According to the findings of a study in the Stanford Social Innovation Review in 2012, only 1% of more than 200,000 non-profits established between 1975 and 2008 grew to $50 million or more in annual revenue. Considering that these organizations were aiming to address some of the biggest problems the world is facing, this number is a strikingly low one.
Barring reasons such as organizational structures, financial models, high turnover rates and low donor retention, a sense of satisfaction and contentment with being "good enough" seems to have held back these organizations from becoming truly great. Imagine the extent of change a nonprofit could achieve if they didn't settle for good enough and strove to go beyond that to be truly great.
Therefore, what is it about being good enough that keeps nonprofits from aspiring to be great? It is the comfort of the status quo? It is the knowledge that they are getting-by by following processes and structures that were set long before and are getting the job done? Be it compliance, financial management, stakeholder reporting, donation or grant management, program management or any of the other critical measures of success for nonprofits, over the years there have been benchmarks set and nonprofits have become good at adhering to these requirements.
In an increasingly competitive landscape where donor dollars are becoming harder and harder to come by, improved internal processes combined with adoption of industry-focused technology solutions could be the difference between being good and great. But in order to do so, to want to truly deliver on their mission, nonprofits need to envision what that state of greatness is that they need to achieve and how would they fill the gap between the present and the future state they aspire for. Boland, Lemieux and Ross, in Non profit PRO; Good to Great: Growth Strategies for Up and Coming Non Profits, say the start of this process is by becoming brutally honest. Honest about what the current state of the nonprofit's processes are, and where it wants to be.
Let's focus on one area to dive a little deeper – Managing Data
As stakeholders lay more stress on compliance and reporting, the management of data is becoming central to this discussion. Most nonprofits today are tracking and storing data, in one way or another. Some are very good at meeting the required standards for reporting, while others more often than not find themselves struggling at the last hour. Yet another group finds themselves on the wrong side and at risk of losing funding.
Sheri Chaney Jones states in Impact & Excellence, says that the mere collection of data is not a measure of success. How the data is used is what that measure is. She goes on to talk about the three main types of data utilization approaches that most organizations adopt:
- Dust Collectors and Recyclers
- Compliance Officers and Ruler Whackers
- Coaches and Motivators
The Dust Collectors and Recyclers seems to be the largest group. These would typically be nonprofits that have adopted technology and have access to systems that help them save and track data and run reports when required. However, this group's use of data will end with this and rarely be used as an input to help determine long-term performance or strategic planning.
The second type of person, Compliance Officers and Ruler Whackers, have systems in place that give them similar abilities but the outcome is used in a punitive manner rather than in trying to address the cause of an outcome.
Coaches and Motivators are the group that saw the highest level of organizational success. This group used data like the others but went the extra mile to analyze poor performance, thus finding the root cause and then putting measures in place to fix the problem.
Nonprofits need to reflect and be brutally honest if they are adopting best practices on data management or if there is more to be desired. You may be a highly respected nonprofit but will your present data management methodology help you achieve your true mission?
In the presence of innumerable data management solutions - Financial Management, Grant Management, Case Management and Donation Management software - it becomes extremely important for organizations to assess which one will give them the fuel to power ahead in the 21st century.
It is time to question the status quo, which understandably is painful, but nonprofits need to own this pain for the greater good. It is time to look not only within the nonprofit ecosystem and learn about best practices from the 1% of the organization who achieved scale, but also at the partner ecosystem – the technology solutions providers who are innovating with the hope that their solutions will help create a far reaching impact around the world.
Interested in learning to identify, capture and utilize impactful data to create an organizational transformation? Register for our free webinar on February 23rd at 2pm EST where we'll be diving deeper into Sheri Chaney Jones' book, Impact and Excellence.