Why Every Nonprofit Needs Operations

By Elizabeth A. Fields: President, Jackson Fields Consulting

Recently, at a nonprofit seminar, I had an experience that sparked an “aha moment” and the idea to launch this Jackson Fields Consulting educational series “Why Every Nonprofit Needs Operations”. The objective of this LinkedIn Nonprofit Series is to clear up common misconceptions and misinformation about effective nonprofit management while offering tips and best practices to help nonprofits build capacity and ensure sustainable growth.?

The experience I had was this: At a quarterly seminar and convening of nonprofit professionals and leaders, one participant inquired about the need for operations in nonprofits. To which a panelist answered unequivocally, without even a second thought: “Operations do not exist in nonprofits.” To my disappointment, all of the participants in this conference, many of whom were well-established nonprofit professionals, fundraisers, and consultants in their own right, agreed and just accepted this pronouncement at face value. “Operations do not exist in nonprofits” is what I heard loud and clear.

As a nonprofit consultant with 20+ years of nonprofit leadership experience working for some of the nation’s premier organizations, I’ve truly seen what works, and what does not work, when it comes to building and scaling a sustainable nonprofit organization. I’ve frequently said that passion is one of the most important qualities for effective nonprofit leadership, but what I’ve also learned is: passion simply is not enough. Along with passion, the most effective nonprofit leaders and social entrepreneurs also need to focus on operations.

Not only do operations exist in nonprofits, they simply must exist.?

Passion is Not Enough

So…why Operations? I’ve noticed a pattern over the years working as a leader for a diverse array of nonprofit organizations, and now as a nonprofit consultant, I see the pattern repeat across many charities that are just starting out. The pattern goes as follows: most nonprofits are created due to a visionary Founder or Executive Director who has harnessed an important quality, and that quality is passion. And not just passion but the ability to effectively communicate that passion to others - to donors, board members, volunteers, staff - and mobilize a team. In some cases, these Founders and Executive Directors can communicate their passion for the nonprofit’s mission so effectively that they are able to start an entire movement around a cause.

Therein lies the rub: I have seen time and time again that after a successful launch of an organization, many nonprofits get to year five, and the organization either succeeds and thrives, or they flatline and stall out. What I’ve found is that the key differentiator between whether an organization makes it or breaks it around that year five mark is the existence, or nonexistence, of one key ingredient: Operations.

What are Operations?

Executive Directors and nonprofit leaders are sometimes intimidated by the term “Operations”. Operations are simply how nonprofits carry out their day-to-day business. It’s the mechanism that gets things moving— it’s what makes a nonprofit an organization, versus just a group of people banded together working disjointly on a cause. Operations are the day-to-day policies, processes, procedures, governance, and oversight that affect everything in the organization: from the programmatic side to HR to fundraising. The existence of Operations is one of the key ingredients that will ensure that an organization not only continues to exist, but scales and thrives, and Operations are what will differentiate the good from the great, sometimes even helping an organization become a household name, like Susan G. Komen for the Cure or NPR.

For each installment of this LinkedIn nonprofit series, I’ll clarify and disambiguate what Operations look like for each main arm of the nonprofit organization: HR, Marketing, Finance, and Development.?This first installment of the series will focus on the vital importance of HR Operations.

Below are four key tips and best practices for HR operations that should be a focus for any nonprofit looking to ensure sustainability or move to the next level of growth.

HR Operations Tip #1: Create Core Values

The first step to creating and fostering a good work culture is the creation of Core Values, which serve as the foundation and the “North Star” of an organization’s culture. Core Values are the root principles and philosophies which form the basis on which the organization and its employees operate: the organization’s “guiding light”.

I’ve seen some nonprofit leaders create excellent core values, but where they fall short is: they don’t live by these values in their leadership and actions, which can engender a lot of distrust and cognitive dissonance with your employees, leading to high turnover and low performance.

