It is often said that “nonprofits should be run more like businesses”, but this guidance has always seemed vague at best, if not patronizing and misguided. What would it mean in practice? Why is it a good idea? Finally, we have a compelling answer.
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 make you see your work in a new way, and may open up new dialogues between funders and organizations, and between organizations and the clients 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.
* Needs are growing, due to economy and ripple effects.
* Nonprofits don’t have good data for management, use intuition and anecdote instead.
* Funders want more transparency into the real impact of their investments.
The way to meet these challenges 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 part of a real feedback loop. This risks bureaucratic waste on one side, and hollow self-justification on the other.
Morino’s voice is candid and compelling, and he speaks 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 serve as a gateway into resources that can help nonprofits start Managing to Outcomes, and hopefully do more with less.