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Out of Our Minds
Tuesday, April 18, 2006 11:00 AM
Nonprofit Ideas for Success
Kevin Salwen on Making a Difference

Nonprofits need to act more like for-profits to be more effective, a new Accenture study shows. That's not hot news in its own right: anyone who works with nonprofit management knows that earned income is critical to take charitable organizations beyond straight fundraising. Funders often expect to see earned income account for a third of the total annual budget. (For the record, I am on the Atlanta Habitat for the Humanity board.)

Accenture's study of 230 heads of nonprofits and their corporate board members shows that the charities struggle in the way you expect: they need to expand and deepen their donor base, retain talent, get great board members, establish benchmarks for the success of services, etc.  But the conclusions that the group drew about how to achieve those things (and more) might surprise you: They include things like better use of information technology, for instance. (Yes, that's what Accenture does, so duh.) But beyond that, there are some interesting ideas, like teaming up with others, better use of volunteers and more rational fundraising. It's worth reading the list by clicking on Read On.

1. Make better use of technology. Despite the fact that information technology (IT) is the backbone of modern enterprises, few respondents indicated that capitalizing on the benefits of IT was a major focus for them. Nonprofits seeking to get the most from their scarce resources should judiciously apply IT to their operations.

2. Overcome inherent limitations in headcount by more effectively organizing and managing volunteers as an extension of paid staff. While a limited number of respondents said that attracting and retaining volunteers was a top priority, the need to augment paid staff with "free" labor and skills was evident in their responses. Specifically, when asked how corporate America/the private sector could play a role in building capacity with the nonprofit sector, 44 percent of respondents indicated shared training, management experience and employee expertise was the most important way they could help, and 31 percent noted the cited as most important the corporate role/responsibility of encouraging employee volunteers and promoting a culture of volunteerism.

3. Explore and adopt new collaborative business models with complementary organizations. In an environment where organizations are pressured to do more with less, executives at nonprofits should work with other organizations and consider joint activities, sharing of resources and even full-fledged mergers.

4. Convince corporate and private-sector donors to fund general operations instead of "signature" or "vanity" programs. While these programs might advance the donor's agenda, they do little to help the organization's day-to-day financial viability. To be successful, nonprofits would benefit from being more aggressive and adept at communicating to donors the value of undesignated gifts and demonstrate how such gifts can have an even greater impact on the organization's ability to carry out its mission than defined programs.

5. Adopt appropriate metrics that enable organizations to evaluate the success and impact of their delivery of services and programs. Nonprofits should have a measure of rigor and discipline in how they deliver their services and the ways in which they measure and evaluate the impact of those services.

6. Engage board members to ensure quality governance structures. Such governance structures not only minimize the risk of malfeasance and abuse, but also help create an effective and efficient operation that can be sustained over time.

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