1 Delphi International Program Cyprus Professional Development Study Tour in the Nonprofit Sector...

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Delphi International Program

Cyprus Professional Development Study Tour in the Nonprofit Sector

July 19, 2005

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“Just as a city’s physical infrastructure crumbles over time if it is notmaintained, so it is with nonprofit infrastructure. While the signs of erosion are

rarely dramatic in one year, prolonged neglect will ultimately result in their total breakdown—and the collapse of the programs they operate…”

Joyce Bove and Lawrence Mandell

“…both nonprofit managers and those that fund them must recognize

that excellence in programmatic innovation and implementationare insufficient for nonprofits to achieve lasting results. Great

programs need great organizations behind them.”Venture Philanthropy Partners

“Nonprofits can’t be helped by embracing different reforms as theirpopularity increases or wanes. ‘They must set priorities carefullyand invest their scarce reform energy on a handful of priorities’ “.

Paul Light

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Workshop Agenda

• Introductions• What would you like to get out of this training?• Capacity Building Overview• Capacity Building Assessment Frameworks• Capacity Building General Assessment

Questions• Capacity Building Methodologies• Capacity Building Lessons Learned• Session Debrief• Adjourn

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INTRODUCTIONS

• Your name• The organization you are representing?• Your role with the organization?• Biggest challenge your organization is facing?

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WHAT WOULD YOU LIKE TO GET OUT OF THIS SESSION?

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CAPACITY BUILDING OVERVIEW

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What Is Capacity Building?

The ability of nonprofit organizations to fulfill their missions

in an effective manner.(John S. and James L. Knight

Foundation)

HOW WOULD YOU DEFINE CAPACITY BUILDING?

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Challenges Confronting American NGOs

• Increased demand for services• Increased complexity of client needs• Increased competition for resources• Decreased resource pool proportionate to need

– Impact of economy on private foundation endowments

– Shifting public funding priorities• Myopic nature of foundation and government

funding• Increased pressure to perform (accountability for

outcomes)• Threat of for-profit competition

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9The Four Tides of NGO Reform in the U.S.

• The scientific management model establishes a template of best practices that all nonprofits should adopt

• The war on waste model seeks to improve nonprofit performance through mergers, acquisitions, shared administrative costs, and other techniques borrowed from the corporate sector

• The watchful eye model exposes nonprofit organizations to public scrutiny through disclosure as a tool for discipline

• The liberation management model seeks outcome measurement as the ultimate guide for nonprofits, regardless of how they are configured

Source: Snapshots, The Tides of Nonprofit Management Reform, May 11, No. 11, The Aspen Institute

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What U.S. Nonprofits Need…

• Strengthening of their internal systems• Diversifying their funding bases• Improving their management practices• Incorporating into their operations sophisticated contracting• Marketing and fundraising strategies• Tools to document their impact• Capital funding and loans• Assistance in using technology to implement programs and

activities• They need to learn to lobby to protect programs, services

and missions

Source: Cynthia Gibson, Helping Nonprofits Help Us, Spring 2002, Carnegie Reporter,

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11Seven Elements Of Organizational Capacity

Human Resources

Organiza-tional

structure

Organizational skills

Strategies

Aspirations

Systems and infrastructure

The foundational elements of capacity allow an organization to build/achieve its organizational skills, strategy and mission/vision

The higher-level elements of capacity define the organi-zation’s ultimate purpose and translate that purpose into a concrete set of goals, programs and required skills

Cul

ture

Culture

Culture

Source: Effective Capacity Building In Nonprofit Organizations, Venture Philanthropy Partners & McKinsey & Company, 2001

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Critical Performance Issues:

• Client/Customer Satisfaction – How an organization interacts with its customers/stakeholders

• Economics - How and organization makes financial decisions and the basis for these decisions

• Measurement – How an organizations measures and tracks success

• Planning – How an organization focuses and directs its activities • Process/System Issues – How an organization puts the

infrastructure in place to facilitate its product/service delivery • Professional Development - How and what the organization does

to train its staff to be successful • Strategic Partnering and Alliances - Who an organization

chooses as its partner and why • Workplace Satisfaction – How an organization interacts with its

employees

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Core Capacity Building Methodologies

OutcomesManagement

TeamBuilding

Accountability/Ownership

FinancialMgmt.

HRMgmt.

Mktg./Development

Mgmt.

KnowledgeMgmt.

CommunicationsMgmt.

ChangeMgmt.