Many nonprofits invest a lot of resources in creating an external brand identity — which is vital— but equally important is investing in creating an internal brand identity, including Core Values, as that will ensure the recruitment and retention of quality hires which directly impacts the nonprofit’s bottom line.

The best nonprofits are actually run with the operations model of for-profits, guided by a heart and a conscience. If you look at Fortune 500 companies and companies known for recruiting the best talent, they all clearly communicate their core values externally and internally, like Netflix’s widely-known culture and “real values” document and Google’s “Ten Things We Know to Be True”.

Lastly, communicating your company’s Core Values internally and externally not only will help you attract and retain the best talent, but it will also help your organization attract the right talent: meaning, candidates aligned with your organization’s culture. Jena Bown, a recruiting operations and brand strategist, points out, “You want employees who are like-minded with the values and best practices by which your company wants to be identified. Having a candidate attraction strategy that speaks to your company culture will increase the likeliness of attracting and engaging talent who will thrive and stay with you longer.”

HR Operations Tip #2: Foster a Positive Culture

My second HR Operations tip is to create and grow a positive work culture. In this candidate-driven market, culture has a huge impact on your organization’s performance and sustainability. Recruitment and retention are 100% driven by the quality of your organization’s culture. Hubspot’s Culture Code said it best, “Culture is to recruiting as product is to marketing.”

Culture is difficult to define and a nebulous concept, but generally speaking, company culture refers to the attitudes and behaviors of a company and its employees. According to SHRM, “culture is evident in the way an organization's employees interact with each other, the values they hold, and the decisions they make.” Company culture can encompass a variety of elements, including work environment, company mission, leadership style, values, ethics, expectations, goals, and behavior.

A recent study by Deloitte found that 94% of executives and 88% of employees at what they deemed to be “exceptional organizations” believe a distinct workplace culture is important to business success. Deloitte’s research also found that 83% of executives and 84% of employees at leading companies rank having engaged employees as the top factor that contributes to a company’s success, and engaged employees are a product of good culture. The study also found a correlation between employees who say they are “happy at work” and feel “valued by [their] company” and those who say their organization has a clearly articulated and lived culture.?

The evidence is in: a good culture positively impacts employee performance and the bottom line.?

For nonprofits, workplace culture not only impacts the bottom line, but it can also impact donor relations. Donors of an organization can tell when an internal team is passionate and happy—and when they are not—and I’ve witnessed donors being drawn to supporting a nonprofit when they could feel a strong, positive culture. A good culture is contagious, and you just want to be around it.

In contrast, high turnover is not a good look for any organization, and it is the biggest sign of a poor, or even toxic, workplace culture. At nonprofits, turnover is a bad look not just in the eyes of the talent you’re recruiting and a nonprofit’s donors, but also for the recipients of the organization’s services. I’ve noticed that program recipients and donors often feel like they are a part of a family when they get involved or choose to support a nonprofit, and they want to know that their “family members”, i.e., the nonprofit’s staff, are taken care of.

In the nonprofit sector, where many organizations are doing similar work and you’re competing for donor dollars, you don’t want to be known as the organization with the toxic culture.

HR Operations Tip #3: Offer Remote Work Options

When COVID-19 forced companies and nonprofits all over the world to work remotely and reimagine a strict 9-5 pm “sitting in your chair” work structure, in time, leaders everywhere realized that employees could be extremely productive in a virtual environment—in many cases, even more so than when they were in the office.

Not only did employers everywhere begin to understand that remote work works, but remote work and hybrid environments have become a central component to recruiting top performers, particularly in the younger talent pools, who see it as a factor to assess when weighing a job offer or new career opportunity. Millennials and Generation Z employees — the future of the workforce—have come to expect some degree of a remote or hybrid environment. It all comes down to respect: offering remote work options shows that a leader trusts and respects their employees. It demonstrates that they trust their team to perform and do their work, without a manager standing over their shoulder babysitting them. When employees feel trusted, respected, and seen, they undoubtedly perform better and are more likely to go the extra mile for their employer.

