, ask:
Who are the beneficiaries?
2. What benefits do our programs
create?
3. What wont we do?
1.

2. Determining strategic priorities

is the next step

Looking at current programs

How do they align with mission, intended impact and
theory of change?
How much do they cost? (per outcome?)
Do they play into the organizations strengths?
How do they compare with peers?
Changes that should be made?
Modify
Add new ones
Discontinue

3. Resource Implications human

and infrastructure
What

will it cost to implement?

Whats the gap?
Financial projections for new strategy
Scenario planning
UPEACE Strategic Planningstar, constellation,
galaxy

4. Performance measures

Need to collect data INDICATORS

Program milestones
Quantity
Quality

Operational milestones
Human resources
Infrastructure

Financial milestones
budget
In establishing performance measures, it is important to be
clear about the timing and ownership

Measuring success in nonprofit organization

1.

What makes measuring success particularly difficult in

the nonprofit environment?

2.

What was the problem with the bucks and acres

measurement system of the TNC?

3.

What approach did the American Cancer Society

(ACS) adopt given its challenge?

4.

Any questions/points you want to discuss on the

reading?

Small group exercise on

developing strategic clarity
1.

Select one member in your group to share his/her

organizations mission and main programs

2.

Work together and draft the organizations Theory of

Change on your flip chart

3.

Clarify the organizations Intended Impact

4.

Discuss what indicators are currently being tracked.

What should be added?

Lessons learned from Measuring what

matters in Nonprofits

Measuring mission depends on measurable goals

Keep measures simple and easy to communicate

Measures are marketable

Measures are only as good as the use to which

organizations put them

 Returning

to the milestones over time is

a sign that your organization is
continuing to think strategically

Managing in Tough Times

1.
2.
3.
4.
5.
6.
7.

Act quickly, but not reflexively, and plan

contingencies.
Protect the core
Identify the people who matter most and
keep the group strong
Stay very close to your key funders
Shape up your organization
Involve your board
Communicate openly and often
How is your organization reacting the financial crisis?