Fundamentals of Nonprofit Management
A six-part series on the timeless principles of leading, sustaining, and expanding a nonprofit organization.
An old Sicilian proverb says that a fish rots from its head. A nonprofit organization, similarly, rots from its mission.
Nonprofits are, by definition, mission driven. The leaders of a corporation can assert with ease that its purpose is “to maximize shareholder value.” From that core purpose, any stakeholder can infer how its performance will be measured and how its leaders will make strategic trade-offs. But nonprofits lack such inherent clarity of purpose. In addition, they usually have multiple stakeholders who have various and conflicting expectations. A mission statement, therefore, is one of the most useful tools that nonprofit entities (including foundations) have available to them. A clear and well-focused mission statement can serve to guide all major decisions that a nonprofit organization must make—especially decisions about which new programs and projects to undertake, which to avoid, and which to exit. Yet this tool frequently goes unused.
Most nonprofits today have missions that are simply too broad. Over the past 16 years, nearly 1,000 students in the “Strategic Management of Nonprofits and Social Ventures” course at the Stanford Graduate School of Business have participated in a class exercise on the topic of organizational mission. In the exercise, they examine the mission statement of a particular nonprofit group, and they also interview that group’s stakeholders. Each year, at least 75 percent of these students discover that the mission statement that they are evaluating lacks rudimentary clarity and encompasses so many activities that even a large, resource-rich organization would struggle to do them all, let alone do them with excellence. What’s more, very few stakeholders know and understand the mission of their organization, and very few of them feel any degree of passion or commitment toward it. Many of these organizations suffer from the leading virus of the social sector: mission creep.
Mission creep can stretch an organization so thin and so far that it can no longer effectively pursue its goals. In the private sector, it would seem preposterous for a coffee-roasting company to jump into the biotech business or to start manufacturing baseball gloves. Yet nonprofits routinely extend their operations in equivalent ways—they expand their programs far beyond their organizational scope and far beyond their core competencies—and no one raises an eyebrow.
How, then, can a mission-driven organization make pursuing its mission a number-one priority?
Develop an Effective Mission Statement
A strong mission statement that reflects an organization’s true mission is the first, best tool to ensure that an organization will resist mission creep.
In “Curbing Mission Creep,” published in the winter 2008 issue of SSIR, we used the first winner of the Henry R. Kravis Prize in Leadership—Roy Prosterman, founder of Landesa (then called the Rural Development Institute)—to illustrate the power of an effective mission statement. A clear focus on its mission has enabled Landesa to resist the temptation to expand into countries and environments where it lacks appropriate skills and resources. In the article, we outlined seven characteristics of a well-honed statement of mission: It is focused. It solves unmet public needs. It leverages unique skills. It guides trade-offs. It inspires, and is inspired by, key stakeholders. It anticipates change. And it sticks in memory. The vast majority of nonprofit mission statements, in our view, violate one or more of these guidelines. That failure can have serious consequences: A mission-driven organization with an ineffective mission statement will struggle to develop a durable theory of change and a useful logic model, it will deploy its resources inefficiently, and it will get distracted from its core purpose (if indeed its people understand what that purpose is).
Even some Kravis Prize winners that have achieved extraordinary impact have less-than-extraordinary mission statements. At a daylong retreat held in April 2013, we spent time working with Kravis Prize recipients to assess and improve the mission statements that help define their organizations.
Sakena Yacoobi, founder and CEO of the Afghan Institute of Learning (AIL), bravely volunteered to subject her organization’s mission statement to a process of critique and revision. AIL is a rare example of a nonprofit that has produced an extraordinary impact despite having a suboptimal mission statement. Over the past 17 years, AIL has provided transformative education and health care to 11 million people in Afghanistan and Pakistan. As a result, it has achieved significant reductions in infant and maternal mortality rates in the areas where it works. AIL’s original mission statement had fallen prey to excessive wordiness; it was a full half-page long. Its usefulness was therefore limited—not least because staff members, donors, and other stakeholders simply couldn’t remember it. In addition, there was an opportunity to incorporate language that would be more focused and more inspiring. So we helped develop a new and pithier mission statement for AIL: “to provide education, training, and health services to vulnerable Afghan women and children in order to foster self-reliance, critical thinking skills, and community participation throughout Afghanistan and Pakistan.”
Closely related to the issue of mission statements is the question of whether and when to create vision and values statements. The trend now is for nonprofits to develop mission, vision, and values statements all at once. Our against-the-grain view is that organizations should stop wasting time on vision and values statements, and funders should stop expecting nonprofits to provide such information in grant proposals. A mission statement is critical—but vision and values statements are much less so. When an organization combines those three elements in a single communication, stakeholders are apt to lose sight of what matters most.
