Best Practices of Effective Nonprofit Organizations

by Philip Bernstein

A Practitioner's Guide: Introduction

Nonprofit organizations differ greatly in their levels of achievement. The disparities are striking even among those that operate in the same fields, address the same or parallel needs, and share the same goals.

Some advance consistently, year after year, and they increasingly achieve more of their purposes. They obtain greater financial and volunteer support, and attract and retain outstanding professional staffs. They move ahead creatively and dynamically. In contrast, others progress more modestly or just inch forward; some stand still or even retreat.

Few organizations are satisfied with their status of achievements. The nonprofit sector is not complacent. Even the most productive organizations do not rest on their oars. They must know that they are not meeting all the needs, that some of what they do should be done better, and that services that are excellent today may be outmoded in the near future because of advancing knowledge and skills. They constantly appraise their services and results, their strengths and weaknesses, the emerging challenges and opportunities. They press to do more, and to do it better.

They continually ask themselves: Are we making a real difference? In people's lives, in society? Are we making enough of a difference? Can we make a greater difference? How?

Underlying their discontent is their deep commitment to help raise the quality of life, to help build stronger and better societies. They cannot accept the erosion of family life, the neglect and lifelong damage that is inflicted on children, inadequate health care, growing pollution, discrimination against minorities, and barriers to cultural creativity.

The less-productive organizations ask: Why are we accomplishing less than the best groups? What do they do that we don't do? What do they do better? What mistakes do we make?

This ongoing search has been reinforced by pressures on nonprofit organizations that stem from the shrinking role of the federal government in providing human services and making financial grants to nonprofits. The pressures have been mounting for nonprofits to carry greater responsibilities, to operate most effectively, and to manage most efficiently.

Nonprofit organizations vary tremendously in the needs they address, in their services, in their scope and size, and in other ways. They range from small neighborhood associations to international enterprises: they are governed by boards that range from small self-perpetuating bodies of a half-dozen people to those with more that 200 members who are chosen by and accountable to mass constituencies.

Despite their disparities, the most advanced, productive nonprofits across the entire sector share principles, practices and skills that are their hallmarks. The principles and practices are applied creatively and selectively to fit the circumstances of each organization. They are the bedrock of the eminent organizations. They provide the models from which others can learn and forge ahead.

These principles, practices, and skills and how they are applied, drawn from the experience of hundreds of nonprofits across America make up the substance of this book. These principles, practices, and skills are validated by the actions and judgments of preeminent leaders in the nonprofit field, both volunteer and professional. And they have been confirmed by my own experience over several decades as a professional staff member, executive, and consultant, and as a volunteer board and committee member in local, national, and international organizations.

This is a practitioner's manual, an exposition of some of the best of what is already being done and achieved. It is not a theoretical wish list. No organization applies all of these practices optimally, though many strive to.

It is a selected manual. I have not tried to compile an encyclopedia of all successful practices. Rather I have chosen those that often underlie the achievements of productive nonprofit organizations, and that exist in contrast to the mistakes and setbacks of other organizations, problems that could have been avoided if they had done what the leading organizations do.

Following are the selected elements that underlie, in large part, the successes of the leading nonprofit organizations.

Mission

Their defined missions control and focus everything nonprofit organizations do. The mission concentrates their responsibilities, functions, and services. It determines what they include and what they exclude. It establishes the qualifications of who will comprise their constituencies, their volunteer governing board, their professional staffs.

Volunteers and Professionals

An organization's human resources — its volunteers and staff — are pivotal in every aspect of what it is and does. Advanced nonprofits are leaders because of the excellence, deep commitment, and active involvement of their volunteers and the expertise of their professionals. They have defined the respective roles of the volunteers and professionals, so that they can work together in a harmonious productive partnership. These two groups determine their policies, wisely and responsibly administer them, resolve the major issues that confront them, and effectively implement planned activities.

Throughout, there is a close, harmonious partnership of volunteers and professionals. The ablest volunteers insist on having outstanding professional staffs; the staffs make certain that they have the most capable volunteer leaders.

Because people more than anything else determine the quality and success of an organization, the highest priority of the leading organizations is to obtain and retain the best volunteers and professional staffs they can secure.

