Reprinted from TrustedPeer
Meet the Expert
Senior Advisor, The Bridgespan Group
- More than 40 years experience in strategic and operating leadership.
- Works with clients on issues of strategy and scale across a wide range of fields; particularly active with national networks serving disadvantaged youth populations, public education, and voluntary health networks.
- Has worked with more than 30 networks, including Boys and Girls Clubs of America, Big Brothers Big Sisters of America, YMCA, America’s Promise Alliance, Communities in Schools, NatureServe, Alzheimer's Association, Salvation Army, National Academy Foundation, Public Education Network, and United Way Worldwide.
- Joined Bridgespan after 13 years in the biotechnology industry – as chief strategic officer of Organogenesis, the first company to successfully develop a living human skin replacement product; president and CEO of T Cell Sciences; VP marketing and business development for Biogen; EVP and chief strategic officer for Biocode; and chief strategic officer for ImmuLogic.
- Before entering the biotech industry, Alan was a manager at Bain & Company and spent 13 years in the diesel engine industry.
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Optimizing Alignment, Impact and Sustainability of Nonprofit Networks
Senior Advisor, The Bridgespan Group
- There is a shift from the 20th century focus on increasing scale to a 21st century focus on using scale to increase impact.
- In other, less tight economic times, nonprofit networks emphasized expanding their footprint by having more local offices and serving more people. But now the pressure is on to do things better to increase the impact for the target constituents and to do this more efficiently. Donors demand evidence that nonprofits' work is actually effective – it's no longer enough to just say, "We served so many people, an increase over the previous year." Lots of nonprofit networks have been successful in delivering measurably better results, largely because staff members from the central offices work collaboratively with the affiliate leaders to align high-level strategy with on-the-ground service delivery.
- Collaborations and partnerships that have real impact are on the increase.
- People are realizing that the fixes to society's ills are complex. It's not a matter of just providing housing, or job development, or health care – strategies for these approaches need to be integrated, and you need a suite of approaches to get things done.
No one organization can deliver everything, and everything is connected. So rather than have organizations fight against each other, funders are insisting that they collaborate on delivering solutions. The federal government is increasingly demanding grant requests come from a defined collaborative. Large foundations are looking for ways to leverage the effectiveness of their grantees by getting them to work with others. And some ultra-high-net-worth philanthropists are supporting the growth of favorite program models by asking the nonprofit to grow through the existing infrastructure of established networks.
- Funders demand more evidence of performance, not just of purpose.
- It used to be the case that a nonprofit's success was measured by its activities, and you could get donor support by pulling on heartstrings. But now funders are interested in outcomes reporting – in measuring real results. It's no longer good enough to say, "We care about the downtrodden." Now you have to demonstrate what exactly you've done to improve the lives of the downtrodden.
This shift has happened in the last ten years or so, and it's partly because people who made money that is being distributed to charities are more active in giving it away (think Bill Gates). People like that are interested in results, and they're accustomed to evaluating success based on spreadsheets and data, not just stories. The shift is also a result of the recession, when "bang for the buck" became increasingly important.
Money now flows to organizations that can really demonstrate impact, and organizations like the Social Innovation Fund (a federal program) and the United Way require performance reports that are rooted in metrics. Some funders even allow organizations to build the cost of delivering sound performance metrics into the grant budget.
- The increased interest of corporations and employees in corporate social responsibility makes networks natural partners.
- Large corporations that have a national presence like national banks and national franchise programs have a footprint in many communities. When they're developing their corporate social responsibility agenda and programs, it's easier for them to get behind organizations that also have a footprint in many communities, rather than picking a local in each separate community. Six of the top ten funders of youth-serving networks are corporate foundations rather than the private foundations who lead in most other grant giving.
- There are increased demands on local organizations for professional management (IT, HR, performance measurement).
- Because the standards of performance for nonprofits have improved, the skill sets for people at those organizations who are involved in performance measurement have become more sophisticated. Management, budgeting and finance, for example, need to be much more sophisticated just to meet the requirements of today's 990 reporting.
And nonprofit organizations need to be ready to pay for those more advanced skill sets. The increased need for professional skills beyond just running a program or gaining support from local donors is putting a real strain on the ability of smaller locals in a network to keep up with the new performance requirements. The mission of the network and its members requires a local presence, but the increasing infrastructure needs may make the historical model of operations uneconomic going forward.
- Brand excellence requires greater consistency in performance.
- If you want a really strong brand – and "brand" is ever more important in the nonprofit world – you have to be consistent and deliver the same quality programs regardless of the location. Consistency in terms of performance is really crucial, not just intentionality of performance. And with national organizations that serve very different communities, it's often very tricky to keep the brand consistent. Imagine the difference, for example, between the community served by the Boys and Girls Club in Oakland, CA, versus the Boys and Girls Club of a small town in Iowa.
Optimizing Alignment, Impact and Sustainability of Nonprofit Networks: Key Trends