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Nonprofit Culture: Friend or Foe?

One of our partners recently spoke  with a brilliant, highly successful leader, a woman who recently left her job as a vice president of finance at a major corporation to become the chief financial officer at a medium-sized nonprofit. She was tired of the corporate grind and wanted more meaningful work. But things were quickly going south.

Good grief,” she sighed. “Last night 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 we had with another respected leader, a highly successful nonprofit executive director who also serves as board member for one of the world’s most prominent nonprofits:

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 this: working with all these young people in tech, I was so delighted with the urgency and drive and risk tolerance I saw in them. These qualities are largely missing from so many nonprofits.”

The nonprofit sector is filled with beautiful people and amazing programs. But it seems the majority of nonprofits suffer from cultural drags that constrain their ability to perform and grow. Consider that only a handful of nonprofits 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, nonprofits have the job of tackling some of our most urgent challenges. Poverty. Education. Environmental destruction. Injustice. You name the challenge, and there are good nonprofits hard at work on it.  Together, their efforts strain  millions of people and consume trillions of dollars.

Here is the tough question: how much is the culture of these nonprofits getting in the way?

Let’s look at two opposing sets of cultural values: one associated with low-performing organizations and one that naturally pairs with high-performing teams.

At low-performing organizations:  

  • 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 risk aversion over experimentation and risk.
  • It’s OK to move slowly, slowly, slowly.
  • It’s OK to celebrate success around raising small sums of money, a low return on investment, and transactional fundraising operations that do not scale.
  • And 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 these cultural deficits resonate with the nonprofit sector? While many recognize these problems, most accept it with fatalism. Oh, it’s just a struggling nonprofit. What more can you expect?

But we can do better. Consider a different set of values, the kind associated with leading-edge nonprofits with bold, entrepreneurial leaders and gifted staff. They have people who are working together as a team to tackle the biggest challenges. They have built a culture of high-performance. These organizations are so different from typical nonprofits, we prefer to call the social enterprises. They look like this:

  • They 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.
  • They have a specific plan to pay for it all, with a 5-year financial projection. They focus on the smartest ways to generate revenue so they can recruit and retain top people and grow the organization so it can solve problems, not just nibble at the edges.
  • They are biased toward action, experimentation, and risk – driving forward with a sense of urgency and shared purpose.
  • They are collaborative – everyone works hard and supports each other.
  • They are optimistic, resilient, focused and disciplined. And they act with urgency.  

At Altruist we believe organizations must ask themselves where they sit in this spectrum. All the best tools and strategies won’t help a nonprofit if it has underlying cultural beliefs that make high performance impossible. As the old saying goes, culture eats strategy for breakfast.

There needs to be more discussion of the challenges and opportunities around nonprofit culture – and the time is now.

- Donald Summers
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