Don’t Just Scale, Retrofit! – Part 2

In my previous post, I discussed what retrofitting strategy means and why it’s relevant to the majority of nonprofit organizations. But just how do you go about using the concept to work more efficiently and effectively? Here are a couple of areas that might warrant retrofitting:

Moving from evaluation to research and development

My colleague at the TCC Group, Peter York, frequently discusses the importance of research and development (R&D) for the nonprofit sector. TCC’s excellent briefing paper “Success by Design: How R&D Activates Program Innovation and Improvement in the Nonprofit Sector” states: “While traditional evaluation seeks to measure return on investment, R&D actually enables that return by providing an understanding of how to reach the greatest number of people.”

The majority of the sector is trying to mesh in scaling-type evaluation systems when they should be developing and advancing off of an R&D-type system. As York states in the paper: “R&D is a process for improving an existing service or product to maximize the likelihood of immediate results for every individual user.” This system is perfect for an organization primed to retrofit.

Bubbling up ideas from the conveyer belt

There are a number of great organizations with great resources (think the Grantmakers for Effective Organizations’ Scaling What Works site and the Packard Foundation’s Wiki site on organizational effectiveness), but these resources draw from the very small number of effective organizations and programs throughout the country. The conveyor belt that carries many of the best and most promising practices is fueled by funders—foundations and government.

The solution to finding ideas and best practices outside of current models might be transparency. Government and foundations have been opening the vault on every aspect of the funding process, including grant applications and reports. On the government side, there have been numerous efforts toward openness and transparency, including President Obama’s Open Government Platform and the previous development of the Freedom of Information Act. While these are great, the system is still so archaic that it would take a special ops force to find anything of value for the day-to-day work of the average nonprofit.

On the foundation side, obtaining useful information can be equally challenging. One of the examples of openness I like most is GiveWell, a small grant making institution and independent charity evaluator that posts both grant proposals and its opinions on its site. I find it very useful to see how groups "sell" themselves through the different proposals and how a trained philanthropic eye might perceive the impact of these proposals. Imagine if all, or even half, of our institutional funders followed GiveWell’s lead in regard to openness and transparency. It would be an entirely different sector.

Creating helpful human capital systems

Whether it’s human resources or volunteer management, many organizations are either underprepared for or under-focused on managing their human capital. Nonprofits spend between 70 and 80 percent of their dollars on people and yet, as the majority of the organizations are small- to mid-sized, they have a limited capacity for effectively managing those people. This should be a huge concern. Outsourced human resources services and volunteer management software—although it potentially helps reduce legal risk and creates some useful processes—is seldom adequate.

When Professionals for Nonprofits released its “2011 Good Nonprofit Job Report,” 60 percent of workers in Washington, DC, and 65 percent in New York said their hard work was not valued at their organization. This sentiment runs rampant in the sector, and many organizations lack even basics like job descriptions, annual reviews, and professional development strategies. Are there tools, solutions, and resources that help ease this burden for organizations? Yes, but the intermediary and management support services that often provide this help at the local level are underfunded.

There are other areas within the sector ripe for retrofitting too, including board development, capital planning, and nonprofit risk management.

Work on scaling effective practices is great, and I am a huge proponent of it, but the market is smaller than the retrofitting one. Our discussion should pivot; we should explore and develop ideas for retrofitting areas within the larger nonprofit community. Like President Obama’s push to build up our nation’s aging infrastructure, we in the nonprofit sector should be pushing for solutions to retrofit our underdeveloped or aging systems and infrastructure.

Read more stories by John Brothers.