The Role Of Nonprofit Boards In Driving Growth

Many nonprofit board directors we come into contact with come from the commercial world—they are often hard-charging leaders who have reached their station by delivering results. Yet, when they join a nonprofit board, there is sometimes a hesitation to push too hard for the kinds of growth that commercial businesses are used to pursuing. There’s often respect for the nonprofit culture, and more of a stewardship vs. growth mentality that comes with these important positions.

Yet, many nonprofits are either shrinking or flat year on year, challenged to replicate pandemic-era growth, struggling to adapt to changing channel mixes and donor behavior, and having both the benefit and struggles of long-tenured teams. It’s here where boards can step in and take a constructive role in bringing their experiences and new perspectives to bear.

One client of ours who is a senior development leader said recently, “I don’t get to have a bad year”. She’s right, her organization’s mission depends on it. This kind of alignment should help nonprofit boards and teams collaborate on putting a growth agenda in place that both respects the skills that the organization has developed and the perspective that the board can bring. The truth is, nonprofit organizations are grappling with the kinds of tectonic changes seen in commercial markets that outside board members can help them power through.

Considerations As You Embark On A Growth Agenda

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Goal Clarity: Most mature nonprofits are conditioned to modest growth each year. This is maybe the biggest challenge you’ll have in implementing an agenda that makes a material difference in your organization’s trajectory. Be reasonable, but be bold—most investors would ask for a 20% yearly growth rate which may seem an impossibility to nonprofit teams but will seem less daunting if you go through the process step by step. So establish a goal that creates discomfort but isn’t an abstract…and coach the team to pursue it.

Donor And Financial Analytics: Most nonprofits measure channel effectiveness but often don’t look at the overall donor picture and growth levers that might lead marketing programs down a different path. We’ve recently done a complete set of analysis on donor opportunity and built a financial model that clearly demonstrates one major strategy should be pursued at the expense of all others. This clarity, born out of a comprehensive set of analysis and models, looks more like a commercial-market project but ultimately provides a roadmap of investments for the organization to follow.

Validate The Path With Pilots And Risk-Protected Budgets: The biggest challenge that nonprofit teams have is that they are rightly conditioned to choose only the most high-performing strategies and tactics that they know will work. This assures the making of the yearly budget, but discourages experimentation and ultimately inhibits growth. Some of our wiser clients set aside a chunk of the budget to test and have modest expectations about ROI. These budgets should encourage reasonable risk-taking and breakout strategies vs incremental tactics.

Capability Building: Each nonprofit has its own philosophy about how much they want to insource or outsource key capabilities, but our view at DEMANDBRIGHT is key capabilities around analytics, predictive modeling, and donor and prospect data need to be the backbone of any high-growth agenda. Virtually all commercial organizations have built these capabilities so they can make the key decisions they need to control their world in the changing world of data, and a new generation of donors wants to be communicated to across channels on a consistent basis.

Change Management And Team Skills: Any change process will be difficult and create tensions for teams. It’s critical to have an ongoing change management process that encourages frank and risk-free discussions and that has a structure that keeps individuals and teams actively making the change vs having change happen to them. It is essential that operational leadership is aligned to the Board’s goal and communicates this alignment though a consistent drumbeat of positive messaging.?If the goal is not consistently reinforced by leadership, the challenge becomes daunting and the tendency is to slip back into the old, comfortable way of working.???Lastly —it’s important to have teams understand that outside commercial-market skills may need to join in order to help drive the long-term change. If done well, the change management process can spell the difference between success and failure.

Ongoing Encouragement And Enablement Of The Growth Agenda: Of course, the Board will have an important role in setting expectations, tracking progress, enabling funding, and helping to guide the effort to a successful outcome for the organization, team, and ultimately the constituents the organization serves.

Our experience is that nonprofits are now dealing with the same kinds of marketing changes that commercial organizations have dealt with over the last 10-15 years. Board Directors have learned these lessons, have navigated through them, and have invaluable perspective as active drivers and enablers of growth. The board’s role can transcend mere stewardship and turn into a positive and productive driver of growth if the right combination of vision, execution and change enablement are put into place.