Nonprofit Effective Leadership and Management

Nonprofit

Effective Leadership and Management in Nonprofit Organizations

The management of any type of organization is inherently accompanied by a long list of responsibilities, without which the functionality of said organization would be severely compromised. Among these demands are the maintenance of a qualified and dedicated staff, a clarity of mission, a comprehensible and dynamic hierarchical structure and a flexible plan for the achievement of short- and long-range goals. Such characteristics describe the basic ingredients to a viable company, in terms generic enough to apply to nearly any sector. However, such demands take on a higher degree of importance in smaller or less financially secured organizations whose capacity to sustain dramatic errors with resiliency is considerably lesser than its mega-corp. counterparts. Thus, these are qualities which must be central to the institution of a successful non-profit organization. For such organizations, the operational premise that social service is the prime raison d'etre yields a company which has committed itself to two separate ends. That is, where many profitable corporations are only driven to meet the goals of sustainability and growth, a non-profit organization must balance such needs with the advancement of its identifying cause. This is a circumstance which sets non-profit organizations in their own sector, employing a relative de-emphasis on the bottom dollar as it compares to the importance of meeting social service goals. And while the notion of a non-profit organization will have a tendency to elicit admiration and respect from both the public and corporate populous, such organizations still suffer from widespread failure, with only a few examples standing out as historically viable organizations, amid the thousands that are launched each year. This is not for a lack of viability however. The failure of non-profit organizations, either to sustain a viable enterprise or to meet projected social goals can be attributed to a need for great managerial dexterity.

With respect to effective management there is a core necessity for effective long-term planning which responds to the structural inadequacies, internal philosophy and the implications of larger economic circumstances. With proper planning, it may be found that non-profit organizations are not necessarily at a disadvantage in competing for market viability. In many ways, in fact, such organizations are granted luxuries not afforded to profitable organizations. In terms of planning, we find the experienced management is crucial. This is particularly evident given that so many for-profit organizations enter the non-profit game with economic and social interests in mine. Though this a popular divestment for many corporations and estates, the unique idiosyncrasies of running non-profit organizations can be difficult to adapt to. One of the most commonly identified reasons supplied for the failure of companies to find successful diversification in non-profit corporations is their incapacity to foresee through effective planning the differences between their standard operations and this newly entered sector. The Workventures site, which provided a useful primary text for this study, conducted a survey of non-profit organizations in order to identify the reasons for the success and failure of the 24 groups included in its study. One such case study was revealing of this trend. In this case, "Hornsby Challenge's Business Support Centre was set up to contract work in its administrative area and try to offer that to small business. It provided office support, word processing, filing, faxing, etc. For small businesses." The notion is certainly a seemingly viable one, with small business startup assistance appearing as a worthwhile social service. However, "it didn't work at all. The staff didn't have the confidence to do it. They hadn't really sought their jobs to start up a small business. They were admin people." (Bullen, 1) This is illustrative of the dangers which an organization risks encountering by mishandling the organizational need for a staff that is tailored to the task at hand. The non-profit world is legitimately a different sector which requires a savvy familiarity with the philosophies and culture of balancing social services and enterprise viability. And perhaps more concretely, adapting to the non-profit world also demands a networked involvement with other similarly aimed social activist groups. So it is auspicious to begin a non-profit enterprise by bringing on-board staff workers who are versed in the field and who bring with them the industry contacts to make the operation a known entity within its community. This type of organizational orientation also implies one of the central opportunities in terms of organizational development that is unique to this sector. At the very core, for instance, "community enterprises have particular competitive advantages. Often these competitive advantages are linked to the enterprise's social objectives or the support base of the parent organization." (Bullen, 1)

This is to say that social causes don't evolve from a vacuum. Rather, the creation of a non-profit organization is often spawned by either an indication that there may be a wide base of grass-roots support for the cause in question or that an associated benefactor group or individual has expressed an interest in this cause. Thus, where corporations enter into a competitive landscape with effective marketing as the sole means of garnering commercial support, non-profits often enter into existence with a 'product' which already enjoys backing and the social opportunity for organizing around its product.

