October 14, 2004 | Read Time: 3 minutes
Although most charities agree on the importance of spending time and money on technology upgrades, long-term planning, and other efforts to help an organization run more efficiently, “donors and boards often underestimate the need for capacity building during hard times,” writes Paul Light, a senior fellow at the Brookings Institution, in Washington, in his new book, Sustaining Nonprofit Performance: The Case for Capacity Building and the Evidence to Support It.
To bolster his argument for such spending, Mr. Light pulls together information on current efforts by charities, including the findings of a new Internet survey of 318 nonprofit organizations with annual revenue of at least $250,000. In that study, each group had engaged in an average of 10 efforts to improve their operations over the last five years.
The survey, which was conducted by Princeton Survey Research Associates, asked participants to answer a series of questions about the management-improvement effort they knew best.
Three-quarters of organizations that said they had sought to make improvements in each of four categories — external relationships, internal structures, leadership, and internal systems — rated their efforts as completely or mostly successful in improving overall performance. Among organizations that had undertaken improvement efforts in two or fewer of the categories, only 48 rated their efforts as completely or mostly successful.
Activities mentioned in the survey included collaboration efforts, technology purchases, programs to help staff members build their skills and work together as a group, board training, adding employees, changing the organization’s structure, strategic planning, publicity activities, program evaluations, and updates to accounting systems.
Gains in Productivity
Among the groups that had the most experience in revamping their operations, 31 percent estimated that their efforts had led to at least a 30-percent gain in productivity; only 11 percent of those with less experience said productivity had improved that much.
One explanation for the findings, says Mr. Light, “is that the more you do by way of improving performance the better you get at it, and the better you get, the more you do.”
He adds, “The practical take-away for nonprofits is don’t give up if it doesn’t work just right the first time. You keep working on it and working on it, and you’re going to get better.”
However, a history of making management changes didn’t necessarily make the process easier. Forty percent of the experienced groups said that their organizational-improvement efforts were very stressful for their staffs, compared with 27 percent of the less-experienced groups.
Over all, 25 percent of survey respondents said that their organizations did a great deal of planning before their improvement effort. Forty-five percent reported that they did a fair amount of planning, and 24 percent reported they did not do much planning.
Personal Assessments
The survey asked respondents how they came to their conclusions about whether such efforts helped. Eleven percent said they based their assessments on formal evaluations and 29 percent said they drew on objective evidence, while 57 percent said they relied on personal assessments.
Mr. Light says his hope is that, as boards and donors know more about what it takes to run effective organizations, they will become more willing to help pay for such efforts. “This survey suggests that investments in capacity building have very real impacts on the mission through productivity gains, through efficiency gains, through greater transparency,” he says. “It’s really a necessity.”
Sustaining Nonprofit Performance costs $44.95 for the hardback edition and $18.95 for paperback. To order, contact the Brookings Institution Press, Brookings Institution, Department 029, Washington, D.C. 20042-0029; (800) 275-1447 or (202) 797-6258; fax (202) 797-2960; bibooks@brookings.edu; http://bookstore.brookings.edu.
