Businesses don’t have to wonder whether they are creating value. If they are able to sell their products profitably, then by definition they are creating value for their customers that exceeds the cost of doing business.
Nonprofits generally emerge when people need something but can’t pay all of the cost of providing it. Or, like churches and symphonies, when the members don’t want to exclude people who lack financial means.
Because a nonprofit’s work isn’t priced for profitability, measuring its effectiveness and guiding its work is more complicated. Furthermore, a nonprofit has two sets of customers – its clients, who use the service it provides, and its funders.
When a nonprofit grows, it can serve more of its clients’ needs and aspirations. This goal gives meaning to its existence. But funders must see that the resources they provide will be managed well. This requires disciplined management, including systems and accountability for effectiveness (assuring the organization’s resources are focused on the right things) and efficiency (assuring that enough of the right things are being produced with the resources provided).
We help nonprofit organizations put in place the disciplines they need to be effective:
- Strong boards that govern effectively. Your board has the potential to be an invaluable resource, but most nonprofit boards fall short. Some are passive and inactive; others are hyperactive, meddling constantly with operations details. We can help you with every step towards creating an effective board, from recruiting and training its members to structuring its processes.
- Strategic plans that guide development. Real strategy is rare. Most so-called strategic plans simply project current operations several years into the future. But disciplined, creative thinking about the future has great power. We can help you develop a planning process with the right balance between board and staff involvement, and facilitate planning meetings and retreats at the right time in the process.
- Financial management that creates opportunities. The most successful nonprofit organizations differ widely in mission and structure, but they all share one common trait: Outstanding financial management. There are three essential facets: 1) disciplined budgeting and planning to allocate resources; 2) financial controls that safeguard the organization’s assets and, even more important, its credibility; and 3) performance measurement that enables accountability for the organization’s effectiveness and efficiency.
