6 Elements of an Effective Nonprofit




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Earlier this year, Greenlights published On the Verge, an assessment of the Central Texas nonprofit sector. We detailed the various staff and board sizes, budget ranges and mission areas of our region’s nonprofit organizations, along with some calls to action for individual organizations and the sector as a whole. As part of that research, we investigated nonprofit frameworks and built out a structure that organizations of any size or mission could use to understand its capacity and prioritize needs to become more effective in its work.

We recognize that every nonprofit is (and should be) different from its peers in a host of ways. Yet, in the same way that all houses begin with the basic elements: a strong foundation, thoughtful framing, a blueprint for the layout of rooms and wiring, and the goal of housing a family, an effective nonprofit also needs a basic framework around which to live out its mission.

Thus, we have developed an effectiveness framework to call out the specific structural elements that all nonprofits need to have in place, regardless of mission or scope:

Element 1: Clarity of Purpose: How you define and align your work and impact

Regardless of your mission, it should be clear, compelling and used as a guide toward reaching your intended impact. Your work should be based upon a sound analysis and understanding of relevant issues and evidence, and your programs should make smart use of your resources to achieve your mission and strategy. These details are incorporated into an up-to-date and usable strategic plan to direct your overall efforts through a multi-year period. 

Element 2: Sustainable Business Model: How you develop resources and position your organization for success

It is crucial that you base your operating model on a well-developed understanding of your key audience and clients, stakeholders, competitors, and collaborators. The model should be captured and managed through budget processes and financial reporting that are fiscally sound, transparent, and based on realistic assumptions and projections. To support this model, it is important to develop a strong culture of philanthropy and to incorporate earned revenue opportunities where possible.

Element 3: The Right Leadership: How staff and board leaders steer and steward organizational effort

Your staff and board leadership should model core organizational values as they steer all work towards meaningful, measurable, and financially sustainable results. Providing opportunities for board members to contribute strategic capital through their time, financial resources, networks, and skills complements the professional staff’s daily commitment and focus on the mission.

Element 4: Smart Operations: How you manage and marshal organizational resources

It’s not enough to have a good plan. You must recruit, develop, and retain the right people (staff and volunteers) to achieve your mission and effectively support the organization, and you must provide them the necessary tools (including technology, facilities, and policies) to do their jobs to the best of their ability. Greenlights’ The New Nonprofit Workforce research includes recommendations for how organizations can intentionally respond to attract and retain skilled staff to build the next generation of nonprofit leaders. You should also have a robust organizational brand that you build through effective marketing and communications, as well as your organizational culture.

Element 5: Implementation & Improvement: How you use information to adapt and improve

A deep commitment to measurement and learning will infuse your work with higher consistency and quality. By using the right metrics and data to continually improve your work, you are better positioned to recognize when you are on the right track—and to identify failures as opportunities to improve and innovate.

Element 6: Strategic Collaborations: How you leverage the community for greater impact

A key takeaway from On the Verge is the necessity for all organizations to work together strategically, and it is beneficial to be part of networks, coalitions, or collective impact projects to achieve systems-level community improvement. Whatever your mission, there are other organizations that are also working in your space—and possibly even with the same client population. Success requires regular, multi-directional communication with the public, private, and other nonprofit players connected to your mission and activities, giving and receiving thoughtful feedback to your peers to amplify your impact and strengthen the community’s response.

Whether you are serving children or the elderly, tackling a particular health issue or pervasive societal issue, addressing food insecurity or social security, your organization and mission will look different from others, but you should ensure that you build your work on an effective framework that incorporates each of these elements. With a solid foundation in these six factors, you will have the flexibility to creatively serve your clients and meet your mission.

In the coming months, Greenlights will be integrating these elements into our work in a variety of ways, including the development of additional tools and resources to guide nonprofits. And be sure to join us at Mission Driven, where we’ll have a panel featuring a group who worked on another tool to help nonprofits measure their effectiveness called the Performance Imperative. 

The Performance Imperative: A New Way to Measure Nonprofit Effectiveness

  • Steve Butz, Chairman of the Board, Superstar Foundation
  • Adrian Borbone, Co-Founder and VP, Social Solutions, Inc.
  • Isaac Castillo, Deputy Director, DC Promise Neighborhood Initiative

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