I had lunch the other day with a brilliant woman who recently left her job as a finance VP at a major corporation to join a medium-sized non-profit as the new CFO. She was tired of the corporate grind and wanted more meaningful work.
But things were quickly going south.
"Good grief," she sighed. "We spent an hour at the board meeting arguing over the decorations at the upcoming gala. Our strategic plan hasn't been updated in two years. We have zero in the way of metrics and quality improvement. It's one big conversation club-- it takes months to make a decision. My old company was ruthless, but at least we got stuff done. I'm beginning to miss it."
Sound familiar? Here's another recent conversation with another respected leader, a highly successful executive director and board member for some of the nation's most prominent non-profits:
"After 20 years as an executive director of three organizations and a board member of many others, I launched a tech startup. Let me tell you: working with all these young people, I was so delighted with the urgency and drive and risk tolerance I saw in them. These qualities are largely missing from so many non-profits."
The non-profit sector is filled with beautiful people and amazing programs. But do the majority of non-profits suffer from cultural elements that ruin their potential to behave entrepreneurially and to grow? The evidence says yes.
Consider that only a handful of non-profits in the last 50 years have grown past $50 million in revenue, while tens of thousands of other companies have blown past this growth milestone.
It's an urgent issue with tremendous consequences. Around the world, non-profits have the job of tackling some of our most urgent challenges: Poverty. Education. Environmental destruction. Injustice. You name the challenge, and there are good non-profits hard at work on it.
Together, the effort strains millions of people and consumes trillions of dollars. But we have to ask ourselves a tough question: how much is the culture of these non-profits getting in the way?
Let's look at two types of cultural values – one associated with low-performing organizations and one that we would naturally pair with high-performing ones. At low-performing orgs:
- It's OK to think small and celebrate "feel good" efforts that aren't measured against the size of the entire problem
- It's OK to work long hours at low pay
- It's OK to prioritize organizational safety and caution over experimentation and risk
- It's OK to move slowly, slowly, slowly
- It's OK to celebrate success around raising small sums of money, and to run low-ROI, transactional fundraising operations that do not scale
- It's OK to pretend our work is too complex to be measured--we just need long conversations, ambiguous strategy documents, and vague deliverables.
Do any of these resonate with you? While many recognize these cultural deficits are problems, most accept it with fatalism. Oh, it's just a struggling non-profit. What can you expect?
We need to do better. Let's look at a different set of values that we associate with the leading-edge non-profits who employ bold, entrepreneurial leaders and gifted staff. These people are working together as a team to tackle the biggest challenges. They have built a culture of high-performance. These organizations:
- Have a "go big or go home" attitude. They measure how much of the problem they are tackling with hard, simple numbers, and they push hard to solve all of it.
- Have a specific plan to solve the entire problem – with hard numbers, accountability, and an explanation of how they will pay for it all
- Are biased toward action, experimentation, and risk, driving forward with a sense of urgency and shared purpose
- Are collaborative – everyone works hard and supports each other
- Focus on the smartest ways to generate revenue so they can recruit and retain top people and grow the org so it can solve problems, not just nibble at the edges.
These are the extremes. Very few organizations are fully at either end of the cultural spectrum defined here. But it is likely worthwhile to ask yourself: where do we sit in this spectrum? Should we be thinking and talking about this – and doing things to move from one part of the spectrum to another?
We at Altruist have a bullet-proof, battle-tested process for helping non-profits becoming high-performing, high-growth organizations. And in a decade of developing, testing and deploying our system, we've learned the truth of the old phrase, culture eats strategy for breakfast.
We think that there needs to be more discussion of the challenges and opportunities around non-profit culture, and we hope this short piece helps keep this critical issue top-of-mind.
Donald Summers, founder and managing director of Altruist Partners LLC, is a speaker, author, social entrepreneur and management consultant with a long track record of catalyzing dramatic gains in impact, growth and performance. His clients influence state, federal and international laws and regulations, and are regularly featured in major media outlets such as The New York Times and "60 Minutes." In addition, his essays, articles and commentary have been published by the American Academy of Arts and Sciences, the Chronicle of Higher Education and Harvard Magazine.