It is practically cliche to say that “nonprofits should be run more like businesses”. While there is some wisdom hiding in this phrase, it has always seemed vague at best, if not patronizing or even misguided. Why is that a good idea? What would it mean in practice? At last, we have some compelling answers from someone who knows what they’re talking about.
Leap of Reason: Managing to Outcomes in an Era of Scarcity is Mario Morino’s call to action for nonprofit leaders and funders. There is something worth reading here for almost anyone involved in the social sector, whether nonprofit staff, leadership, board, donor, foundation, or even volunteers. The questions Morino poses will hopefully make you see your work in a new way, and may open up new dialogs between funders and organizations, and between organizations and the people they serve.
Morino sees a number of forces threatening the effectiveness of most nonprofits and the people they serve:
* Public sector funds are being slashed; safety net programs are threatened.
* Demands for many nonprofit services are growing, due to economic distress.
* Nonprofits don’t always have good data to manage from, or the skills to use it, and may rely on intuition and anecdote instead.
* Funders want more transparency into the real impact of their investments.
The way to meet these challenges, according to Morino, is for all the players in the social sector to adopt a framework of “Managing to Outcomes“. In particular, Morino believes nonprofits must reach clarity on what change they’re trying to create, acquire specificity on how they will accomplish that change, determine what information they need to track how they’re doing, and then use this feedback to make continuous improvements.
Morino also lays down some challenges for funders. “We funders need to help our grantees define, create, and use the information they need to be disciplined managers,” says Morino, “rather than foisting unfunded, often simplistic, self-serving mandates on our grantees.” In particular, he points out that when funders insist that every dollar go only to programs, they starve their grantees of the operational support they need to become more effective. Unfortunately, many nonprofits jump through reporting hoops set by funders, but that data is often not used by the nonprofit itself to improve program outcomes. This risks bureaucratic waste on one side, and hollow self-justification on the other.
This well-edited volume is slim but packed with useful examples and exercises. Morino speaks with candor from nearly two decades as a pioneer in venture philanthropy and outcome-based management. He and his co-authors offer candid and nuanced reflections on what has worked and what hasn’t, and incorporate those lessons learned into a framework for action. Leap of Reason and its companion site provide a gateway to resources that can help nonprofits start Managing to Outcomes, and hopefully do more with less.
What do you think? Can “Manage to Outcomes” displace the “run your nonprofit like a business” meme?