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Nonprofit Management

Five Investments You Can Skip

The nonprofit sector wastes an insane amount of time implementing best practices that have painfully low return on investment.

It seems like every week a new report is released calling for nonprofits to adopt a practice or increase investment in yet another area of their organization. The list of things a nonprofit must do to be effective is now miles long and ridiculous.

As a leader of one of the largest capacity-building organizations in the country, I want to let you in on a little secret. You can ignore nearly all these findings and best practices.

Nonprofit consultants and the industry’s media are largely to blame for this proliferation of noise. It is not due to bad intentions. It is simply a natural outgrowth of specialization, survival and marketing.

Consultants become specialists (in social media, strategy, governance, and so on)—and they need clients to survive. Unfortunately, some turn to the tried and true marketing formula of: think up a potential “next big thing,” tell a few success stories, share a few supporting trends about adoption, and make the case that if you don’t keep up with the Jones’s and hire them, your nonprofit will get left behind. The media eats it up, the consultant gets speaking gigs at conferences, and pretty soon their practice or idea or approach is accepted as fact. But it isn’t.

Our sector wastes an insane amount of time implementing best practices that have painfully low—if not negative—return on investment (ROI).

Here are five examples:
1) Volunteers. Recruiting and managing volunteers generally isn’t worthwhile unless you use at least 50 per year, they do at least 50 hours of service each (or fewer volunteers and more hours each), and you invest in volunteer management systems. Short of that, it’s almost certainly a waste of time.

2) Websites. Most nonprofits (the small neighborhood ones) would likely be fine with just a Facebook page. A template site would do the trick for slightly larger group. Only 25 percent of nonprofits need customized web design.

3) Board. There is a tremendously high fixed cost to training your board to facilitate donations (in kind or cash). If your board can’t generate a large part of your budget (say, 20 percent), you are likely to find them getting in the way of fundraising success and eating up senior staff time (and increasing burn out). If that’s the case, your organization would likely see more success with a smaller board focused solely on audits and the legal requirements of governance.

4) Social Media. Does it drive your advocacy, fundraising, or program success? It does for likely less than 2 percent of nonprofits. Everyone else is wasting a ton of time and energy on it. Much like my local car wash that urges me to “like” it on Facebook.

5) Strategic planning. You need a strategic plan, but for most organizations it can be a lot lighter than most MBAs want to admit. It doesn’t need to be perfect and frequently should be more of a living document.

My bottom line advice is that you should only invest in things you need to achieve your goals and be very careful of anything that you should do. If you are not positive which category an investment falls into, don’t ask a consultant. Ask your peers about their experience.

Read more stories by Aaron Hurst.

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COMMENTS

  • Skip Winitsky, Taproot Foundation's avatar

    BY Skip Winitsky, Taproot Foundation

    ON October 19, 2011 01:32 PM

    Social Media:  It reminds me of what my mother would say every time I would say “but Johnny has an X” she would reply “And if Johnny jumped off a bridge would you want to do that too?”  (Uh, yeah.). 

    Social media can be a wonderful thing if designed and executed strategically and consistently. It’s hard to imagine any but the most conscientious, diligent, and sophisticated NPO doing that.

    And BBC Radio now directs listeners not to their website but to their Facebook page.  If Facebook is good enough for them . . .

  • Martha Grant's avatar

    BY Martha Grant

    ON October 19, 2011 01:52 PM

    I’m not convinced volunteer programs have a low ROI - volunteers build community, they intrinsically bring groups that otherwise wouldn’t interact into dialogue.  That may not be an impact that’s easily measurable, but it’s valuable.  The same could be said for an active board that doesn’t excel at fundraising.  While most boards do have a primary responsibility (and form which follows that function) of raising dollars, others are formed with collaboration across sectors and providing a guiding vision in mind.  These boards, whether or not they hit a 20% funding mark, still bring value to the table.  How could the sector define ROI to take these intangible outcomes into account?

