Wednesday, December 2, 2015

Do Nonprofits Get a Pass When it Comes to Strategy?

“It’s a dirty little secret: Most executives cannot articulate the objective, scope and advantage of their business in a simple statement. If they can’t, neither can anyone else.”

David Collis and Michael Rukstad reveal and discuss the above secret in their article entitled, “Can You Say What Your Strategy Is?” They clearly articulate that it is the few organizations that have a focused written strategy, where all executives and employees are able to express the strategy, that “are the most successful in their industry.” While Collis and Rukstad focus on for-profit companies, it is not much of a stretch to assume that statements of objective, scope and advantage apply equally to nonprofits; but do they actually?

In researching several national nonprofits; such as The Red Cross, Salvation Army and Goodwill; only Goodwill had a noted strategy, and the Board only implemented the process starting in 2005. Up until their first three-year strategic plan, branches across the nation were left to their own devices to carry out the mission and vision of Goodwill. Furthermore, in digging into Goodwill’s total revenue prior to and after 2005, I found something startling: total revenue has continuously been large. According to the sources listed below, total revenue in 1998 was $36,823,906 then $58,130,276 in 2003 then $56,295,792 in 2013.

How is it possible that national nonprofits are able to be successful even without a clearly agreed upon strategy? Could it be that nonprofits get a pass when it comes to developing strategies? After all, almost none of the national nonprofits, all successful in their industry, had a defined strategy; and even the one that did (Goodwill), they did not see much change in their already large total revenue. The answer, I believe is no. For while these successful nonprofits may not have a business strategy, they most certainly all have a defined mission, focused vision, and clearly written fundraising strategy.

Unlike for profit business, nonprofits measure success across two separate sectors: services and fundraising. And it is the fundraising sector that needs to have the clear and defined strategy. A nonprofit needs to know 1) what funding goal amount they are working towards (objective), 2) where their funding is coming from and where it is not coming from (scope), and what it is about their programs/services that make their ability to receive funding distinct. Without these key pieces of information, none of the national nonprofits listed above would have been as successful as they are today.

References

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.