Finance

Effective organizations employ comprehensive financing, embracing several types of funding from various sources, to make their services possible. They have achieved a solid, stable underpinning of funds, often with consistent growth year after year. The eminence and influence of the volunteer leaders and professional staffs, the respect, confidence, and trust they enjoy, and their own standard-setting contributions are crucial in attracting generous financing.

Their generous gifts bespeak their own deep commitment, and critically influence the level of support from their peers and from foundations, corporations, and government. Their active, thorough, and skilled solicitations of contributions from others transforms potential resources into actual support. Their expert staff support them in planning and obtaining the financing.

Change

Volunteers and staff are constantly alert to emerging new needs and opportunities that may affect their services, finances, management, and administration. Their openness and readiness to review what they do stems not only from their creativity but from the diverse membership of the boards and committees that leading organizations have carefully developed. The differences within the boards and committees compel a continuing assessment of what the organizations are and do. They engender flexibility in responding to changing circumstances and recasting services, and in initiating change and replacing what new needs and knowledge have shown to be outmoded.

Budgeting

Financing is underpinned and shaped by budgeting. Budgeting specifies the needs the organizations address, and the services they will perform to overcome or ameliorate them. The budgets are governed by the organizations' missions and directed to their central purposes and goals. They articulate the priorities the organizations have set as they strive to reach their goals.

Planning

Budgets are based on planning, which assesses the needs organizations seek to meet, the goals they want to achieve, and their priorities. Planning takes account of what progress has been made to date in addressing needs and goals, the prospects for further achievement, and the ability of an organization's staff, volunteers, and finances to have an impact on those prospects.

Nonprofits plan thoroughly before they approve expenditures for new and untried services, to maximize the likelihood of success and minimize the possibility of failure. Budgeting and planning are so interdependent that a number of organizations have combined their planning and budget committees. The committees include major contributors and foremost solicitors, so that their projections carry with them the understanding, agreement, and commitment of those primarily responsible for providing the required funds.

Involvement

The intensive involvement of volunteers in defining missions, in obtaining and retaining the ablest volunteers and staff, in financing, in making essential changes, and in budgeting and planning is part of their pervasive involvement in all elements of an organization's operation — the governance, determination of policies, resolution of major issues, oversight of management and services, and carrying out of decisions. Volunteers are not "rubber stamps" for the views of the CPO (Chief Professional Officer) or CVO (Chief Volunteer Officer). Volunteers genuinely deliberate and develop the organization's decisions and actions.

Facts and Analyses

Financing, planning, budgeting, decision making, and the shaping of all operations are based on the fullest foundation of facts the organizations can obtain. Leaders of effective organizations want to be sure that all participants have a common base of knowledge, to the extent possible, on which to form their judgments. Research to provide facts is indispensable. It need not be an organization's own research; it can be what has been learned by others.

Decision Making

A solid base of facts is required for deliberations, but decisions are not based on facts alone. Decisions are shaped by personal values and goals. In working to resolve differences and arrive at consensus, advanced organizations have found it imperative for volunteers and staff to understand the uniqueness of nonprofits and how they differ from business and government. That understanding is essential for all responsibilities. The lack of it has been the cause of many difficulties in less successful organizations.

Implementation

Implementation of decisions is rooted in how they were arrived at. Involvement of the decision makers is the key, in this as in so many other responsibilities. If it is their decision, if they feel that they "own" it, if the decision reflects their commitment, they actively work to have it financed and carried out.

Difficult, complex, and controversial major issues are often successfully resolved by clearly designed procedures that are skillfully employed. Decisions are usually made by consensus, unifying, and strengthening the organizations rather than permitting issues to fragment them.

Monitoring

They then also insist on having the implementation monitored, to make sure that it carries out what they authorized and projected. Having taken responsibility for the decisions and for financing what was authorized, they want to detect any shortcomings as quickly as possible, to find their causes and to make corrections and adjustments promptly, so that their funds are not wasted and their efforts succeed.

Evaluations

Beyond ongoing monitoring, leading nonprofits increasingly conduct comprehensive evaluations of their services, to determine what impact they have made on the needs and purposes they address. They conduct internal evaluations by their volunteers and staffs, and in some cases bring in expert, outside analysts to appraise what has been done. In addition to evaluations of particular services and fields of operations, a number of organizations made periodic reviews of their entire operations.

