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Nonprofit Lifecycle Analysis 9-15-12


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Nonprofit Lifecycle Analysis using two models - Stevens (2002) and Brothers/Sherman (2011)

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Nonprofit Lifecycle Analysis 9-15-12

  1. 1. Nonprofit Lifecycles Where We Are and How are We DoingCenter for Child and Family Services September 15, 2012 Marion Conway
  2. 2. Nonprofit Lifecycle Capacity11/16/07 Marion Conway Consulting 3
  3. 3. Nonprofit Lifecycle Stages Overview Characteristics • Idea Perceived need sparks vision • Start-Up Beginning operations, energy high organization and systems are lagging • Growth Program opportunity and service demand exceed capabilities • Maturity Solid reputation, quality programs, solid organization, overall sense of security • Decline Not client centered, insufficient income • Turnar’nd Decisive action to restore relevance • Terminal Lost its will, reason and energy to exist11/16/07 Marion Conway Consulting 4
  4. 4. Lifecycle Stage #1: The IdeaOverview: Perceived community need sparks a founding idea or vision ofwhat could beCharacteristicsProgram: Programs are not yet defined, only an intense, personal mandateManagement: Originators are believable, action-oriented committed peopleGovernance: No board exists, only supporters with a connection to missionResources: Sweat equity is the usual self-funding device, unless originatorshave deep pockets or an outside angel backs the projectSystems: Generally lacking in systems, may have in-kind services, equipmentChallenges of the Idea StageIdentifying an unmet needDeveloping mission and vision
  5. 5. Lifecycle Stage #2: Start-upOverview: The beginning stage of operations when energy and passion are at theirhighest, but systems generally lag far behindCharacteristicsProgram: Programs are simple, experimental, and have more breadth than depthManagement: Leader is a spark-plug and the most experienced staff personGovernance: Members usually have a personal connection to mission or founderResources: Usually a low-budget operation unless seeded by a major start-up grantSystems: Financial/administrative systems are weak and may be out-sourcedChallenges of the Start-Up StageSharing vision & organizational responsibility Hiring versatile staffwith staff, board and constituencies Knowing when to say noLiving within financial meansLeveraging sweat equity into outside support
  6. 6. Lifecycle Stage #3: GrowthOverview: Program opps and service demand exceed systems and structural capacitiesCharacteristicsProgram: Begins to understand and define the distinctive methods and approach thatseparate its programming from othersManagement: Led by people who see infinite potential for servicesGovernance: Board structure begins to appearResources: More sources of income create accounting and compliance complexitiesSystems: Must now be substantially improved to meet program expansion and risingcompliance demandsChallenges of the Growth StageToo much to do, too little time Identifying distinctive competenceDeveloping board ownership Beginning to formalize org structureCreating program and strategic focus Becoming comfortable with changethat doesn’t trap creativity and vision Diversifying revenues andManaging cash flow
  7. 7. Lifecycle Stage #4: MaturityOverview: Reputation for providing steady, relevant and vital services and operates witha solid organizational foundation and an overall sense of securityCharacteristicsProgram: Well-organized; results focused; and in touch with community needManagement: Executive leadership is often second or third generation from originatorsGovernance: Board sets direction, is policy oriented and leaves management to EDResources: Multiple sources of income; not dependent on one source of fundingSystems: Administrative systems used for competent management and decision makingChallenges of the Maturity StageKeeping staff motivated around the missionBuilding financial reserves and endowment; Managing working capitalBecoming position rather than person dependentMaintaining the programmatic edge
  8. 8. Nonprofit Lifecycles Where are We? Program Diagnostics11/16/07 Marion Conway Consulting 9
  9. 9. Nonprofit Lifecycles Where Are We?Program Diagnostics Idea • Programs not defined Start Up • Simple programs - more breadth than depth • Willing to try anything • Energy -not quality and protocols • Need to learn to say no rather than do a poor job11/16/07 Marion Conway Consulting 10
