Act Like a Business
Disclaimer: We firmly believe in the potential of nonprofit organizations to achieve the dualistic goal of doing well and doing good. However, we caution against the oversimplified advice of nonprofits merely emulating for-profit businesses. Instead, we want to encourage non-profits to explore cross-sectoral business levers that have the potential to drive impact.
Lever #1: Harness the Power of Data
Creating a sustainable, smart, impactful nonprofit requires more than good intentions. Amidst the complexity of competing stakeholders, departments, and activities, data emerges as the great equalizer. It serves as the common language that unites everyone, ensuring we row together in the same direction. Here’s why data deserves your attention:
Insights and Decisions: The right data leads to informed insights and strategic decisions. It guides your organization toward achieving its vision, mission, and purpose.
Performance Evaluation: Data reveals what’s working and what isn’t. It helps you fine-tune your initiatives and stay focused on your goals.
Remember, don’t be shy and meet your data head-on.
Lever #2: Invest in Your Stakeholders
Whatever your mission, decreasing food insecurity, empowering older adults, or creating more equity, you can't achieve your goals by going at it alone. Both for-profit and nonprofit sectors thrive on solid stakeholder relationships. Here's how to invest in them:
Step 1: Complete an inventory of your internal and external stakeholders, including funders, partners, volunteers, and board members.
Step 2: Bring them to life and create a portrait by investigating their motivations. What are their jobs to be done? What do they need or want? What practical and emotional needs and wants matter most to them? What does success look like for them? What do they bring to the table? What do they expect from the organization?
Step 3: Prioritize. We all have limited resources, so prioritization is key. We can't meet everyone’s needs equally or simultaneously.
Lever #3: Measure impact, not just activities
Most non-profits invest in developing Theory of Change models and focus on the front end, measuring input, activities, and outputs rather than the outcomes. Let’s be honest: measuring and quantifying activities is much easier than outcomes. We can all count the number of meetings we had, the number of people who came onto our website, the number of signatures we gathered, and the number of conferences attended. We have a more challenging time gathering the information that talks about outcomes. We have an even harder time demonstrating the impact because that data is often private and because the surveys we usually use tell us how people feel and think but not what actually changed in their lives.
Measuring activities is super important, but it won’t create the throughline you need as an executive. Measuring impact, on the other hand, connects everything in your organization, from your purpose, vision, and mission to the metrics and KPIs. It will help you run an efficient, effective organization. It is also what will help you build the business case for your board and funders to show you are changing actual lives.
We get it. The dualistic goal of doing well and doing good can seem daunting. It’s undeniably complex, but we want to encourage non-profits to adopt these three levers to achieve more success in achieving their missions.
