Nonprofit Decision-Making: Enhancing Your Organization's Impact at Every Level

Welcome to this installment of the Nonprofit Navigator series, where we explore the critical capacity of decision-making within nonprofit organizations. Every day, nonprofit leaders and board members face decisions that have lasting impacts on their mission, staff, and the communities they serve. Understanding how to harness this capacity effectively is not just strategic—it's essential.

First Look

Decision-making in a nonprofit context is a multifaceted process, balancing mission alignment, stakeholder interests, and resource management. Nonprofit teams that focus on understanding, improving, and applying decision-making practices can learn to strategically amplify their organization's impact.

Definition and Importance

"Decision-making" is defined as the cognitive process of selecting a course of action among several alternatives. In a nonprofit context, this includes making choices about which programs to offer, how to allocate resources, and how to measure success. On a day-to-day level, decision-making might look like choosing between fundraising strategies, determining budget priorities, or deciding on a new board member.

Effective decision-making is crucial for the success of a nonprofit organization. It allows leaders to navigate complex challenges and leverage opportunities to advance their mission. Additionally, it builds trust and accountability within the organization, as well as with external stakeholders such as donors and community partners. Effective decision-making is critical for nonprofits because it directly impacts their ability to achieve their mission and create meaningful change in the communities they serve.

Capacity building in decision-making empowers nonprofit organizations to make informed, strategic choices that propel their missions forward. It involves developing frameworks, tools, and a culture that supports effective and timely decisions, recognizing that empowered decision-making processes can significantly enhance organizational efficiency, program effectiveness, and overall impact.

Challenges and Opportunities

One of the greatest challenges in building the capacity for greater decision-making is that many people believe that decision-making capacity is limited or fixed, or that "I'll know it when I see it." However, research has shown that this capacity can be developed and enhanced through specific practices and approaches, and can be enhanced within every member of an organization.

Nonprofit organizations often face unique challenges in their decision-making processes, such as competing priorities, limited resources, and diverse stakeholder interests. These challenges are an even greater reason why intentional efforts to build decision-making capacity throughout the organization continuously must be made.

A significant opportunity for nonprofits to build their decision-making prowess is in the leveraging of technology in collecting data, facilitating discussions, and reaching consensus more efficiently and transparently. Whether tools as simple as Google Forms or as complex as statistical models are used, this data can be activated to not only make better decisions but also make better decision-making practices.

Key Strategies for Improving Decision-Making

To strengthen your nonprofit's decision-making capacity, consider these strategies:

• Assess Current Needs and Capabilities: Begin by understanding your organization's decision-making processes and where improvements can be made. A great exercise can be to spend a week (or a month) logging key decisions and noting who was involved, who was informed, who was affected, the communication methods used, and the timing of messages and responses. This starting point can help identify trends and spot areas where improvement might be beneficial.
• Develop and Implement a Strategic Plan: Guide your decision-making with a plan that aligns with your mission and organizational goals. If your organization is not already operating with a strategic plan or has one that is inactive, consider looking to make decisions through the lens of the key goalposts within this plan.
• Invest in Staff Training: Equip your team with the skills needed to participate in and contribute to effective decision-making processes. This training may look like an in-person facilitator, an off-site boot camp, or even an online resource such as the Merit? Nonprofit Professional Development system.
• Leverage Technology: Utilize tools and software designed to facilitate streamlined decision-making and information sharing. A shared Google doc, a Lucid decision tree, a brain dump into Chat GPT, or a voting tool can all help bring sense to particularly complex choices. (And don't forget the beauty of using low-tech sticky notes!)

As an individual, there are also opportunities to improve your own decision-making. Consider:

• Seeking Feedback: Solicit feedback from colleagues, mentors, and stakeholders to gain insights into your decision-making style. There are many styles that an individual can take, and gaining perspective on your unique approach can help you deploy your mental energy surrounding key choices more effectively.
• Continuously Learning: Stay updated on best practices and approaches for effective decision-making by attending workshops, conferences, or professional development opportunities. As a nonprofit professional, you'll likely find great benefit from nonprofit-specific solutions, however, don't be afraid to branch out to general business decision-making opportunities.
• Reflecting on Past Decisions: Take time to reflect on previous decisions and identify areas for improvement. As described above, logging a week or a month of decisions can be significantly enlightening as you consider who was involved in the decision, who was affected, the time you took, and the process you went through in weighing out options.
• Developing Emotional Intelligence: Strengthen your emotional intelligence to better understand the motivations and needs of others in decision-making processes. When we harness our emotional intelligence, our decision-making can greatly improve.

Decision-Making Models that Are Great for Nonprofits

• Consensus Model: A decision-making model that involves seeking agreement among all members of the team. This model encourages input from all stakeholders and promotes transparency, collaboration, and buy-in. An example of when the consensus model would be used is when deciding on a new organizational mission statement.

• Command Model: A more traditional hierarchy-based model where decisions are made by a designated leader or executive. This model can be efficient for quick decisions but may not always promote inclusivity or innovation. An example of when the command model would be used is when making a time-sensitive budget decision.

• Participative Model: A model that involves multiple team members in the decision-making process, with each member having an equal say. This model promotes shared responsibility and encourages everyone to have a vested interest in the decision. An example of when the participative model would be used is when determining fundraising strategies for the year.

• Democratic Model: A model that allows for voting and majority rule to determine the decision. This model can be effective in smaller teams and when decisions need to be made quickly, but may not always be representative of all stakeholders' perspectives. An example of when the democratic model of decision-making would be used is when deciding on a new logo design.
• Deliberative Model: A model that involves extensive discussion and debate among team members before a decision is made. This model promotes critical thinking and thorough analysis of options, but can also be time-consuming and may lead to decision fatigue. An example of when the deliberative model would be used is when making a significant organizational change.

Numerous frameworks exist that can help structure your thinking, but all of these fall within one of the models listed above.

Conclusion

Strengthening a nonprofit's decision-making capacity is not just about making the right choices; it's about creating an environment where those decisions can lead to meaningful impact. By assessing your needs, investing in development, and leveraging available tools, your organization can make strides toward more informed and impactful decisions.

Going Further with Nonprofit Decision-Making

The Merit Nonprofit Professional Development system offers a wealth of resources and training opportunities just for nonprofit professionals, including a nine-course series on effective nonprofit decision-making. Learners can enroll for this learning path and pursue their Certificate in Nonprofit Decision-Making or can enroll in the entire Merit? learning experience in pursuit of their Certificate in Nonprofit Capacity Building .

For board members who are ready to take the next step in enhancing their nonprofit's governance abilities, including its decision-making capacity , the Nonprofit Help Center offers comprehensive learning opportunities within the Nonprofit Board Member Basics online course.