Beware the Perfectly Average Nonprofit

(Illustration by iStock/Suppachok Nuthep)

“Eat here! We’re perfectly average!” Does that sound like a winning slogan for success in the restaurant business?

Of course, not—and it’s a loser for social impact, too. So, why is so much nonprofit capacity building grounded in the elimination of weaknesses to achieve average performance?

Consider a typical capacity-building scenario: A nonprofit seeks to strengthen its organization, or perhaps a funder asks the nonprofit to do so. Staff and maybe external stakeholders fill out one of dozens of tools available to help nonprofits identify capacity needs, many of which ask respondents to rate the organization’s performance on a list of standard capacities. Decision-makers examine the results, focusing on low scores (“I guess we don’t utilize our board well” or “clearly we need to improve on impact measurement”), and then hire consultants to help plug those gaps (implementing board “best practices” or identifying metrics). Two years later, those weaknesses are no longer so glaring, but there hasn’t been a steep change in impact. The cycle repeats year after year, sprinkling resources across many needs and making incremental improvements at best.

We know that nonprofits need exceptional ingenuity and operational prowess to address entrenched social problems with limited resources. And with over 1.5 million nonprofits in the United States alone, it is challenging for those seeking growth funding to stand out. Yet by encouraging a focus on gaps, capacity-building funding often implicitly pushes organizations to pursue a just-good-enough standard in which weaknesses won’t get in the way of their mission, even though being decent across the board is insufficient to change the world.

Strengths-Based Capacity Building

A strengths-based or assets-based approach to capacity building instead starts from the premise that every organization has core strengths on which it can build. Rather than focusing only on remedying weaknesses, which researchers suggest doesn’t work well, individuals and organizations can leverage their strengths to achieve success and address performance gaps. From topics such as child well-being to performance feedback to community development, a strengths-based approach is increasingly understood as a best practice to help individuals and organizations develop. 

Of course, some capacities are universally indispensable, especially in new organizations. It’s crucial to have a fundamentally sound core program and team, and organizations must account for how they use funds. Once basics like these are in place, though, nonprofits often can grow their impact most effectively not through incremental improvements to weak spots but by delivering distinctive value to their stakeholders and partners. This doesn’t mean ignoring the weaknesses, but it does suggest reframing how organizations scope capacity-building efforts and seek to fill gaps.

Consider, for instance, two tools developed for use in capacity building. Each lists dozens of standards on which respondents rate their organizations on a 1 to 4 or 1 to 5 scale. For most organizations, the natural inclination may be to focus on capacities that receive a 1 or 2 while assuming that capacities scored as 4 or 5 can continue as they are.

We agree that getting to a basic rating of at least 2 or 3 out of 5 is generally important. But getting from basic to moderate on many capacities that are peripheral to the organization’s mission and operations may generate less impact than going from strong to off-the-charts for core skills. And organizations can use their off-the-chart strengths to bolster their weaknesses in ways that best fit their needs.

Core strengths will vary across organizations. To identify them, nonprofits can ask themselves and their stakeholders a few simple questions:

• What do we do best? On what does our impact depend? Why do clients, donors, and others come to us rather than other organizations like us?
• How can we put those strengths to best use, and what would enable us to do so more often?
• How can we use capacity building to help make those changes while addressing organizational needs?

Over the last year, we worked with the Communities Thrive Challenge (CTC) to experiment with this approach. CTC is a collaboration between the Chan Zuckerberg Initiative and the Rockefeller Foundation to scale locally developed approaches to improving economic opportunity for low-income and financially insecure people. Ten nonprofits, out of more than 1,800 applicants, received general operating support and capacity-building funds from CTC. Among those organizations are The Industrial Commons (TIC), based in Morganton, North Carolina, and Benefits Data Trust (BDT), based in Philadelphia. TIC develops interconnected enterprises that solve industrial problems for businesses and workers. BDT uses data, targeted outreach, policy change, and new technologies to connect people to benefits and services.

Both nonprofits illustrate how organizations can implement and benefit from strengths-based capacity building using the three questions above.

Know What You Do Best

Despite differences in age, size, location, and model, TIC and BDT used their CTC capacity-building funds to build on unique strengths. As a first step, each took time to get clear on those strengths while also identifying gaps to fill.  

TIC used a structured self-assessment and accompanying internal discussions to craft a shared picture of the organization’s strengths and capacity-building priorities. The exercise quickly revealed a consensus view that leadership by frontline workers—those who work inside the enterprises that TIC supports—is the key strength on which TIC’s impact rests. Frontline workers, organized into groups of eight to 10 people known as "Worker Committees," have long led much of TIC’s day-to-day organizing, enterprise development, and advocacy. It's a fitting approach, as the organization’s theory of change relies not only on economic development but also on worker power and worker ownership to build and maintain wealth rooted in local communities. Conversely, TIC staff identified impact measurement as a gap.