  • BY Aaron Hurst

    ON October 19, 2011 02:33 PM

    Boards are INSANELY valuable (I sit on the BoardSource board BTW) but we as nonprofit leaders with little time need to determine where we invest.  We need to invest in our boards but investing in them as fundraisers if they aren’t going to do it in a big way is not a great investment.  Invest in them instead as advocates as you suggest.

    My main point is to encourage us all to have the courage to do what we NEED to do and not feel burdened by the SHOULD list that makes us always feel like failures.  Do the strategic few and do them well.

  • BY Jayne Cravens

    ON October 19, 2011 02:58 PM

    I’m stunned to learn that Aaron Hurst doesn’t understand volunteer engagement - why an organization involves such, the myriad of ways an organization involves such, etc. I would have expected better from someone with his credentials - his comments make me call into question all of his advice. His advice regarding volunteer engagement in particular is rooted in the past, where volunteering is just about getting some word done.

    I hope no organization will follow his advice that “Recruiting and managing volunteers generally isn’t worthwhile unless you use at least 50 per year” or that “they do at least 50 hours of service each (or fewer volunteers and more hours each).” What a ridiculous formula, not at all based in reality. Here’s much better advice: Answer the question, “Why does our organization want to involve volunteers, including pro bono consultants” and/or “Why should our organization involve volunteers, including pro bono consultants.” The answer to that question is going to be different for every organization. The answer should center on why some tasks are better done by volunteers than paid employees or paid consultants. That can be everything from board membership to counseling clients to walking dogs - it depends entirely on what the organization is focused on and what it wants out of volunteers. You want to explore beyond, “We don’t have money to pay someone to do such-and-such, therefore, let’s get volunteers to do it.” Maybe you want to involve volunteers to recruit more board members. Or to identify candidates for employment. Or build better ties with the community. Or to be more transparent regarding your operations. Or to be more inclusive in your decision-making. Or to reach potential financial supporters. Or because involving volunteers would actually be an expression of your organization’s mission. Or because, truly, volunteers would be the best people for the job, as opposed to paid employees - for instance, some people in need of crisis counseling prefer to talk to a volunteer, because they perceive that person as wanting to be there versus it just being the job the person is being paid for. For every organization, how many volunteers to invest in, and what roles should be reserved for such, is going to be different.

    The only thing I agree with regarding his advice when it comes to volunteer engagement: the organization needs to invest in a volunteer management system. But that could be a Google spreadsheet, depending on the organization.

    But he doesn’t just get it wrong when it comes to volunteer engagement advice. There’s also this:

    “Only 25 percent of nonprofits need customized web design.”

    I tell nonprofits exactly the opposite. Facebook is a closed garden - you have to be on Facebook to interact with it. It’s the AOL of our time - it’s popular now and should be utilized if those you work with use it, but a web site is absolutely essential and is always timely. It’s what all social networking activities - yesterday MySpace, today Facebook, tomorrow who knows - should point to. I work with so many, many nonprofits that do NOT have constituencies on Facebook - following Mr. Hurst’s advice would, indeed, be a complete waste of time.

    Mr. Hurst needs to get out more - talk with some folks on the front lines, Mr. Hurst. You’ll learn so much. And you obviously have a lot to learn.

  • BY Aaron Hurst, Founder of Taproot Foundation

    ON October 19, 2011 03:51 PM

    Jayne, I do need to get out more.  Never enough.  That is one of the challenges of running a nonprofit (or any organization).  We spend our time too focused on our 1,000 item to do list and forget to do the things that matter (to my point above).

    Having been at the core of the most current research on the effective use of volunteering, however, I have to beg to differ on your assessment of effective volunteer engagement.  Here is the data that outlines how powerful volunteering - when done at scale and with infrastructure.  Something that the is VERY rare in the sector (as the study also shows):
    http://www.reimaginingservice.org/pdfs/PDF04.pdf

    This, of course, doesn’t mean that there are no exceptions.  The point is more - do it and do it right or don’t invest.  Personally, I think EVERY nonprofit should use volunteers they just need to fully embrace them and not do it half assed.

