Nonprofits are a critical part of our society, stepping up to help those who need it most. They feed the hungry, house the homeless, advocate for human rights and much more.
One of the most admirable aspects of nonprofits is how dedicated they are to their core mission. But sometimes, this devotion leads nonprofits to develop a blind spot: their own organizational health. It’s hard to find the time to look inward when you’re busy helping others. Yet if a nonprofit isn’t organizationally healthy, it is much harder for it to reach its goals. Indeed, when a nonprofit overlooks its financial and administrative health, the consequences can be dire — from ballooning overhead costs to programs that don’t achieve their desired impact.
This is especially true right now, as nonprofits continue to weather an unpredictable pandemic. Decreased revenue, postponed or abandoned programs, and declining participation have left many organizations in a challenging spot. So more than ever, a focus on core strengths and clear operations is essential.
So, here is a plan for analyzing and adapting your nonprofit’s health.
Make Evaluations a Habit
Evaluating your nonprofit’s health isn’t a one-time exercise — it should be a recurring practice. Set regular periods for assessments depending on your needs: It could be every quarter, once per year, or once every three years. There are a few tell-tale signs that an evaluation is necessary. These include mission creep (when your objectives begin to expand beyond what’s realistic), unsustainable financial health and stagnant programming.
Have a Well-Defined Goal
Before you begin your evaluation, know what you want to get out of it. Are you seeking to explore new markets? Add new leadership? Develop more innovative programming? To help you identify these goals, you can use tools like a SWOT (strengths, weaknesses, opportunities, and threats) analysis, which will crystallize your organization’s greatest assets and flaws alike.
Employ a Clear Process
Organizational assessments don’t need to be complicated, but they should be done correctly. There are a few key ingredients to any successful evaluation. These include a careful review of your organization’s administrative structures (how you communicate, fundraise, hire and measure success), leadership roles (such as the scope and responsibilities of your organization’s board), programming (incorporating precise costs and impacts) and finances (both short-term and long-term fiscal strategies). This last step is especially important given the impact of the pandemic.
Include the Right Audience
An effective evaluation needs to be inclusive — it can’t be done by a small cadre of senior leadership. Everyone should have a chance to weigh in and shape the process, from the board and staff to the constituencies you serve. Each of these groups has an indispensable role to play. The board, executive director and other senior leadership can drive the process, staff can provide reflections and team discussions, and constituents — like donors and clients — can provide insight into what they need and expect.
When done right, an organizational analysis can have tremendous ROI. For a real-world example, consider Sweet Generation, the New York City-based bakery and social enterprise that provides job training, kitchen experience and educational support to young adults from historically marginalized communities.
In a recent evaluation, Sweet Generation first established a key goal: generate new business plans. This was essential because the traditional business plan was in jeopardy – the pandemic had limited its ability to bring in funds through catering and in-person culinary classes, and so they urgently needed to pivot.
The process began by closely reviewing each aspect of current operations. An in-depth landscape assessment followed, revealing how similar organizations in the industry were adapting to COVID-19 restrictions and downturns. Finally, leadership, staff and constituents all made their voices heard – adding to the mountain of valuable information already collected.
By the end, Sweet Generation had exactly what it needed – an informed, robust recipe to make their pivot a success. A menu of new services was developed, along with financial models and revenue projections. Their one-year business and operational plan also incorporated guidance for implementation of the new revenue-generating services in both the immediate and long-term. That’s an impressive ROI.
Analyzing and adapting your organizational health can benefit your nonprofit — and the people it serves — immensely. Generally, the returns far outpace any costs associated with the assessment itself. It can make your nonprofit less redundant, more efficient and organized, and laser-focused on your issue — unlocking the ability to do even more good.