The BDT team members, through internal discussions, a structured self-assessment, and ongoing communication with clients, saw the organization’s ability to provide a tailored client experience facilitated by its technology-based platform as a core strength because it enabled BDT to serve a range of needs while maintaining personalized assistance for clients. At the same time, BDT’s tailoring to varied situations resulted in disparate features that missed opportunities to reinforce each other. As a result, BDT saw a need to clarify, consolidate, and align its platform development efforts to capitalize on synergies between features and maximize each feature’s potential.

With this information in hand, TIC and BDT began crafting capacity-building efforts for increasing impact that leveraged their strengths to address the gaps.

Set Yourself Up to Use Your Strengths

Once your organization has a clear picture of its strengths, the next step is to consider how to enable yourself to soar with that strength. As organizational psychologist Laura Morgan Roberts, who led the development of the strengths-based Reflected Best Self Exercise, puts it, “What kinds of changes do I need to make so that I can be at my best more often?”

TIC, for instance, sought to build on its strength of worker leadership by bringing the worker-leaders, along with their associated employers, more fully into the high-level strategic decision-making of the organization. Frontline workers have led much of TIC’s day-to-day activities, and ensuring they also shaped the longer-term priorities would help further the organization’s vision of wealth rooted in local communities and meaningful employment while allowing it to deploy that strength of worker leadership more frequently.

To answer Roberts’ question, BDT saw a need to change its organizational structure and working style to improve coordination among its teams. Doing so would help staff members to avoid innovating in a silo and ensure their work integrates with that of other teams earlier in a project cycle. This refined approach would free up teams’ creativity and reduce the time spent trying to resolve overlaps and conflicts between the work of different parts of the organization.

With those plans in place, TIC and BDT then used their capacity-building work to address their needs and advance their missions.

Use Capacity Building to Unleash Your Strengths While Addressing Needs

A typical capacity-building approach to improving impact measurement might have led TIC to use cut-and-dry metrics planning: Bring in a technical expert to help develop key performance indicators, then ask staff and partners to collect necessary data. The result might be useful data. But the process could also undermine TIC’s strength if it was perceived as a top-down, technocratic undertaking that was delivered to its constituents rather than developed with them—an approach that would be inconsistent with TIC’s focus on worker leadership.

Instead, the team saw an opportunity to involve workers, businesses, and the community even more deeply in shaping the organization. Recognizing the importance of including expertise on what has made frontline worker leadership successful across a range of cases, TIC engaged North Carolina State University sociologist Michael Schwalbe as a capacity-building provider. Schwalbe and TIC worked with Worker Committees to develop a sociologically rigorous, worker-led approach to document the elements of the committees’ activities that are most effective in advancing worker voice and wealth. Worker Committees collaborate with TIC staff and employers on ways to use this information to improve their efforts and TIC’s strategy. Rather than homing in on its weaknesses, TIC expanded its opportunities to use its strength of worker engagement while addressing the need for impact measurement.

For BDT, a standard capacity-building approach might have focused on clarifying near-term priorities and an organizational structure to tackle them. Yet BDT worried this would leave the organization lacking the flexibility it needed to maintain the responsiveness and customizability of its platform in the face of changing client needs. A deficits-focused capacity building effort to clarify organizational design thus might remedy a weakness (insufficient communication between teams) while weakening a core strength (nimble product development).

For strengths-based help, BDT looked to the startup world and worked with digital-product design studio Big Human. Together they developed a guide and working norms for flexible team structures drawing from across the organization that could quickly reconfigure themselves as priorities changed. This “product playbook” approach makes the flexibility and customizability of BDT's technology platform even more effective, rather than undermining those strengths with a more traditional and inflexible organizational structure.

Organizations Change the World With Superpowers, Not Cultivated Mediocrity

The world needs nonprofits with unique skills to make headway on issues where society is stuck. We all have room for improvement, and concerted action to remedy our weaknesses is admirable. However, mitigating weaknesses is not enough to create the uniquely effective nonprofits that we need.

Put simply, as strengths-based evangelist Marcus Buckingham says, “You don’t remediate your way to excellence.”

Organizations need to understand what makes them most effective and ensure they’re dedicating time and resources to developing those strengths. Yes, over-relying on strengths can happen if one becomes a hammer in search of nails. Yet experience suggests that nonprofits’ strengths often are under-utilized as tools for organizational development. 

With a strengths-based approach, capacity-building discussions can move beyond fixing an organization's flaws to make it “just good enough” to transforming it into something uniquely great.

Read more stories by Jeremy Avins & Nathan Huttner.