Need-Based Planning in Nonprofit Organizations
by mollypenn
For the past twenty years, we have experienced a period of huge economic growth. The effect of that economic growth on the nonprofit sector has been a parallel growth in “capacity building” projects, such as strategic planning. Foundations realized that the nonprofit sector was growing and needed to improve its organizational capacity to keep pace with this growth, so they funded initiatives that built the internal capacity of the organization.
Jim Collins had a huge influence on the philosophy behind this internal capacity building. In Built to Last, he profiled for-profit companies that used what have traditionally been nonprofit practices, such as being mission-driven, to excel. Then in Good to Great he took for-profit ideas and applied them to nonprofits – such as “getting the right people on the bus” and “big, hairy, audacious goals.” No longer did nonprofits feel that altruism was the most sought after quality in terms of human resources. Getting the right people on the bus gave nonprofits permission to raise their salary structure to attract the right people, a legitimate focus on building organizational capacity through human resources.
Over the same period, ever increasing numbers of nonprofits engaged in strategic planning to improve their ability to serve their missions. They aligned themselves around a common vision of the future, and around their mission. They created programs that were responsive to the market in which they operated (funding streams, external market trends and forces, stakeholder expectations). They planned for growth that was organized around their core services. These have been important developments for the nonprofit field – they have improved and transformed the field into a truly professional enterprise.
But as the economy is in this state of depression, I find myself looking forward and wondering “what have we lost sight of?” Nonprofits have institutionalized “best practices” from the for-profit field, such as social entrepreneurship and strategic planning and developed their capacity to serve their missions. Somewhere along the way though, strategic planning became synonymous with growth planning and the for-profit concept that you must grow to survive. As I take stock of the opportunity for reflection this economic turmoil provides, I find myself genuinely wondering what the sector needs next?
I have come to realize that what we have lost sight of is need. Society draws a distinction between nonprofits and for profits around the concept that nonprofits exist to serve a societal need that is not being met, while for-profits exist to convince people that the product they have to sell is what the market wants to buy. However, nonprofits have begun to fall prey to that way of thinking too – they have begun to use superlatives “we have the best ….” “we are the leader in ….” “we serve more people …” Many of the strategic plans created in the past decade have lead to more staff, more professional approaches, more metrics … in short, growth.
If all businesses must grow to survive, then nonprofits are on a treadmill where they must continually improve efficiency and raise more money than ever before. This year’s gala has to be bigger and more profitable. We have to raise more money than we ever have. We have to make program delivery more efficient – have no unused space, raise enrollment numbers, etc. With the economy in decline, and services already at maximum capacity, we have found ourselves at a crisis point.
When nonprofits do strategic planning, do they really investigate and respond to need? How much time do they spend studying and assessing the state of need for their services? How often do they modify services to fit need, as opposed to modifying services so they can grow more? Need is often assumed, accurately, to be so large that there will always be unfilled need for a given nonprofit’s services. But perhaps what that reflects is insufficient focus within an area of need on a target group or geography that CAN be served.
The sector would be well served, at this juncture (having spent a decade strengthening and professionalizing itself), to invest in studies of the state of need and in analyses of smaller groups within areas of need that could potentially be served comprehensively. This is a culture shift for nonprofits, because it is as much a commitment to what they won’t do as it is to what they will do. Need is counter-cyclical – it diminishes in periods when we are able to raise more money, and increases in periods when less resources are available to serve that need. Rather than trying desperately to serve all the growing needs, might we be better off focusing on what we can accomplish so we understand more about what it means to be successful?
It is time to focus on redefining capacity building to suit our current context. A context where need is peaking, resources are low, and human capital is becoming more available. Where is the intersection of those factors and how can we grow capacity to meet the new state of need?
We have to get a clear and concrete understanding of what this new economy means for the state of need as a starting point to any kind of planning. Identify and target an area of need that where your organization can achieve some measure of success, then use that success as the baseline for the next target group. Once we understand the need for our services, and how to meet that need, we have to build our capacity to meet that need – prepare to hire very qualified people at competitive rates when your resources begin to rebound. Redefine our core program areas around our new understanding of need, and keep an eye on what the next need will be once you have succeeded in meeting the first one. Need should be the evolving definition around which everything else gets planned. With this frame of mind, need will no longer be seen as a never-ending treadmill, but as a set of incremental issues to be addressed, conquered and learned from.