In order to channel this backing, management of a nonprofit must extend from a strong sense of leadership both from within and in its field.

According to our research, "good nonprofit management does not happen by accident. Good management happens with an ongoing commitment by the board, staff, and community to learn, persevere, implement, and evaluate management practices."(Sanow, 1) This is to say that effective leadership in a nonprofit must both be courted and developed. An organization which is coming into existence or emerging in its marketplace must seek out individuals with experience and credibility in the field, with the interest of channeling their abilities and insights into an effective training and mentoring program for future leaders.

The research demonstrations that a nonprofit organization will benefit from a system of internal advancement whereby leaders are forged amongst those already possessed in the proven training and skill to excel within the peculiarities of the specific field and organization. Therefore, the findings here have tended to endorse ongoing training in the areas of management and leadership from within. According to the research provided by a study which is focused on the establishment of internal Management Training & Development (MTD) programs. The article contends that "programs to develop and improve management skills, typically offered by professional associations, consultants, or business schools, may be viewed as relating mainly to profit-making concerns. This view, however, ignores the nation's largest employment sector -- nonprofits. Clearly, nonprofits have management needs much like the for-profit sector. In fact, recent articles in Business Week ("Profiting from the Nonprofits," March 26, 1990, pp. 66-74) and Harvard Business Review ("What Business Can Learn from Nonprofits," July-August, 1989, pp. 88-93) tout the management virtues of nonprofits such as the Girl Scouts and Red Cross. One reason for the high levels of management skills found in some nonprofits is their attention to MTD." (Cosier & Dalton) this will differentiate the failing nonprofit organization from that possessed in the above-noted areas of planning, organizational orientation and leadership.

Ultimately, this endows members of the organization the on-site training needed to become effective decision-makers. Effective decision-making is a crucial part of working within this sector as for many nonprofits, funding and personnel circumstances may often be in a state of ongoing flux. Today in particular, with the atmosphere hazy for nonprofit sources of finance, decision-making must be based on a constantly shifting forecast. To this point, "the decrease in funding from traditional revenue streams, coupled with intensely competitive markets, have taken their toll and often paint a gloomy picture for many nonprofit organizations. As a result, a number of nonprofit organizations have been forced to close their doors to their constituents or to reduce their program offerings substantially. In order to ensure survival, executive directors/CEOs of nonprofit organizations must exhibit a special brand of leadership by becoming more vigilant, aggressive, creative, entrepreneurial, and willing to accept and embrace change." (Santora et al., 101)

This flux can be harnessed by creating an orientation which revolves on some consistencies. Still, even with respect to the Mission and Vision which are typically espoused by the nonprofit, there are disputes on terminology. In order to qualify for the purposes of this discussion, such organizations must adhere to a few basic features. By mission, an organization must recognize itself as enterprising, generating a revenue which it derives from the production of some goods or services but most also express that its primary purpose for existence must be to provide a social benefit, even if it does so under the auspices of a for-profit parent company. In a general sense, its vision will determine that income originated from an organization classified as non-profit is to then be either dedicated to the social cause in question or invested back into the growth of the organization. Either of these allocations would be in lieu of distributing profits to shareholders.

One of the greatest challenges in attempting to meets its ambitions as a socially conscious organization is the refinement of its ability to tend to the diverse needs of those who might specifically benefit from its services. This may be with respect to racial, ethnic, social, geographical, professional or economic diversity, indicating that in all areas there is a constant imperative to shape procedures according to the needs of manifold groups. As the research here encountered indicates, "no program is ever completely homogeneous. Its clientele usually fall into categories, though one category may predominate at a particular point in time. It is important to know who are your clients and what are their primary characteristics and needs, if you wish to service them properly. You will discover that diverse clientele groups may possess different needs and wants that may be in conflict. The government attempt to meet the needs of small business or the small farmer can be very different from attempts to help the large businessman or large farmer." (Koteen 113) Thus, even if the professional demographic, for instance, has a common feature designating their shared interest in a nonprofit program, said program must be prepared for the potentially vast need-differentials.