Mgmt.Development

StrategicPlanning

DecisionMaking

Structure

BoardDevelopment

Lead

ersh

ipD

evelopmen

t

Mission Effectiveness Mission Effectiveness

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Business Practice Objective Ease of Fit

Strategic Planning Focus High

Change Management Adaptability Medium

Financial Management Profit Low/Medium

Operations Management Productivity Low/Medium

Human Resources Management Performance Medium

Marketing Management Growth Medium

Information Technology Management Efficiency Low/Medium

Knowledge Management Leverage Medium

Government Relations Influence Medium/High

Shareholder (Stakeholder) Relations Investment High

Strategic Partnering Leverage Medium

Applying Business Practice to The NGO Sector

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What are your capacity building needs?

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CAPACITY BUILDING ASSESSMENT FRAMEWORKS

Select Examples

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Organizational Lifecycle Model

EMERGENCE/START-UP

GROWTH

MATURITYDECLINE

DECAY

TIME HORIZON

REEMERGENCE

Strategic Focus: Innovation Adaptation Reaction

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Industry Forces Considerations

Threat of New

Entrants

Power of Buyers

(Clients)

Threat of Substitutes

Power of Suppliers/ Funders?

Rivalry Amongst Existing

Competitors

Are there alternative/different/better ways to solve the problem?

Is the client basegrowing or contractingand what level of subsidyis required ?

Who else is fundingthe issue at what scale and how stable are these revenue streams?

Do other reputable organizations see this as a potential new opportunity?

Is there a scarcity or collaborativementality?

Source: Michael Porter, Harvard Business School (slightly adapted)

How competitive is theCurrent funding environment?

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PROGRAMS/SERVICES

MA

RK

ET

SMarket vs. Program/Service Mindset

Source : Philip Kotler. Kotler on Marketing. Executive Book Summaries. 2000.

Existing Modified New

Existing Deliver more of ourcurrent programs/svcs.to our existing types of customers/clients. (Market Penetration)

Modify our current programs/services and sell more of them to existing customers/clients. (Program/Service Modification )

Design new programs/services that will appeal to existing customers/clients. (New Program/Service Development)

Modified Enter and promote our programs/services in other geographical areas. (Geographical Expansion)

Offer and promote modified programs/services to new geographical markets.

Design new programs/services or prospects in new geographical areas.

New Promote existing programs/services to new types of customers/clients. (Segment Invasion)

Offer and promote modified programs/services to ne w types of customers/clients.

Design new programs/services to promote to new types of customers/clients. (Diversification)

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The Competing Values Framework

Human Relations ModelParticipation, discussion, andopenness as ways to improve

morale and achieve commitment

Open Systems ModelRelates insight, innovation,And adaptation as a path

towards external recognition,Support, acquisition and

growth

Internal Process ModelInternal processes such as

Measurements, documentation,And information management

As methods to achieve stability,Control and continuity.

Rational Goal ModelSeeks profit and

productivity through direction and goals.

Ronald Rojas,“A Review of Models For Measuring Organizational Effectiveness Among For-Profit and Non-profit Organizations.”Nonprofit Management & Leadership, Vol. 11, No.1, Fall 2000

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CAPACITY BUILDING GENERAL ASSESSMENT QUESTIONS

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Seven Key Capacity Building Assessment Questions

1. Which reform agenda seems to be most prevalent in the organizations thinking and how will this affect their capacity needs?

2. Where does the organization fit on the Organizational Lifecycle framework and how will this impact their capacity needs?

3. How are the 5 Forces of its industry affecting the organization and how will this affect their capacity needs?

4. What is the organization’s growth strategy (market or product) and how will this impact their capacity needs?

5. What is the relative size of the organization and how much market discipline does it have?

6. Which values framework is the organization operating under and how will this affect their capacity needs?

7. Where are the major capacity building methodology gaps? Why?

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More DetailedCapacity Assessment Questions

• Accountability: Does the organization hold people accountable for their results? How?

• Adaptability: Is the organization adaptive and able to respond well to changing industry dynamics?

• Asset Leverage: Does the organization do a good job of leveraging the assets it has at its disposal?

• Attitude: Does the organization foster a clear high performance environment?

• Board Effectiveness: Is the board considered a strong organizational asset?

• Collaboration: Does the organization have a track record of collaborating well with other entities?

• Creativity: To what extent does the organization cultivate a creative environment?

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• Crisis Management: What is the organization's track record of dealing with crisis situations? And, are they in a constant sate of crisis?

• Culture for Change: Does the organization historically embrace change or avoid it?