  • BY Alice Korngold, Korngold Consulting

    ON October 19, 2011 05:55 PM

    Aaron, I love this!  I’ve been around long enough to see nonprofit executives jerked around by the latest and greatest new best practice.  It’s a waste of time and money.

    As to strategic planning, the best CEO creates her own by drawing on the input of experts in her field, her team/staff, board members, and business volunteers.  And I agree with Aaron, it’s a living document.  I call it “iterative planning” in my 2005 book, “Leveraging Good Will.”

    Websites are important, but definitely don’t need bells and whistles.  The one most important thing that a website needs to do is communicate the mission – clearly, succinctly and directly. (Unfortunately that’s very rare.  Choose three random nonprofits, check out the mission if you can find it, and tell me what you think.)  The website also needs to show the core programs; some data to show how your organization has made the community/world a better place; the board list; current financial information and 990s; the CEO’s bio; and a link to donate.  A couple of compelling photos are good too.  That doesn’t cost much at all.

    It’s vital to build a board with people who have the will, the might, the know-how, the structure, and the leadership to help the CEO to advance the organization from where it is to where it needs to be – financially and strategically.  Even the best CEO cannot maximize an organization’s potential without a highly effective board.  And a basic “this is the role of the board” consultant won’t get you anywhere.

    Thanks Aaron for a provocative and terrific article!

  • BY Jayne Cravens

    ON October 20, 2011 09:03 AM

    “Personally, I think EVERY nonprofit should use volunteers they just need to fully embrace them and not do it half assed.”

    I don’t use volunteers. I involve them.

    And what you are writing in your comments is *not* what you said in your post. Let me quote you:

    “Recruiting and managing volunteers generally isn’t worthwhile unless you use at least 50 per year, they do at least 50 hours of service each (or fewer volunteers and more hours each)”

    That’s simply not true, and one case study doesn’t change what I’ve seen working with hundreds (thousands?) of organizations and volunteers.

  • BY Jayne Cravens

    ON October 20, 2011 02:38 PM

    Also, fascinating that you referenced the incredibly flawed “Reimagining Service”, the incredibly flawed strategy that equated volunteer engagement with HR management. So many volunteer managers were outraged by that oh-so-out-of-touch strategy, including me: http://blogs.forumer.com/jcravens/44011/Victory!+Volunteer+management+is,+indeed,+something+more+than+HR!!.html

  • BY Peter York, TCC Group

    ON October 22, 2011 04:31 AM

    Aaron, as always, a thought provoking piece! And, I strongly agree with the central tenet of your argument. There’s a lot of peddling of best practices, “innovations,” and the “next, best things,” without the types of filters and vetting that nonprofit leaders should be able to expect and be provided to ensure that what is being proffered can be backed up with substantiated proof of repeatable results. We owe it to nonprofit leaders to ensure data-based proof of success, clear direction and instructions on how to do it, the cost implications, as well as what it will take to get ready.

    Not to put words in your mouth, but on what you appear to be rightly focusing are the theoretical and/or anecdotally/experientially-learned best practices that get widespread distribution, which cost a lot to do, and have no real proof, beyond emotionally compelling case studies. For all we know, unsubstantiated best or innovative practices that get tried without clarity on readiness, capacity and replication instructions, at a minimum might not work, and at worst could cause damage.  There should at least be a modicum of data-based proof, evaluations, research, and/or at least peer-based vetting of claims, before it gets put out to nonprofit leaders as, “you have to do this.”

    It’s important to note that I took away that you were referring much more to field-wide “broadcasted” best practices by field building conduits (publications, speaking forums, etc.), and less so the efforts of consultants and capacity builders who self publish their thinking and approaches for the transparent purpose of running a business. With the latter, there’s no professionally-trusted intermediaries and/or conduits who serve as field validators by way of choosing what gets disseminated.

