In essence, the coherence premium is a simple concept—that organizations should focus on doing what they do best and apply those unique abilities to opportunities in their field. Yet, we as humans have a hard time accepting that the best strategy is often the simplest one. Our tendency to complicate matters stretches resources while mudding the water of the operation. Adherence to the coherence premium appears to be especially hard in non-profit organizations. With competition for funding and resources becoming fiercer, non-profits grab at whatever straws they can to secure these items. Often times, this haphazard strategy results in creating programs that are outside the mission, which further strains an organization’s limited resources.
A mission is supposed to be a non-profits guiding principal. All decisions and strategies about how best to run the organization in order to better serve the community should further the mission. But even non-profits fall prey to stretching the mission in order to secure funding. Non-profits, unlike the businesses noted in The Coherence Premium, generally don’t acquire other non-profits, or other entities for that matter. Non-profits tend to acquire programing all in the name of securing funds or additional resources. The flaw in this logic is that the money secured has to go to the specific program funded, rather than other programs that really need it. Thus creating additional programs only to secure funding stretches the resources even farther, taking resources away from the systems that are actually in line with the core mission. Non-profits, like all organizations, need to accept that they can’t be everything to everyone, and this approach—creating a program to secure funding— creates challenges being the best, given the organizations particular strengths.
Non-profits preach that their mission is who they are, but often times do not show this with their actions. Why is this? With limited funding, it is difficult to say no to something when it means money coming in the door, and at the end of the day, non-profits need money just like for-profits. For many organizations, it is better to be able to show the Board that more money was brought in and a program was created than it is to show less money but be truer to mission. The Board often times applauds such endeavors without questioning the logic behind the additional programs, and their impact on the long-term sustainability of the organization. This begins a cycle of incoherence, where non-profits are left with a portfolio of under-performing programs with little to no impact on the community.
For non-profits, coherence rests on the mission and their ability to serve the community based on that mission. There is no valid reason why organizations in other industries are comfortable saying “no” to funding to stay true to their identity, but for non-profits it is acceptable to reach outside mission, so long as funding is brought in. Non-profits need to take the time to stop and ask themselves whether the grant will further the mission without stretching resources. If the answer is no, it has to be okay to walk away.