A “vision” is exactly what it sounds like; it’s a description of a desired end state. We’ve never seen a mission statement and a separate vision statement that weren’t redundant and, therefore, potentially confusing. If you think that your vision is an essential part of your mission, by all means include it in your mission statement. But for many nonprofits, it’s not essential. A statement of values, meanwhile, can serve a very important internal function. But these days, the values of every organization are pretty much the same. We’re all for diversity. We’re all for leadership. We’re all for collaboration. We’re all for excellence. So why make a special point of it? As with vision, so with values: If you believe that a certain value helps define your organization, then put it in your mission statement.
In general, the effort of trying to convey an organizational mission in two, three, or four sentences— and to do it in a way that is compelling to both internal and external stakeholders—is a very good exercise. It forces you to consider the key underlying compromises that characterize your organization.
Resist the Pressure to Go Astray
There are countless external and internal pressures that will cause mission creep in the absence of strong and intentional pushback. Funders typically want to see the focus of their grantmaking reflected in the mission of the organizations that they fund, and that expectation results in subtle but fierce pressure on nonprofits to broaden the scope of a stated mission. During our discussion with Kravis Prize recipients, we observed that a prevailing theme was the need to say ‘No, thank you’ to funders whose grants might foster that kind of mission creep. “Once, when I tried to protect us from mission creep, I lost a multi-million-dollar funding opportunity,” says Yacoobi. “That was significant for us, because our total budget is only $3 million. I said to the funder, ‘I’m not going to do what you are telling me to do, since it is outside the scope of our mission. I am doing what our beneficiaries need me to do.’ And I lost that funding.” The price of saying no can be very high. But smart nonprofit leaders understand the cost of saying yes.
Funders are generally to blame for the onset of mission creep, but nonprofits usually have internal stakeholders who are complicit in that process. “I call them ‘mission whores,’ and they are at work within most organizations,” says Oley Dibba-Wadda, former executive director of FAWE. “They are internal stakeholders of an organization who are willing to ‘sell out’ by excessively broadening the scope of the mission in order to obtain funding or other advantages.” In our discussion with Kravis Prize recipients, most of them could cite instances when a member of their organization had faced the temptation of mission creep and needed to be reined in by colleagues.
Kravis Prize recipient Soraya Salti, CEO of INJAZ al-Arab, notes that INJAZ recently made a decision to focus exclusively on entrepreneurship education for young people in the Middle East and to shun pressures to expand into start-up funding and incubation. “INJAZ staff and stakeholders at some of our regional chapters were enthusiastically pushing for INJAZ to expand in this [proposed new] direction,” Salti recalls. “They had good reasons: In the Middle East, there is a significant unmet need for funding and incubation for our graduates who desire to use their entrepreneurship education to start businesses. Plus, one of our key donor’s funding criteria [were] shifting from education to new jobs and number of enterprises created. But we ultimately decided that being a seed funder was not our core competency and [that] we should stick to education and matchmaking, because those are the things we do best.”
Embrace the Opportunity to Go Deep
Although nonprofit leaders must learn to say “no” to attractive funding opportunities or compelling programs that are not aligned with their mission, they must also learn to say “yes” to challenges that take their mission to the next level.
During our retreat with Kravis Prize recipients, most of them cited instances when they had said “yes” to an opportunity to tackle an outsized challenge that was aligned with their mission. In each case, they noted, that decision had enabled them to increase their impact dramatically. They also recalled that the decision was far from straightforward, and that it would have been much easier to take a more incremental approach. It is in these instances that pressure from funders can have a positive effect. Madhav Chavan, founder of Pratham, offers an example of that dynamic: “We have many long-term donors who noted our success with elementary education but kept asking, ‘What about vocational training? Wouldn’t this complement Pratham’s other programs?’ Our management team came to realize that they were right—that we needed to launch vocational training services because it was part of the continuum of education and supported our mission”
In very special cases, creating separate organizations that take the form of brand extensions (as they are called in the corporate world) can help a nonprofit to avoid mission creep even as it pursues new and appropriately aligned initiatives. Consider the case of Pratham, which has an admirably brief and well-focused mission statement: “Every child in school and learning well,” There were clear and compelling reasons for Pratham to develop wrap-around services, such as vocational training and children’s-book publishing, that would complement its learning programs for elementary school children. Yet because these initiatives were beyond the explicit scope of its mission statement, Pratham launched separate organizations—one called Pratham Books and another called the Pratham Institute for Vocational Training. Each of those organizations has a separate board, with Pratham essentially functioning as a holding company for these distinct but closely aligned entities. The mission statement for Pratham Books, incidentally, not only reflects that group’s connection to Pratham’s core mission; it also offers a prime example of what a well-crafted mission statement looks like: “A book in every child’s hand.”