Impact Strategies, Inc. Blog

I just heard part of an interview with Seth Godin, management trainer and author, in which he talks about the importance of an artist having 1,000 fans. He explains it this way.

It is one thing for a musical artist to fill a theater with 10,000 fans for a given performance. But that in itself will not sustain the artist for the long haul. What that artist needs to be able to do what he or she loves for a lifetime is “1,000 true fans.” These are people who will not only buy the music and come to a show, but who will spread the word about the artist and share the music with their friends. In fact, Mr. Godin goes on to say that the “1,000 fans” rule applies to any industry. If you believe you cannot sustain your work with only 1,000 fans, he argues, you need to redefine either your work or your industry.

Think about this in the context of nonprofit fund raising. To make it more applicable, let’s lower the number from 1,000 to 100. Now, ask yourself this question: do you have 100 donors whose support for your work is so strong and deep that they are willing to share your story with others?

I have heard numerous fund raising consultants say that the value of a major event is a function of what you do when it is over. So, you had 250 people show up for your golf outing or wine tasting event. And let’s say you netted $10,000. Was the event a success?

The more important question is this: Of the 250 people who attended on this given day, how many of them are “true fans”? In other words, who is likely to support your work throughout the year? Who is likely to spread the word about your organization to others who may be in a position to support you?

The reality is that not everyone who attends your event is a potential true fan. Especially for small, grassroots, niche-driven organization, the lesson of the 1,000 fans is tectonic in magnitude. Rather than broadening the scope of your marketing to “raise awareness” of your organization (on the belief that ‘if more people knew about us, surely they would support us’), your efforts should focus on identifying and engaging your true fans.

To circle back to Mr. Godin’s central point, if you believe that the key to your sustainability as a nonprofit is to have more donors, you need to confront the fact that not everyone is going to care about what you do. Your development and marketing resources are better spent deepening your relationship with those whose actions indicate that they are your most loyal fans, rather than simply trying to fill the arena for a one-night engagement.

The essence of strategy is deciding what not to do.

This idea was presented by Michael Porter in the 1996 Harvard Business Review article titled, “What is Strategy,” and has proven to be prescient in light of the current strain on the core business models of many nonprofits.

Nonprofits have plenty of reasons to say “yes” to a new program or funding opportunity. Among them:

• “There is a need, so we must address it.”
• “Somebody is going to get the grant, so it may as well be us.”
• “The additional funding will allow us to add a staff member.”
• “It fits our mission.”

In other words, “Why not?”

Indeed, why not. My experience working with nonprofits is that overall, boards are pretty good at playing with “what if” scenarios. What if the state were to cut back on its funding for our core program? What if a new, for-profit competitor were to enter our market? What if our program continues to expand and we outgrow our current facility?

What nonprofits are not so good at – perhaps because they are inclined toward optimism and favorable thinking – is the development of “why not” scenarios. Simply put, nonprofits need a process to move toward a strategic “no,” even if there are some legitimate reasons for saying “yes.”

Getting to “no” does not mean playing it safe by talking yourself out of every opportunity. In fact, risk taking might be a core value and a major contributor to past success for your organization. Strategic consideration, however, does require that boards and executives adopt a somewhat contrarian view to balance the prevalent “bigger is better” philosophy guiding many nonprofits.

In addition to fostering greater objectivity, the contrarian view allows a nonprofit to pursue an opportunity with confidence and vigor, knowing that it has survived the gauntlet of considerations and questions through which it must pass. The remainder of this article outlines the considerations that comprise that strategic gauntlet, organized around the three C’s.

The First C: The Organizational Core
The first question in getting to “no” is whether or not the opportunity hits at the core of who you are and what you do. For example:

• Does it fit the vision you have for your organization moving forward?
• Is it a logical extension of your organizational history?
• Is it aligned with the values that have sustained your organization throughout its history?
• Does it fit the organization’s mission?

