Improving Organizational Effectiveness
During the past few years, there has been heightened emphasis on the concept of nonprofit capacity building --the increase of investment in organization and management.
Although one commonly accepted benchmark for improved performance has always been fundraising, Mike Hudson points out in his book Managing at the Leading Edge that greater funding in itself is not enough and that organizations must raise the bar on quality in order to achieve a greater impact. This can be especially difficult for advocacy organizations, which often are focused on rapidly changing external agendas and are staffed by people passionately committed to the cause.
To attain this enhanced impact, Hudson offers a fresh new paradigm for organizational effectiveness that has emerged from a variety of conversations and observations in the nonprofit sector.
The key characteristics of this new paradigm are:
- Making continuous strategic investments in the development of the organization itself, its people, and its relationships to give it the power to have greater impact.
- Charging the full cost of programs to funders and being comfortable about making surpluses.
- Using unrestricted income and foundation grants to invest in the capacity of the organization itself.
- Using unrestricted income to subsidize services only when there is a compelling case and a demonstrable connection with the organization's strategic priorities.
Source: "Improving organizational effectiveness." Nonprofit Times Weekly. Monday, November 21, 2005.
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