Among the various challenges directly related to the orientation of a nonprofit organization, financing is often most difficult. However, with effective management, the nonprofit can actually yield much of its financing from its own activities. It is a fact when initiating a drive for heightened awareness of as yet unproved non-profit groups that "campaigns managed by counsel usually raise more money than campaigns run without counsel. For the most part, counsel-driven campaigns take less time, use leaders more effectively and the total cost (expenses plus fees) is usually less than 10-15% of the funds pledged." (Krueger)

This is a good indication that the absence of experienced and versatile staff members is not simply a liability to the operational habits and daily outlook of an organization. More than that, it represents diminished opportunities for the augmentation of support funds as well. Those who are not already well-schooled in the nature of non-profit fundraising will enter their organizations into the field with a meaningful disadvantage. Indeed, "non-profits compete fiercely for limited financial resources that inhibit both cooperation and collaboration with other institutions. Many feel they own their information and constituents and that creates unique value for their institutions that they must protect. Non-profits do foster trusted source relationships with other non-profits just as for-profits foster co-opetition relationships with other for-profits - but the right incentives must be there for both to occur." (Peizer, 1)

Naturally, an organization which is not suited with the staff to make such determinations may find itself lagging in the department of appropriating seed money. As Peizer goes on to indicate in his review, such is a problem that, when chronic, is an early sign of doom for a non-profit operation. And while there is not necessarily a lack of money available to non-profits, there may be a misconception as to the most optimal ways to go about raising seed money. Due to what is often a fairly widely cast net, given the inherent nature of social service organizations, there is sometimes a perception from within that the most direct means to gaining financial backing is through raised public awareness. This is not, however, the case. In fact, few campaigns are given a financial boon by inundating targets with newspaper ads, editorials, press releases and the like. Such information campaigns are useful in assessing the public's receptiveness to such programs. And this could ultimately be a major contributing factor in helping potential benefactors make a decision. However, non-profits can deal themselves an irrevocable disservice by anticipating that such raised awareness would significantly increased voluntary contributions. Non-profits often fail by declining to acknowledge that "many people, and companies, are committed to making their community a better place by making what is, to many people, an extraordinary gift." This is to say that if an organization does not "ask for a major gift, most prospects will never think to make one... 80% of the funds you raise will come from 20% of your donors. This is true in virtually every successful campaign. Proper training by experienced counsel can ensure that gift levels are at a maximum and the solicitation is conducted properly." (Krueger)

Beyond this, public funding and the relationship to public office have become center to the position and viability of nonprofit groups. Organizations have come to depend on financing arrangements which have been brokered through elected office. To this end, "many nonprofits receive high levels of government funding: Governments at all levels provide about a third of all nonprofit revenues, which amounts to more than $200 billion annually... [and] governments are increasingly using the nonprofit sector -- usually social welfare organizations -- to produce or deliver public goods and services, resulting in a huge wave of public-private contracting." (Brooks, 1) This relationship is in many ways fundamental to ensuring that the social benefits of a program are effectively matched with the intended beneficiaries.

Still, there are risks and conflicts which permeate the discussion over financing for nonprofit. Specifically, "by law, federal funds may not be used for lobbying, but many corporations and nonprofit organizations that receive government grants and contracts also engage in lobbying activities using private funds. The legal tightrope that this creates has been the focus of numerous attempts at policy changes during the past decade. Some of these changes have simply sought better disclosure by recipients of federal monies, but others have been aimed specifically at nonprofit organizations and have attempted to prevent them from lobbying the government on any topic if they receive federal funds." (Leech, 1) This imposes core difficulties in managing finances and presiding over budgetary demands such as those related to proper staffing, which we have identified as a practice of core necessity to effective long-term survival and orientation.