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Delivering on the promise of nonprofits
Jeffrey L. Bradach, Thomas J. Tierney, and Nan Stone, Extracted from Harvard Business Review
December 24, 2008

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Ending violence in inner-city communities, educating disadvantaged children, stemming the loss of rain forests or marine wildlife—U.S. nonprofits are being asked to take on an increasing share of society's most important and difficult work. At the same time, the expectations being placed on these organizations to show results—by their staff members, their boards, and public and private donors— are rising. How are nonprofits responding? By being much more explicit about the results they intend to deliver and the strategies and organizations they'll create to achieve those outcomes.

Consider the following example. Ten years ago, Rheedlen Centers for Children and Families had a $7 million budget and a truly herculean mission: to improve the lives of poor children in America's most devastated communities. It provided New Yorkers with family support networks, a homelessness-prevention program, a senior center, and a host of programs to meet the needs of troubled and impoverished children and teenagers. Among them was the Harlem Children's Zone, a fledgling neighborhood initiative based in a 24-block area in south-central Harlem.

Despite Rheedlen's many good programs, however, the prospects for Harlem's children appeared to be getting worse, not better. For Geoffrey Canada, the nonprofit's longtime CEO, the imperative was clear: To help the greatest possible number of kids lead healthy lives, stay in school, and grow up to become independent, productive adults, Rheedlen would have to step up its performance. So in 2002, it changed its name and sharpened its focus. Now simply called the Harlem Children's Zone (HCZ), the agency linked its original mission to a very concrete statement of the impact it intended to have: namely, that 3,000 children, ages 0 to 18, living in the zone should have demographic and achievement profiles consistent with those found in an average U.S. middle-class community.

With support from the board and major funders, particularly the Edna McConnell Clark Foundation, Canada and his team discontinued or transitioned out of activities that were no longer in line with HCZ's intended impact (such as homelessness-prevention programs outside the zone) and took on new ones (such as a Head Start program and a charter elementary school). They also diversified HCZ's funding, shook up and expanded its management ranks, and invested precious dollars in evaluating results. By 2004, HCZ had more than doubled in scope, encompassing 60 square blocks that housed some 6,500 children. In 2007, the organization added another 37 square blocks— housing 4,000 kids—to the zone. Over the same five-year period, its budget grew from $11.6 million to $50 million. Civic and nonprofit leaders in other cities have expressed interest in replicating HCZ's approach.

HCZ's is not an isolated case. During the past eight years, we have worked with more than 150 nonprofits whose executive directors and boards are committed to increasing their organizations' social impact. We have yet to find one "best way" to do that, and we wouldn't expect to. Every organization faces unique challenges and opportunities, and the decisions its leaders make necessarily reflect those realities. The one constant, however, is a willingness to rigorously confront a few essential, interdependent questions:

  • Which results will we hold ourselves accountable for?
  • How will we achieve them?
  • What will results really cost, and how can we fund them?
  • How do we build the organization we need to deliver results?

Together, these questions create a framework that executive directors can use in candid conversations with stakeholders and in developing pragmatic, specific plans for making a tangible difference, whether that is measured in more high school graduates or in healthier oceans. Although the questions look easy and generic, answering them—and acting on the recommendations—is remarkably hard for many reasons. Ironically, the dynamics driving the nonprofit sector actually undermine its organizations' ability to focus on results, despite the mounting pressure to do just that.

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