    Bottom line: If better, more reliable and valid evidence isn’t there yet, shouldn’t we at least put a disclaimer like, “what you are about to read/hear is reflective of the anecdotal (ungeneralizable) experiences of the authors. If you try this on your own, or are asked to do so, there’s no reliable and valid proof, yet, that you will be able to get the same results.”

    There’s nothing wrong with putting ideas out there - just make it transparent as to where these ideas are along the developmental continuum.

    Lastly, taking your point about volunteerism as an example, there’s been research, data and field vetting of findings pertaining to what you are sharing; specifically: 1) the re-imagining service data and research, that you are correctly citing, is absolutely NOT “one case study.” The findings derive from a statistically reliable and valid dataset of hundreds of nonprofits from throughout the country (at the time - now with over 2,500); 2) the other data collected and cited on the re-imagining service website (on corporations, volunteer activities, etc.) also go beyond anecdotes, by virtue of thoughtful and deliberate sampling plans, quantitative and qualitative data collection methodologies and field testing of conclusions. So, factually speaking, the re-imagining service data was gathered and analyzed and vetted with more rigor and objectivity than the unsubstantiated statements of the experiences of one or a few consultants.


    For transparency sake, and forecasting that some may state that I am biased by my role on re-imagining service, I admit the possibility, with respect to my opinion-based conclusions. And, by the way, these are my opinions, not that of re-imagining service. But, the validity of the data and statistical conclusions can be judged objectively; it is available on the re-imagining service website.

    Aaron - apologies for attaching a blog to your blog.  wink

  • BY Jill Friedman Fixler JFFixler Group

    ON October 24, 2011 12:24 PM

    I am glad to see that you have modified your position on volunteers are a waste of time in your response to Jayne Cravens post. 50 seems like an arbitrary number to say that less than 50 is a waste of time. For a small nonprofit, just a few skills based volunteers, when engaged authentically, can make a huge difference. It is not about quantity of volunteers. Instead it is about discerning the skills that volunteers can provide in mission fulfillment,  implementation of strategic initiatives,  and accessing abundance of skills and contacts to actualize some of the organizations dreams beyond what staff alone can accomplish. My colleagues have well outlined the data, including Volunteering in America 2011 that substantiates the remarkable contributions that volunteers make every day. As one who works to engage and embrace the skills, talents and profound circles of influence of today’s pro-bono volunteers, I would hope that you would see the merit for small nonprofits engaging even one or two volunteers meaningfully in their work. I am disappointed in the tone that this blog post conveys. We live in an economic environment where it is no longer possible to hire staff to do all of the work of nonprofits. In order to survive and thrive, nonprofit organizations will have to become very savvy in strategically accessing volunteer talent. This is the new normal for nonprofits and rather than being “a waste of time” it is a key strategy in organizations survival-hood.

  • BY Kelly Kleiman

    ON October 25, 2011 05:32 PM

    I admire the Taproot Foundation enormously—especially its use of volunteers, ahem—so I’m sorry to say that this is an enormously wrong-headed article.  If what you meant was, “Beware of consultants peddling snake-oil one-size-fits-all solutions to your individual problems,” you’re absolutely right; but that’s a far cry from saying that Boards of Directors are a waste of time, or that all volunteers are, or that strategic planning which incorporates input from all relevant constituencies is.  Obviously as a strategic planner and Board consultant I have a professional stake in those activities’ being useful, but if they weren’t I wouldn’t keep doing them (being a lawyer pays better).  There’s no evidence that the “fixed costs” of training a Board are actually sunken costs, that is, expenditures on things that don’t provide any benefit.  On this subject, I suggest you take a look at the response I posted to your article on the Website of Chicago Public Media:


    http://www.wbez.org/blog/onstagebackstage/2011-10-24/praise-having-board-directors-93380

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