Four Questions to Determine Whether a Nonprofit’s Ready to Change

Below marks the second part of my interview with Ben Cameron, program director for the arts at Doris Duke Charitable Foundation, about a program administered by Nonprofit Finance Fund and financed by Duke to help arts groups. (Read the first part.)

Through the multiyear “Leading for the Future” project, Nonprofit Finance Fund is directing more than $10-million in capital from the foundation to 10 performing-arts organizations. The goal is to give them the flexibility to test new ideas, explore new business approaches, resist distraction, and even risk failure.

Below, Mr. Cameron shares his thoughts on the lessons he’s learned during the program’s first year. Over the coming days, we’ll post additional questions and answers from him about this program. We hope you’ll contribute your thoughts to the conversation, too.

How do you assess a potential grantee’s readiness to undertake meaningful change? What organizational and financial attributes do you consider important when making a sizable investment in change?

The program we support through Nonprofit Finance Fund began with asking potential grantees four critical questions:

• What is the biggest challenge you face?
• If you had significant resources, how would begin to think about tackling this challenge?
• Tell us about a moment of significant organizational change you’ve undertaken in the past.
• What is the biggest organizational failure you’ve encountered and what did you learn from it?

These questions were designed to show us how deeply a group was attuned to the external environment and the degrees to which it was rigorously self-critical, deeply curious, and risk-positive. These capacities lie at the heart of a group’s ability, we believe, to undertake meaningful change.

Recently, I’ve noticed how a change in leadership has triggered organizational change at many of the most exciting organizations.

As a grant maker, I was trained to greet changes in leadership with a “wait and see” attitude—i.e., don’t begin funding if you haven’t been funding them in the past, but don’t reduce them either in fear of destabilizing them at a critical moment. But I’ve been asking myself recently: Is leadership transition an optimal moment in which to invest significantly in an organization to move innovation forward?

Flexible money to embark in new directions is unbelievably hard to find, particularly if you’re a new leader. We in the grant-making community may want to rethink how risk-adverse we have been in these situations and how we might consider responding differently in the future.