They are not deterred by the difficulty that some aspects of their work cannot be measured quantitatively, and that a complexity of many intangible elements must be taken into account. Rather they continuously refine the tools of evaluation to overcome the obstacles, and produce an increasing body of criteria on which to base assessments. They are enabling the organizations to refine and to project their services and operations for the years ahead, guiding changes and priorities in their services and how they administer them.

Communication

Ongoing communication among volunteers; between volunteers and staff members; among staff; and with contributors, constituents, the media, and the public is a must for leading nonprofits. It is a requirement for their internal operations and their external relations.

Each volunteer and staff member is part of a common, shared effort. Communications keeps each informed of what the others are doing and how that will impact their own work. Communication informs them of developments that affect each of them; informs constituents about what an organizations' board and staff are doing on their behalf; reports to contributors on how their funds are being applied to the purposes for which they were donated and what is being accomplished through their support.

Communication builds an understanding in the media and the public of an organization's services and how those services affect the community's human needs and improve the quality of life.

Communication informs government officials about the work of nonprofits and how that work is related to government responsibilities, services, and financing of human needs. Communication alerts government officials to unmet needs and advises them on actions required to address those needs.

Another important aspect of communication is the questions, concerns, and advice that an organization's constituents and contributors bring to its officers, board members, and staff; these observations can help shape an organization's direction, priorities, and services.

Consultations with Individuals

Consultations with individuals are vital in virtually all elements of an advanced organization's procedures, deliberations, and actions. Yet they are often neglected by struggling and less-successful nonprofits. Internal consultations between the CVO and CPO, among the officers, board members, with major contributors, and with leaders of opposing positions on major policies and issues are essential. External consultations with officials of other organizations and government, with key media people, and with influential citizens are equally important.

Consultations are necessary to recruit outstanding volunteers and staff members, undertake changes and innovations in services, obtain financial support, make board and committee meetings productive, achieve consensus on difficult issues, secure the cooperation of other organizations in forming coalitions on shared purposes, gain government approval for desired legislation and regulations, and defeat counterproductive proposals.

Teamwork

Teamwork is a hallmark of leading organizations. In effective organizations, teamwork exists among the volunteers, in the staffs, and between volunteers and staff. Each person readily informs others of what he or she is doing, consults on shared concerns, and meets in groups to learn from each other, pool judgments, and work out next steps. Each person pitches in to help the others handle pressures and emergencies; doors are open, individual turf is not marked out or tenaciously protected; all collaborate, reinforcing one another and adding to the cumulative achievement.

The same attitude and principles motivate relations with other organizations. There is willing cooperation to assist and learn from one another, and to collaborate on joint actions for shared purposes. Such cooperation is rooted in the understanding that everyone is working to overcome critical human problems, that each individual can achieve only a part of that goal, that what each person does affects what the others can accomplish, and that all of them are trying to improve life the community and society.

Relations with government, too, are regarded as a partnership and not a competition. The nonprofits are aware that neither they alone nor government alone can provide all the vital human services, and that government and nonprofit organizations must complement each other's efforts, not duplicate them. They also understand that nonprofit organizations historically have provided the leadership to pioneer advances and stimulate the government to accept and adjust responsibilities to overcome previous neglect and to advance the goals to be accomplished.

Ethics

In everything they do, the nonprofit organizations must be committed to the highest ethical standards. They require honesty and integrity in every element of their operation and deplore the occasional deviations of a few organizations that undermine confidence and trust in the entire sector.

The organizations carry out the services for which they obtained their funds and endeavor to apportion costs of services and administration to assure the utmost effectiveness. No volunteers profit financially from their involvement in the organizations. Nonprofits have set up explicit safeguards against conflicts of interest in any volunteer or staff member. Their finances are audited by certified public accountants. They report openly and regularly on their finances and services.

The organizations seek to serve as models of integrity, to meet the highest requirements of legality, and even more, to satisfy the highest principles of morality. They want and need to earn and maintain the confidence and trust of their constituents and the public, so that their conduct matches the nobility of their goals.