Ah, the mission. The fact is that most nonprofit mission statements are so broad that virtually any new venture can be justified. However, the consideration of “fit” needs to penetrate below the surface of the words in the mission statement. To assess “fit” with mission, consider the following:

— If your organization provided this program only, to what extent would your mission still be relevant?
— If your organization was known only by this program, would it project the desirable organizational identity?
— Does the program align – logically and practically – with everything else you do?

If the deliberation stalls at this stage, you may be on your way to “no.” If, however, this core consideration is satisfied, you can move with confidence to the next set of questions.

The Second C: Organizational Capacity
The capacity question can seem deceptively simple. There may be little doubt that your organization can “pull this off.” But is your organization able to deliver the program or service better than anyone else in your domain of influence? And, given that capacity (defined primarily as time, expertise and infrastructure) is finite, how will the introduction of this new activity affect what you do currently? Will it draw time, energy and resources away from other activities? Will it create a spillover effect that benefits all that you do by attracting new resources and creating new energy?

The Third C: Competition
The essence of competition is differentiation. Assuming that the program under consideration has passed through the core and capacity filters, your organization is left with perhaps the most difficult question of all: can we make it work in a competitive environment?

Put simply, a nonprofit can differentiate itself from or compete with other providers in one of four ways. You can compete on price, a strategy based on being the “bargain” provider in the field. Or, you can compete on quality, based on the belief that you deliver the program more effectively than others in the field. You can compete based on your niche position, assuming that indeed you are the only game in town. And finally, you can compete on convenience, either by virtue of location or ease of access.

Obviously, this process requires serious discussion and may involve difficult decisions. But whether the process takes you to “no” or “yes,” you can be confident that the outcome is a strategic one.

 The secret to a good golf game is simple: watch the best players in the world, learn what they do, and simply apply those techniques to your own game. That will make you just as good as them, right?

Of course not. There are too many other factors at play to make it that simple: natural athleticism and work ethic to name two. Yet, when nonprofits think about best practices and how to integrate them, they often commit the same fallacy: just do what the successful nonprofit does and we will be just as successful.

The reality is that a practice or program that works in one setting is not guaranteed to deliver the same results in another. As a practitioner of developmental evaluation (an approach championed by Michael Quinn Patton, a guru to many in the field), I find myself cautioning nonprofits against the hyper-optimism that often accompanies the launch of a new initiative, especially one that comes with “proven results.” My caution is rooted not in pessimism but in recognition that program success is a result of numerous factors, the most significant being the quality of local implementation and, more to the point of this article, the context within which the program operates

In simple terms, a best practice is so because of everything else that is going on around it.

  “Why” Before “How”

A nonprofit driven by the plug and play fallacy believes that the most important task in the replication of the program is to learn “how” to do it. I refer to this approach as the learn — apply scenario. For many, it is a cruel lesson learned when program success lags behind expectations. After all, the model was researched, the money was secured, and the program was implemented “by the book.” From there, it was simply a matter of applying the how-to knowledge and waiting for the results to pour in. Unfortunately, when the results are not achieved, too many are left scratching their heads wondering what went wrong or what they could have missed in the application of their learning.

What is missed by so many nonprofits in learn – apply scenario is consideration of why the practice was able to deliver results in its original setting.  To instill this mindset, I introduce a more comprehensive and context-sensitive approach to program planning, which look like this: 

Learn — Interpret — Adapt — Apply

The need to learn about a best practice or program remains essential.  Before deciding to adopt a practice, nonprofits need to delve beyond the executive summaries to understand what was done specifically, to whom, and which practices can be linked to the desired results. There simply is no substitute for this. However, before jumping to the application phase, nonprofits need to detour through the intervening steps of interpretation and adaptation. It is here where context demands the spotlight.

To interpret is to consider the original program context and asks the question ‘why is it working there.’ More specifically, the interpretation phase focuses attention on the conditions under which the program produced its initial success, including the resources – human, financial, and cultural – that were available; the obstacles that had to be overcome; and the synergy resulting from its interaction with other programs, to name a few.

