High Performance Nonprofit Organizations: Managing Upstream for Greater Impact

Citation

Cassell, K.A. and Mercado, M.I. (1999), "High Performance Nonprofit Organizations: Managing Upstream for Greater Impact", The Bottom Line, Vol. 12 No. 1. https://doi.org/10.1108/bl.1999.17012aad.001

High Performance Nonprofit Organizations: Managing Upstream for Greater Impact

High Performance Nonprofit Organizations: Managing Upstream for Greater Impact

Christine W. Lets, William P. Ryan and Allen GroomsmanJohn Wiley & Sons, Inc.New York1999

Keywords: Best practice, Non-profit organizations, Performance improvement, USA

This book is an outgrowth of the authors' (Christine W. Letts, the Director of the Hauser Center for Nonprofit Organizations at Harvard University, William P. Ryan, a Cambridge-based consultant specializing in strengthening the performance of nonprofit organizations, and Allen Grossman, a Senior Lecturer at Harvard University's School of Business) work with helping nonprofits expand, successfully create and widen their social impact. The nonprofit sector, which now accounts for 8 percent of the Gross Domestic Product of the USA and 7 percent of total employment, with an annual payroll of $480 billion, plus thousands of volunteers, encompasses a vast array of organizations such as universities, healthcare providers, nationwide membership groups such as the Girl Scouts, Common Cause, Planned Parenthood, Right to Life Groups, religious orders, foundations and social service agencies.

According to the authors, the nonprofit sector represents not only our society's best inclinations, generosity, and determined optimism, but it also attempts to bridge the many gaps in society by bringing people together, proposing alternatives, advocating change, and implementing remedies. In the course of providing extensive benefits for a wide range of people and communities, it has built an enduring legacy of service and community. Yet, the nonprofit sector faces an increasingly complex array of critics who question the value generated in return for their tax advantaged status.

Thus, individual nonprofit organizations and the sector as a whole continually fall short of lofty expectations as they face almost insurmountable challenges. To alleviate some of the financial pressure placed on this sector, nonprofits are refining their fee-for-service structures and have created for-profit spin-offs which have brought them government contracts for activities such as child care, education, elder services, programs for at risk youth, and employment training. Yet, it is clear that while funders and governments pay "lip service" to the traditional nonprofit values of service and compassion, in their contracts with nonprofits they demand effective, cost efficient services of consistent quality. This means that nonprofit leaders, whether they be CEOs, boards of directors, managers, staff, volunteers or researchers must redefine the challenge, as one of expanding effective programs to a new formulation of the challenge, i.e. building effective organizations that can sustain and improve those programs.

The authors examine the idea of the adoption of the best methods of successful businesses to the nonprofit sector. Specifically, they convened a panel of experts to define the relevant questions that would focus on organizational performance as the critical factor in determining social impact. They began to pursue the broader question of what issues influence success and sustainability of nonprofits at any scale. Analyzing these questions led to a roundtable discussing a series of management practices and organizational processes that could help nonprofits better serve their missions. Second, the roundtable discussed whether a given organizational process was relevant to the nonprofit sector. It was determined that both the managers in the for-profit sector and those in the nonprofit sector used similar processes for the same reasons, i.e. for improving performance. They asked questions such as: what environmental factors, external factors, and internal factors enable organizations to enhance their performance so that they may accomplish their mission in the most effective and efficient manner? Given this core approach, what this book purports to do is catalog the best practices that managers in the nonprofit sector can utilize to improve the performance of their organizations.

To accomplish the aforementioned purpose, this work is organized into three parts. Part One discusses the adaptive capacity of organizations in terms of building organizational capacity. Chapter Two of Part One makes the point that because organizational capacity is viewed in terms of being valuable and primary for succeeding in the marketplace, the for profit managers are awash in training research and education programs. Also boards and investors encourage them to take organizational capacity seriously. On the other hand, nonprofit managers are expected to obtain heroic results with few of these supports. In fact within the nonprofit sector, programs and organizational capacity are viewed as competitors in the zero sum struggle for limited resources.

Part Two analyzes four organizational processes that nonprofits sometimes use to improve their performance. These are "quality processes," which are defined as those steps taken to review the quality of service and the generation of improvements that will benefit clients. Second, "product development" is viewed as maximizing the effectiveness of programs by tapping the best talent and creativity in the organization to study the needs of the clients. The third is "benchmarking," which means to identify and implement the best practices that respond to the nonprofits' learning and improvement needs. Fourth, the authors cite "human resources management" as the way to attract, motivate and develop employees to advance the organization's goals and mission. The authors also include brief case studies from the nonprofit and for-profit sector that demonstrate how each sector uses these processes to build organizational capacity.

Part Three explores how other nonprofit stakeholders, not just managers, create an "environment that raises both support for and expectations about organizational performance. Thus the authors consider the role of three important stakeholders, i.e. "boards of directors," the "national office" and "funders." According to the authors, board members with considerable experience in both sectors can lead the way in creating support for developing organizational performance. The national office of multi-site operations must be given the resources to meet the challenge of sustaining performance and impact among those on the front lines. In addition, funders should combine their investments with organization building assistance so as to ensure the success of those they support.

High Performance Nonprofit Organizations presents an agenda for transforming the nonprofit environment by not only making the reader more aware of the importance of organizational performance and capacity, but also by making nonprofits more supportive of their managers. For those laboring in the nonprofit sector trying to enhance their service to their clients and community, this book is recommended reading. The authors are adventurous in their attempt to recognize the utility of management processes that enhance responsiveness to clients and support quality improvements, not just to satisfy funders but also to produce better outcomes. It is clear that, in order to fulfill the mission of the organization in an effective and efficient manner, it is important that teamwork be an important element in the day-to-day activities of the nonprofit organization.