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Management
Information on nonprofit strategic planning, budgeting, investment, and other nonprofit management issues. For a great overview of nonprofit management, enroll in Nonprofit Organizational Effectiveness I and II. You may take these University of Iowa courses online.
Principles & Practices Citation
IV. A. Principle–Strategic Planning
To achieve its mission and vision, a charitable nonprofit organization needs a comprehensive plan which sets forth the organizational goals with specific action steps to be taken by specific individuals.
Organizational success depends on execution of the plan.
Practices
- The board has the responsibility for adopting the strategic plan. The executive director and staff should be actively involved in the planning process with counsel from other organizational constituencies.
- Board and staff often resist planning because of the time and group thought required. However, if there is no group consensus on organizational direction and implementation action, the organization will be dysfunctional. An outside facilitator can help bring issues before the group in a non-threatening way.
Managing a Nonprofit Organization in the 21st Century, by Thomas Wolf and Barbara Carter (1999).
Frequently Asked Questions about Management
How do we evaluate the Executive Director?
One responsibility of the Board of Directors is to evaluate the work of the organization's Executive Director (ED). An evaluation can help improve the confidence, support, growth and working relationship between the Board and the ED. While this review is sometimes avoided or done poorly, it represents an opportunity to identify challenges in program or performance, reward the ED, and strengthen the organization's overall administration. The ED should expect to receive a coherent view of the Board's opinion of his or her work once each year. The evaluation process will be more effective with planning. At a minimum, the evaluation should take the form of a pre-arranged discussion between the ED and the Board Chair. The evaluation should also have a written component.
See Appendix 9 of The Governing Board for Iowa Charitable Nonprofits, 2nd edition, by Willard L. Boyd for more on evaluating the executive director.
How do you use outcome measurement to attract potential funders?
Funders need to see that your programs are valuable in order to give your organization money or other resources. Outcomes are helpful indicators of the value of your organization's programs. By showing potential funders the outcomes you aimed for, the actual outcomes, and the programming changes you made as a result, you give funders a clear idea and greater assurance about how their resources will be spent by your organization.
How do you use outcome measurement to evaluate whether your nonprofit is running effectively?
You can make an outcome measurement plan that has multiple elements. Ask who, what, when, and how for each outcome and the output that is indicative of that outcome. Your data sources, data collection methods, and data analysis will vary depending on your outcome and the indicator of that outcome.
Learn more at The Free Management Library - Outcomes Based Evaluation
How does my organization create a strategic plan?
The strategic planning process consists of four basic elements: critical issues faced by the organization, the organization’s strengths, opportunities available to the organization, and different approaches available to the organization. An organization must identify and prioritize the critical issues it faces. Then, the organization must decide how its operational strengths can be applied towards the resolution of critical issues. Next, the organization should identify available opportunities (e.g., opportunities for facility renovation, fundraising expansion, collaboration, etc.). Finally, the organization must decide upon the approaches that will allow it to take advantage of new opportunities and address critical issues. Three key questions should be repeatedly asked during this process: Are critical issues being addressed? Is this on track with our mission? Is this a financially responsible decision?
Learn more: The Free Management Library: All About Strategic Planning
What are outcomes?
An outcome is the final component of any given program carried out by an organization. When a program’s inputs (resources dedicated to a particular program, including staff), activities (how the program utilizes the inputs) , and outputs (the direct products of the activities) are all taken into account, the result is an outcome— the effect the program had on the participants. After the activity, did the participants increase their skill in a particular area? Was their behavior modified? Did they accept a new perspective or obtain new knowledge? Many times, organizations keep thorough records about inputs, activities, and outputs, but they do not have a complete sense of what happens to participants after they receive their services.
What are the basic management functions within a nonprofit organization?
Generally, four basic functions are included in the definition of management: 1) Planning. Goals must be prioritized, schedules must be created for employees and volunteers, and dates for various events must be set; 2) Organization. This includes the structuring of operations, implementing efficient communication systems, and developing better filing systems; 3) Leadership. Managers should lead by encouraging staff and volunteers and should champion efficient methods that are in line with the organization’s mission; 4) Coordination. Mechanisms for evaluation should be implemented, and information must be exchanged with the community so the organization can efficiently pursue its mission.
Learn more: The Free Management Library: Planning Assessment Checklist
What are the benefits of creating a strategic plan?
The process of creating a strategic plan is almost as valuable as the finished plan itself and offers many benefits to the organization. Three broad characterizations summarize some of the benefits that may be enjoyed by organizations that take the time to create a strategic plan. First, creating a strategic plan promotes strategic thought and action. Critical information will be gathered and acted upon in a more systematic manner. The Board and the staff will be more united in their vision of what is necessary to achieve the organization’s goals, and their individual actions will be more aligned with the broader organizational priorities. Second, the decisionmaking process will be improved. Not only do strategic plans focus attention on critical issues, but the plans provide the Board and the staff with rubrics for dealing with challenging situations. Third, strategic plans promote action. Organizations engaging in strategic planning are more responsive to demands placed upon the organization and more effective in dealing with new challenges.
Learn more: The Free Management Library - Strategic Planning Basics
What is outcomes measurement?
By engaging in outcomes measurement, an organization can better assess the effects its programs are having on people’s lives. The United Way of America’s Outcome Measurement Resource Network defines outcomes measurement as “The regular, systematic tracking of the extent to which program participants experience the benefits or changes intended.” Outcomes Measurement provides an answer to the question, “What is the impact on the recipients of the services we offer?” Outcomes measurement is a tool that can assist an organization in the pursuit of two fundamental goals: improving and refining program services and communicating the organization’s value to the community. Organizations that can make a strong, quantifiable showing that their programs are having a strong impact on people’s lives are, among other things, better able to recruit and retain talented staff, obtain competent volunteers, increase or retain funding, and be leaders in the community. The results of outcomes measurement can help an organization determine where improvement is needed, how budgets should be modified, and how long-range goals should be prioritized.
What is strategic planning?
A strategy is a set of actions that enables an organization to function in an efficient manner in order to carry out its purpose. Strategic planning is a systematic approach to determining what actions will be included in the set. In Strategic Planning for Public and Nonprofit Organizations, John M. Bryson defines the phrase as “a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it.” Strategies can be divided into three categories: organizational, programmatic, and functional. Organizational strategies detail actions that promote organizational growth (community development plans, partnerships with for-profits, board recruitment, etc.). Programmatic strategies focus on actions that that will enhance and manage the organization’s programs and services (developing a program evaluation process, initiating new services, informing the public about offered services, etc.). Functional strategies outline actions geared towards managing and supporting the organizations (e.g., obtaining appropriate technology to keep financial records, developing employee evaluation processes, facility management, etc.). A complete strategic plan includes all three categories.
What is the board of directors' role in outcome measurement?
The board of directors of your organization can decide what outcomes to create. To do this, they must first identify the intended beneficiaries of your organization's programs and what services your programs can provide to them. The members of the board should ask themselves, "what do we want to be true of our program's participants during and after the program?” The answers to this question will be the outcomes that you want. It is helpful to put the answers into written statements with your program's participants as the subjects of the statements. An example of an outcome statement would be, "adults completing [our] literacy program are able to read at the sixth-grade level."
Learn more: United Way Outcome Measurement Resource Network