Pros and Cons of Results-Based vs. Traditional Strategic PlanningNeil Sklarew | Centerview, December 2006
Nonprofit organizations are not motivated or driven by the bottom-line, although operating a fiscally responsible organization is critical for long-term sustainability. Thus, the focus of a nonprofit often derives form inspiration of the founder that morphs into programs and its supporting infrastructure. This focus is, by the nature of its evolution, subjective and internally driven. That means it can, over time, become rather insulated from the realities of the community in which it operates.
Strategic planning is a process that helps nonprofits create alignment among the nonprofit organization’s stakeholder needs, its vision and mission, and the organization's internal programs that strive to meet those external stakeholder needs.
The real bottom-line for a nonprofit is to have an impact in the community and on clients for its services. Results-based accountability (RBA) strategic planning is a process that helps a nonprofit focus on the impact it can have on the community and its clients. RBA provides a nonprofit with a focus that starts with the “ends,” the impacts it should have, rather than the “means,” the programs and its delivery system. In this way, a nonprofit can have the same targeted and tangible outcomes for its efforts as a for-profit does with its financial goals.
The real bottom-line for a nonprofit is to have an impact in the community and on clients for its services.
The advantages of RBA over traditional strategic planning processes are as follows:
- An emphasis on stakeholders defining the outcomes they want to ensure relevancy of the nonprofit in the community and for its clients.
- A focus on desired ends, the impacts, versus a focus on the internal organization’s processes and programs, the means, as a starting point; thus, providing the means for the nonprofit's programs and infrastructure to adjust to the needs of the community and its clients.
- The identification of measurable goals that provide a clear and tangible way for the nonprofit to evaluate its performance.
- A process to define exactly who the nonprofit’s clients are.
- An alignment between the community needs and the nonprofit’s services that supports the nonprofit’s relevancy and sustainability in the community.
- A healthy distancing from one’s programs and organization to be able to look at these in the context of community and client need.
- A process to determine whether the nonprofit’s clients are actually better off than before, and whether the nonprofit knows if it has served its clients well.
- An indication of what the most important measures are so that the nonprofit may channel its resources properly.
RBA is not a simple and easy process to employ. It has its challenges and requirements if it is to be implemented successfully. The following are these challenges:
- The process itself can take up to a year to implement, and a few years to see the results.
- It requires involving key external stakeholders in the process where some board and staff may feel they lose some control of the nonprofit’s direction.
- It may be a more quantitative system than nonprofit management is accustomed to and be perceived by some board and staff as not allowing for their own subjective judgment.
- It potentially creates a significant change in the nonprofit’s direction, programs and operations that the nonprofit may not be ready for, or willing to make.
- It is very challenging to get the few key quantitative measures that drive the nonprofit’s efforts while keeping the organization as the focus—even at the expense of other measurements.
To complete an RBA project, your board and staff must be willing to commit significant time and effort.
Neil D. Sklarew is Senior Consultant with GCN’s Nonprofit Consulting Group.