  10. 10. Nonprofit Lifecycles Where are We? Program DiagnosticsGrowth• Understands what is distinctive about the org• Develops specific service mix, niche/clientele• Becomes less dependent on who developed programsMature• Organized, results focused, responsive to community• Balances favorite programs with community priorities• Resists playing safe; Keeps spark alive with renewal• Has strong programs and continually updates them• Cycles in new programs; replaces ones losing market share 11/16/07 Marion Conway Consulting 11
  11. 11. Nonprofit Lifecycles Where are We? Management Diagnostics11/16/07 Marion Conway Consulting 12
  12. 12. Nonprofit Lifecycles Where Are We?Management Diagnostics Idea • Originators are action oriented, committed • All volunteer operation Start-Up • Leader is a “spark-plug” • Thrive on not knowing what tomorrow will bring • Staff wear multiple hats but organization and roles are in place 11/16/07 Marion Conway Consulting 13
  13. 13. Nonprofit Lifecycles Where are We? Management Diagnostics Growth • Leaders see infinite potential for services • Always something more to be done • 1st need for competitive compensation • Leaders balance opportunity with strategy/focus Mature • Leadership often 2nd/3rd generation • Participates in field development and public policy • ED inspires confidence in Board, staff and community • Strong staff; Able to attract strong candidates11/16/07 Marion Conway Consulting 14
  14. 14. Nonprofit Lifecycles Where are We Governance Diagnostics11/16/07 Marion Conway Consulting 15
  15. 15. Nonprofit Lifecycles Where Are We?Governance Diagnostics Idea • No Board – only supporters of mission Start-Up • Board members all have personal connection to founder(s) • Board generally defers decisions to president, founder or person doing most work • Boards don’t view themselves in a governance role 11/16/07 Marion Conway Consulting 16
  16. 16. Nonprofit Lifecycles Where Are We? Governance Diagnostics Growth • Board members move beyond friends • New recruits expect new level of performance • Board needs to understand risk and make informed decisions • Board structure takes shape Mature • Board sets direction, policy; Does not manage • Board keeps the organization focused and vital • Board organized for continuity of leadership11/16/07 Marion Conway Consulting 17
  17. 17. Nonprofit Lifecycles Where are We Resources Diagnostics11/16/07 Marion Conway Consulting 18
  18. 18. Nonprofit Lifecycles Where Are We? Resources Diagnostics Idea • Sweat equity or deep pockets angel Start-Up • Low budget bootstrap operation • Budget is only financial document • Operation is often cash basis rather than accrual basis11/16/07 Marion Conway Consulting 19
  19. 19. Nonprofit Lifecycles Where Are We? Resources DiagnosticsGrowth• More sources of income• More complex accounting and compliance reqts• Balance sheets and asset managementMature• Multiple sources of income• Accurate financial forecasts; less deficit possibility• Can partially self fund new initiatives11/16/07 Marion Conway Consulting 20
  20. 20. Nonprofit Lifecycles Where are We Systems Diagnostics11/16/07 Marion Conway Consulting 21
  21. 21. Nonprofit Lifecycles Where Are We?Systems DiagnosticsIdea• In kind services may existStart-Up• Weak financial and administrative systems• Technology – Unnetworked laptops• Systems may be outsourced11/16/07 Marion Conway Consulting 22
  22. 22. Nonprofit Lifecycles Where Are We?Systems Diagnostics Growth • Systems and technology need substantial improvement to meet demand for program expansion and compliance Mature • Administrative and technology systems provide sophisticated support for decision making, communication and management • Regular communication mechanisms exist11/16/07 Marion Conway Consulting 23
  23. 23. Building Nonprofit Capacity TCC Lifecycle Pyramid Impact Expansion Infrastructure Development Core Program Development11/16/07 Marion Conway Consulting 24
  24. 24. Building Nonprofit Capacity TCC Lifecycle PyramidCore Program DevelopmentFocus on the MissionFundamentals Organizational Vision Coherent Program Strategy Maximize Effectiveness
  25. 25. Building Nonprofit Capacity TCC Lifecycle PyramidInfrastructure DevelopmentFocus onGrowth and Systems and StructuresSustainability Organization Design Building Capacity Evaluation
  26. 26. Building Nonprofit Capacity TCC Lifecycle PyramidImpact ExpansionFocus on Leverage Expertise toExternal Benefit the FieldInfluence Share Evaluation Advocacy Leadership in Field
  27. 27. Resources for Lifecycle AnalysisNonprofit Lifecycles Stage-Based Wisdom for Nonprofit CapacityBy Susan Kenny Stevens, PhDBuilding Nonprofit Capacity A Guide to managing Change Through Organizational LifecyclesBy John Brothers and Anne Sherman