Five reasons nonprofit leaders don't have strategies for social impact
Why would you have a plan to change the world if you don't realize it's your job?
In the coming year, I’m planning on greatly expanding my executive coaching practice, focusing on leaders who want to make better decisions about social impact. This has inspired me to reflect on the content I offer in this space as well.
Since I launched this newsletter, I have mainly shared tactics on the “how” of thinking strategically about social impact. But for a little while, I am going to try shifting focus to the “who” — the types of leaders I have encountered in this work, their most common problems, and how I think they can deal with them. I’d love to know what you think about it.
Let’s start with nonprofit leaders. When you tell people that you work on social change, this is the type of organization that usually comes to mind. In some ways, it is almost impossible to generalize about these organizations. All that really unites them is their tax status. “Nonprofit” includes everyone from gigantic organizations like Feeding America to the local soup kitchen just getting by. It includes museums, hospitals, universities, and philanthropic foundations, as well as groups dedicated to just about any cause under the sun.
However, in my time working with leaders in this category, I’ve found that there are some common patterns that prevent them from fully realizing a strategy for their social impact. By that I mean they can’t articulate a vision of what’s wrong with behavior in the society around them and how to change it. I’m not saying these are the most common management problems of all nonprofits as a category, but I do think that if you encounter an organization that isn’t having the impact it should, their leaders are usually experiencing one of these conditions.
1. The executive director doesn’t understand that defining the group’s social impact strategy is their job.
This is way more common than you would think. You would imagine that the heads of nonprofit organizations would wake up every day asking, “Is society better for the work we are doing? And if not, why not? And what’s my plan to change that?” But unlike the head of a publicly traded company, who will be judged by profit margins or stock price, a nonprofit’s executive director doesn’t have a universally accepted objective metric for positive social change. So most of the time they are usually focused on some sort of proxy like fundraising or feedback from the board of directors.
Many of the leaders I work with are people who have just woken up to this problem. They are doing well by all the metrics they were given for success when they signed up for the job. But they have also realized that the kids are still sick or the temperature is still rising or the books are still being banned. The problem just isn’t getting solved, and no one is talking about how to pivot in response.
I never fault people who have been in their positions for years and are just now coming around to this “big picture” thinking — in most cases, nobody ever asked them to do it. All the other obstacles I’ll discuss are really just variations on that fundamental cause.
2. The leader believes that the organization’s social impact strategy is externally defined.
This is the more sophisticated version of “social impact strategy isn’t my job.” Many executive directors will point to their boards of directors, their mission statements, or their organizations’ founders as sources of strategy. These leaders often portray themselves as stewards of the vision of others. And this isn’t completely wrong — you would be a terrible nonprofit leader if you were constantly in conflict with your board or went around saying that your mission statement isn’t true.
However, this position also severely underestimates the power of the executive director, even in very conservative organizations. It’s as if you said that the president of the United States is really just a steward of the laws that Congress makes and shouldn’t have their own vision for the country. Sure, that sounds like something you might have read in high school civics, but everyone knows it isn’t a sufficient explanation of the power wielded by the commander-in-chief. From personnel decisions to handing emergencies to framing key debates, the executive’s decisions are hugely consequential — whether you’re talking about the White House or your local homeless shelter.
For nonprofit executives in this position, I usually ask something like, “Are there truly no unsolved problems in the work your organization is trying to realize in the world?” Normally everyone will admit that there is still a stakeholder group they just don't understand or a future scenario that keeps them up at night. And there is usually no one on the board on their team who fully understands what they are dealing with, which is why they call me. Maybe every leader isn’t in a position to set a social impact strategy for the whole organization, but most leaders I’ve met are dealing with some problem that requires weighing different possibilities to reach a decision.
3. The executive director views something other than social change as their main job.
There are many types of leaders in the world. Some of the leaders who have inspired me the most in my life will admit that they are not the most creative or the most ambitious, but that they have mastered some less glorified trait like managing software transitions or smoothing out legal disputes. And sometimes people are so good at these tasks that they become leaders of organizations as a result. If your organization was nearly crippled by a lawsuit and others are still looming on the horizon, and you developed the strategy to respond, is it any wonder that they made you executive director?
However, even in the midst of these crises, executives need some idea of “what winning looks like” for their organizations in order to make wise decisions. An organization facing an existential crisis — or even just a revenue slump — may have to scale back to essentials or reconceptualize its operations using new assumptions. All this work requires a vision of what matters most not just during the crisis, but afterwards.
Most people in management have been advised that the skills that got them there won’t determine their success in their new role. They have to develop new competencies like retaining staff or managing conflicts, not just being the best at once particular function. Defining the organization’s strategy for social impact is one of those jobs, but too often leaders are so busy with other problems that they don't get around to discovering it.
4. The organization is in the habit of shaping its strategy around fundraising.
Given the way nonprofits pay the bills, this is very easy to understand. If you were running a business and one market started to dry up, you would pursue new markets. Many nonprofits do the same thing with grants and other sources of funding. Plenty of them have become completely enthralled with the vision — or just the whims — of a single new funder. In the nonprofit space, this manifests as trendy phrases or concepts that suddenly show up everywhere but no one can quite define. It probably all started with an RFP.
I don’t begrudge anyone the pursuit of new funding, particularly when a budgetary crisis is looming. But chasing grants is necessarily a reactive endeavor. To build lasting partnerships, including with funders, executives need to be able to articulate a positive vision for their organization and how they plan to achieve it. Furthermore, without a strategy for social impact, the money spent will never achieve lasting change This should not be acceptable to any nonprofit leader. Once the funders have left the building, every leader should be able to turn to their staff and stakeholders and explain what they are going to do with all that money besides keeping the lights on.
5. The leader uses learning processes or external sources of validation to put off decision-making.
If you have spent any time in the nonprofit world, you know that philanthropic foundations love them some research. In some cases, inquiry by a brilliant staff member or contracted intellectual will even lead to fundamental breakthroughs on a social issue.
But I’m afraid to say that this is the exception to the rule. Instead, many foundations (as well as other kinds of nonprofits) fund research — surveys, focus groups, literature reviews and the like — because it is more comfortable than making decisions that may benefit some groups over others. It’s a safe move that pleases the board and keeps staff busy, but often fails to yield better decisions. Some organizations have even embraced the idea that research or thought-leadership is their primary means of social impact, ignoring the fact that they were never actually designed as intellectual organizations.
This can be hard to hear for groups that have invested heavily in research. Sometimes the executive director was even the lead on this work — see #3 above. When I see I’m in this situation, I advise leaders to let go of the idea that research and strategy are sequential in nature. An organization trying to make the world a better place needs a specific idea of how that is going to happen right now, even if there are unanswered questions about the future. Leaders need to accept that all of our strategies are imperfect and sometimes wrong. But if you put off formulating a strategy until you have perfect information, you’ll never have one.
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Just about every social change leader I’ve met is dealing with one of these problems. Are any of them affecting you? Just reply to this e-mail or comment below and we can talk about it.