• Entrepreneurial Culture: Does the organization possess an obvious "can do" attitude where things get done despite obstacles?

• Financial Management: How strong is the organization’s current

economic situation? What is its related capacity to absorb risk?

• Human Resource Management: Does the organization effectively understand and implement HR strategies that create a positive work environment for staff?

• Information Technology: Does the organization effectively leverage technology to its benefit?

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• Integrity of Purpose: Is it consistently clear to you and other stakeholders what the organization stands for and how it uses the information to access funding?

• Leadership Vision: Does every staff person you talk to understand the values, vision and direction of the organization?

• Management Talent: Does the organization have a strong base of management talent?

• Marketing/Business Development: Does the organization effectively market its programs and services?

• Market Leadership: Is the organization considered a market leader by its peer group?

• Network of Support: Does the organization have a broad and deep network of supporters?

• Operational Redundancy: Does the organization have the back-up capacity “bench strength” to support key roles and programs?

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• Outcomes Focus: Does the organization effectively manage to business and programmatic outcomes?

• Self Examination: Does the organization have a culture that encourages institutional self-examination? What does it do with this information?

• Strategic Focus and Direction: Does the organization effectively think and act strategically?

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Capacity Building Methodologies

Note: Three examples in this section. Please see full overview document for

more detailed information

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Core Capacity Building Methodologies

OutcomesManagement

TeamBuilding

Accountability/Ownership

FinancialMgmt.

HRMgmt.

Mktg./Development

Mgmt.

KnowledgeMgmt.

CommunicationsMgmt.

ChangeMgmt.

Mgmt.Development

StrategicPlanning

DecisionMaking

Structure

BoardDevelopment

Lead

ersh

ipD

evelopmen

t

Mission Effectiveness Mission Effectiveness

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29Capacity Building Methodology Example:Strategic Planning Discussion

Initial Thoughts:• Strategic planning is an area where many non-profits have

experience, but their efforts are often fraught with a “what could be” rather than a “what is” mentality.” There is nothing wrong with lofty ambitions and goals, but they must fit the reality of the organization’s situation.

• It is less important that the document is a good read, then that it has clear, concise goals and objectives that are attainable and consistent with the organization’s vision and mission.

• Moreover, many plans don’t spend enough time on measurement or accountability and ignore the workplace ramifications of their planning efforts.

• We recommend the Drucker Non Profit Self- Assessment Tool, SWOT Analysis and Balanced Scorecard methodology to help inform strategic Planning efforts.

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30Capacity Building Methodology Example:Strategic Planning Discussion

Assessment Questions:1) Why does the organization exist? What is it’s core purpose? 2) What are the core organizational values? 3) What does the organization hope to accomplish in both the short and long

term? 4) Who are the primary customers and what do they value? And, how good

is the organization at delivering value to its primary customers?5) How can the organization do a better job of delivering value to its

customer? 6) What are the internal organizational dynamics and how can they be

leveraged to the organization’s benefit? 7) What are the external market dynamics and how can they be leveraged to

the organizations benefit? 8) What are the organization’s measures of success? 9) How does the organization ensure it is aligned behind its success

measures? 10) Who owns the planning goals and objectives and how are they held

accountable? 11) Do we have the right human capital in place to execute our plan?

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31Capacity Building Methodology Example:Board Development Discussion

Initial Thoughts:• Board development begins with the setting appropriate

expectations between the Board and the Leader (Executive Director).

• Besides obvious governance issues, it is important the Executive Director (ED) and board members are clear about their relationship. In some cases, the board may play a critical fundraising role. In others, it may be more mission oversight or management focused. Whatever the objective, it is critical that everyone involved with the relationship is very clear about these objectives and the board functions accordingly.

• Moreover, two-way accountability measures need to be developed between the ED and board so that performance expectations are clear.

• Lastly, one obvious lever that exists to increase board performance is recruitment; selecting the right membership is critical. Make sure the talent of the board is a good fit for what the organization needs.

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Assessment Questions:1) Besides governance, what is the needed role of the Board relative to the

organization?2) What is the role of the Board Chair? How is this person functioning in that

role?3) What is the Board committee structure? Are they effective?4) What are the agreed upon expectations of the Board? 5) How are the Chair and committees held accountable for board performance? 6) What is the responsibility of the ED to the Board? How is this relationship

working?7) What issues does the Board address effectively and where does it run into

difficulty? 8) How does the Board hold the ED accountable? 9) How does the Board hold itself accountable?10) What skills/talents are lacking on the Board? 11) How can we bridge any talent/skills gaps? 12) How effective are Board meetings and what could be improved?