All that being said, I’m a big believer that face time still has a role and a place in the workforce and it is a crucial part of building and growing relationships on your team. We all have a basic human need for in-person interaction and connection, and in-person interaction can help ensure your team is all rowing in the same direction. But it shouldn’t be the only option. If you want to attract the best performers and the most forward-thinking leaders to your organization, consider incorporating a remote work policy into your HR Operations and employee handbook.

HR Operations Tip #4: Standardize and Professionalize a Performance Review Process

In my 20+ years as a nonprofit leader and executive, this is one thing I know for sure: your employees want and need to know what is expected of them. For this reason, standardizing and professionalizing organization-wide performance reviews is one of the most integral parts of HR Operations.

All employees, no matter their position, need attainable goals and an actionable plan for growth. If you don’t standardize goals and performance reviews for your team, your employees will not know how they can reach that next step and grow within the organization.

What’s worse, when you don’t provide your employees with goals through a standardized process where they know how their performance is being assessed and the steps they need to take to advance, that is when you often hear an employee say, “There isn’t room for me to grow here.” Or they question: “What’s my future here?” More often than not, that employee will leave the organization. No one likes sitting in limbo, especially not the most high-performing and driven employees.?What’s unfortunate is that, if their manager had just taken the time to sit down with the employee and put together KPIs that their performance would be measured against and walked them through a growth plan… then that turnover could have been avoided. And turnover is not only bad for your organization’s culture —it’s costly.

By reviewing the performance of your team at regular intervals, your employees will gain a deeper understanding of how their position contributes to the larger goals of the organization. Then they naturally will become more invested in the organization’s success as they will see themselves as a part of it. In the performance review process, it’s important that every employee’s individual KPIs and goals tie into the organization’s annual goals and strategic objectives.?This interconnectedness helps ensure the team doesn’t become siloed. It’s important for say, the fundraiser to know how the achievement of their goals impacts the company’s financial position, or how their KPIs impact the program’s team’s ability to deliver.

A standardized performance review process actually enhances cross-team collaboration, helps ensure retention, and leads to a more engaged, better-performing, and perhaps most importantly: a happy workforce.

Look Out for the Next Installment of the Series: What are Marketing Operations?

Our next installment of the series “Why Every Nonprofit Needs Operations” will explore what Operations look like for another key part of your nonprofit organization: marketing. In the meantime, I hope these four best practices for HR Operations help your nonprofit scale and reach that next level of growth:

1) Create —and live by—Core Values, 2) Foster a positive culture, 3) Offer remote or hybrid work options, and 4) Standardize and professionalize a performance review process.

What all these HR best practices come down to is: creating and sustaining a good culture. Simon Sinek, author of “Start with Why” articulated it best when he said, “Customers will never love a company until the employees love it first.” For nonprofits, I would amend that slightly to say, “Donors will never love your nonprofit until your employees love it first.” Ensure your nonprofit’s Operations reflect that one core principle, and you’ll soon be moving forward to that next level of growth and long-term sustainability.

###

About Elizabeth Fields

Elizabeth Fields is President and Founder of Jackson Fields Consulting, which specializes in nonprofit reorganization and scaling fast-growth organizations.?Prior to Jackson Fields Consulting, Elizabeth served as the Chief Operating Officer at the Gary Sinise Foundation from 2018-2021. Under her leadership, the Gary Sinise Foundation experienced record-breaking year-over-year growth in fundraising, provided meaningful programmatic spend to support our nation’s defenders, retained the coveted 4-Star Rating from Charity Navigator every consecutive year under her leadership, and achieved a program expense ratio that never dipped below 88%.?

Elizabeth has previously served in various executive roles at leading nonprofits and academic institutions, including National Public Radio (NPR), the University of Pennsylvania, University of Chicago’s Booth School of Business, University of Arizona’s Eller College of Management, and Michigan State University.?

Elizabeth earned both her Bachelor of Arts and Master of Arts degrees at the University of Arizona. She also holds an Executive Certificate from the Stanford Graduate School of Business.?