Nonprofit Lifecycle Analysis 9-15-12

Nonprofit LifecyclesWhere We Are

and How are We Doing

Center for Child and Family ServicesSeptember 15, 2012

Marion Conway

Marion Conway Consulting 3

Nonprofit Lifecycle Capacity

11/16/07


Nonprofit Lifecycle StagesOverview 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 exist

11/16/07

Lifecycle Stage #1: The IdeaOverview: Perceived community need sparks a founding idea or vision of what could be

CharacteristicsProgram: Programs are not yet defined, only an intense, personal mandate Management: Originators are believable, action-oriented committed people Governance: 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, equipment

Challenges of the Idea StageIdentifying an unmet needDeveloping mission and vision

Lifecycle Stage #2: Start-upOverview: The beginning stage of operations when energy and passion are at their highest, but systems generally lag far behind

CharacteristicsProgram: 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-sourced

Challenges of the Start-Up StageSharing vision & organizational responsibility Hiring versatile staffwith staff, board and constituencies

Knowing when to say no Living within financial means Leveraging sweat equity into outside support

Lifecycle Stage #3: GrowthOverview: Program opps and service demand exceed systems and structural capacities

CharacteristicsProgram: Begins to understand and define the distinctive methods and approach that separate 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 rising compliance demands

Challenges 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

Lifecycle Stage #4: MaturityOverview: Reputation for providing steady, relevant and vital services and operates with a solid organizational foundation and an overall sense of security

CharacteristicsProgram: 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 funding Systems: Administrative systems used for competent management and decision making

Challenges of the Maturity StageKeeping staff motivated around the missionBuilding financial reserves and endowment; Managing working capital Becoming position rather than person dependentMaintaining the programmatic edge

Marion Conway Consulting 911/16/07

Nonprofit Lifecycles

Where are We?

Program Diagnostics


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 job

11/16/07


Nonprofit Lifecycles Where are We?

Program Diagnostics

Growth• Understands what is distinctive about the org• Develops specific service mix, niche/clientele• Becomes less dependent on who developed programs

Mature• 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



Where are We?

Management

Diagnostics



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


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 candidates

11/16/07



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




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 leadership

11/16/07



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

basis

11/16/07




Growth• More sources of income• More complex accounting and compliance reqts• Balance sheets and asset management

Mature• Multiple sources of income• Accurate financial forecasts; less deficit possibility• Can partially self fund new initiatives

11/16/07



Where are We

Systems Diagnostics



Systems Diagnostics

Idea• In kind services may exist

Start-Up• Weak financial and administrative systems • Technology – Unnetworked laptops • Systems may be outsourced

11/16/07



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 exist

11/16/07


Building Nonprofit CapacityTCC Lifecycle Pyramid

11/16/07

ImpactExpansion

InfrastructureDevelopment

Core ProgramDevelopment

Building Nonprofit Capacity TCC Lifecycle Pyramid

Core Program Development

Mission

Organizational Vision

Coherent Program Strategy

Maximize Effectiveness

Focus on the Fundamentals


Infrastructure Development

Systems and Structures

Organization Design

Building Capacity

Evaluation

Focus on Growth and Sustainability


Impact Expansion

Leverage Expertise to Benefit the Field

Share Evaluation

Advocacy

Leadership in Field

Focus on External Influence

Resources for Lifecycle Analysis

Nonprofit LifecyclesStage-Based Wisdom for Nonprofit Capacity

By Susan Kenny Stevens, PhD

Building Nonprofit CapacityA Guide to managing Change Through Organizational Lifecycles

By John Brothers and Anne Sherman

Business

Nonprofit Lifecycle Analysis 9-15-12