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33Capacity Building Methodology Example:Communication

Initial Thoughts:a) When diagnosing organizational barriers to success the

tendency is to look at functional support issues or programmatic miscalculations. However, once the consultant or in-house team begins delving into the issue, they often uncover communications as the number one issue.

b) It is not uncommon to hear from both leadership and management that the “staff isn’t on the same page” or “our programs operate as silos with very little understanding of what happens in other parts of the organization.”

c) More often than not, this isn’t an intentional occurrence, but something that has evolved over time as the organization gets caught up in execution or growth issues.

d) Clarity is everything!

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Assessment Questions:1) Is everyone in our organization on the same page in terms of our mission

and vision objectives? 2) How would the average employee define success for the organization? 3) How do we communicate major decisions that affect the organization? 4) How often do we meet or interact as an organization to discuss these

issues? 5) Who owns the internal communication process? And, how are they

performing?6) Do the leaders of the organization consider effective communication to be a

critical element of their responsibilities? 7) Do we use multiple communication levers to get our point across? 8) What effort do we put forth to encourage two-way communications with

staff? 9) At what level do we gear/focus our communications messaging? 10) How do we accommodate the various message needs of different audiences

including the board, funders and our clients? 11) Who are the informal communication hubs within the organization and how

do we leverage their status in this regard?

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CAPACITY BUILDING LESSONS LEARNED

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Lessons Learned from The Field

• It all starts with the leader – actions speak louder than words

• Don’t try to do too much at once – prioritize, Prioritize, PRIORITIZE

• Commit to capacity building as your modus operandi not just a singular event – performance improvement should be an on-going journey not just a destination

• Too much “deficit” thinking (finding out what’s broken) can be exhausting – try to also build on strengths

• Ensure that staff feel they have a voice in the process – buy-in is critical to success

• What gets measured, gets done!

• Get the right people and put them in the right slots – it only takes a small number of people to hinder progress (fire fast-hire slow)

• Celebrate your successes – positive momentum is infectious

• Capacity building time and money is an investment, not an expense – high performing organizations don’t just get that way

• Communicate, communicate, communicate – clarity is everything

• Vett your consultant(s) carefully – look for a track record of success

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37Lessons Learned from Capacity Building Funders

• Follow other’s promising practices• Do no harm• Develop clear expectations regarding confidentiality and

communication• Build on nonprofit’s strengths• Remember that one size does not fit all• Be patient and flexible• Coordinate efforts with other funders• Hold your organization to the same standards you expect of

others• Keep the focus on mission

Source: Connolly and Lukas, Strengthening Nonprofit Performance: A Funders Guide To Capacity Building,Wilder Publishing, 2002

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38Core Components of An Effective Foundation Capacity Building Initiative

• Comprehensive - strive for one stop shopping• Customized – service must be custom tailored to the need of the recipient

client• Competence Based – providers must have requisite skills to do the work

and both funders and grantees must be knowledgeable consumers• Timely – funding shouldn’t be too slow to be relevant or too quick to allow

the appropriate context and preparation. Moreover, the duration of funding is an important issue.

• Peer-connected – it’s important to build in peer to peer networking, mentoring and information sharing

• Assessment-Based – spend the time up front properly scoping the intervention and have accountability measures built into the process

• Readiness-Based – grantees must be intervention ready and to fully leverage the benefits of the engagement

• Contextualized – assistance should be applied in a vacuum and it should fit reasonably well with other initiatives already underway

Source: Thomas Backer, Strengthening Nonprofits: Foundation Initiatives for Nonprofit Organizations, The Urban Institute, April 2001

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SESSION WRAP-UP

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Session Wrap-Up

What Did We Learn Today?

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What can we do with this knowledge?

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“He/She is the best leader who most fully understandsthe nature of things, so that his/her plans are not

doomed to ultimate failure; who possesses an active,far-ranging imagination which can see many possibilities;who has a sense of values, so that among possibilities

he/she is able to choose the most excellent;who has a sense of order, to give form, design and

program to the values and purposes he/she selects; whohas practical sense and judgment, and so uses the

most feasible means to accomplish his/her ends; andwho has the energy and enthusiasm to carry his/her

plans persistently toward fruition.”

--- Arthur E. Morgan

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Ed RobinsonPresident

Capacity Building Solutions Inc./TEC Chair Group #663

301/[email protected]

http://www.capacity-building.com

1 Delphi International Program Cyprus Professional Development Study Tour in the Nonprofit Sector...

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