Conversely, to adapt is to consider the best practice within your own context by asking, ‘what will work here.’ The amount of adaptations necessary to fit the program to your context will vary and depends on a number of factors. Key factors include characteristics of the people you plan to serve, the program capacity of the provider organization, the presence of partners, and the trickiest of all, the presence of a culture that supports change and innovation.

Principles Before Practices

The approach I am advocating represents a fundamental shift in our thinking about program replication. Rather than thinking of best practices, which implies mere mimicking of other organizations, sometimes we are better served by thinking in terms of effective principles, which introduces the importance of context and which, eventually, can lead to more effective outcomes as a result.

I saw this at play with a cluster of grantee schools involved in a foundation-invited initiative to enhance parental involvement in low performing schools. Each took its turn describing what it had done and what its results were. The activities were varied – one instituted a parental advisory council, one tagged parent-teacher discussions onto student performance events, and one started sending home a newsletter that focused on home-based literacy enrichment activities. In short, each school had found an approach that worked for them, mostly through a series of trial and error efforts.

The grand mistake would have been for the schools to leave the meeting thinking, ‘we should do that.’ Rather, the more helpful take-aways from the meeting are more general in nature: 1) parental involvement is more likely if parents have a say in how and when they are involved; and 2) new approaches to parental involvement are more likely to take hold if they are integrated into existing structures and practices rather than if they require the creation of something new.

Imagine the creative practices that can be developed by any school based on these two principles. And the good news for golfers is that even if you don’t have the athleticism and work ethic of Tiger Woods, you can still improve your game by remaining balanced over the ball and slowing your tempo — the core principles of an effective golf swing.

Okay, we all get it.  Collaboration is good and nonprofits should be doing more of it.  But exactly what is it that we should be doing more of? 

Many nonprofits share information back on forth, many conduct joint programming, and others participate in co-op arrangements to bring down the costs of purchasing, employee benefits, even cleaning services.  Does this count as collaboration as intended by those singing its praises?  My purpose is to provide a brief introduction so that we can at least have a common vocabulary for describing what we are doing and perhaps should be doing more of.  I recommend the book, Forming Alliances: Working Together to Achieve Mutual Goals as a resource for those interested in the intricacies of alliances in its various forms.   

As is most often the case, simple examples will help clarify the important distinctions.

Scenario #1: A section of the main street that runs through my part of town is closed for the next two months for road improvements.  It is a major inconveniece for everyone, including the fire department, the postal service, and the UPS drivers who use that road on a regular basis.  My assumption is that the street department contacted each of these parties well in advance of the planned closing so that each could make alternative plans.  This is an example of the need for coordination.

Scenario #2: The local school system hosted an open house event for parents and students that included information on each school in the district as well as information on family resources available in the community.  Several agencies were present at the event, including neighborhood youth centers, the literacy alliance, and Head Start.  The presence of these supporting agencies is important to the schools and the families they serve, while the opportunity for exposure is important to the service providers.  In other words, each benefited from the physical presence of the other in the course of doing what they would be doing anyway.  This is an example of cooperation.

Scenario #3: A local sports training facility is preparing to launch a national program designed to bring organized baseball to youth living in the inner city.  Knowing that it does not have the financial, physical, or human resources to pull it off on its own, the facility sought out other organizations whose missions align with some aspect of the program’s goals.  For example, they turned to the Boys and Girls Club as a natural recruiting base for participants.  In exchange, the Boys and Girls Club has reallocated staff time to focus on recruiting new Club members who may be attracted to the new baseball program.  The community transit system — not the city bus system but the one established to provide access to those lacking resources — has committed time and money to transport the youth from the Club to the program site.  And a former major league manager with ties to the community offers an annual baseball clinic at the facility and commits the proceeds from the clinic to the new program.  What makes this arrangement special is that the partners either align or reallocate their own resources to support something that is bigger than themselves and, more to the point, over which they don’t have total control or final authority.  Thus is the essence of collaboration.

In sum, all of these arrangements have their place.  The key is to figure out exactly the nature of relationship needed to advance the main cause, whether it is the coordination of traffic flow or the advancement of a mission that transcends any one organization.