Nonprofit Turnaround

 

Did you know:

• Approximately half of the nonprofit sector is in crisis, and only a portion of the problems nonprofits currently face have been caused by the recession.
• Only half of nonprofit boards disclose the depth of a crisis to an incoming leader.
• Most turnaround leaders must multitask, often clocking 80 hour per week, to resolve organizational problems before human and financial assets drop too low.

My new book, "Nonprofit Turnaround: A Guide for Nonprofit Leaders, Consultants and Funders," delves into these questions. It is for nonprofit leaders who seek to transform struggling nonprofits into high-functioning, mission-achieving organizations.

Take Mary McKinney. When she became executive director of the Alcohol and Drug Council of Middle Tennessee, McKinney observed that the Council’s program quality was going downhill, staff morale was pitiful, and the prior executive director and board seemed to have been asleep at the wheel.

By interviewing each staff member, McKinney was able to see how to approach the turnaround process, concluding that the staff needed to get excited about the breadth of possibilities. 

According to McKinney, “There was a community meeting room that was shabby beyond description, with cheap plastic patio chairs, tables were old and heavy and beat up, carpet literally ripped to shreds that you would trip on, and a dropped ceiling that was falling down in several areas. A committee had met for a year to decide how to fix it, and only sat around and discussed what color to paint it.”

McKinney fired the committee, got donors to contribute paint and materials, and got donated labor to renovate the room in two months. It looked great, and it got the staff to sit up and notice. Then McKinney began to oversee changes to the Council’s management, meeting with different constituencies to chart a strategic planning process. The new Council management soon determined that it had lost sight of the organization’s vision by trying to be all things to all people and chasing funding. It had fallen victim to mission creep.

“Based on this analysis,” said McKinney, “we stopped several programs, including divesting one large one. We made a decision at that retreat to never again chase funding that caused mission creep. We then determined to broaden revenue sources to reduce our reliance on grants, and got more mission focused. We figured out what we did well and stuck to it.”

Council management also made sure that each program was using scientifically based best practices and established outcome measures. “Before the turnaround, we used to serve anyone,” said McKinley. “Over a couple of years, we switched focus to serve people who are the most vulnerable, most in need—homeless people, and people in poverty. We stopped focusing on services for middle-class and upper-middle-class clients. These changes have actually helped us in our fundraising. We redefined who our customer is.”

In short, McKinney was successful because she had the courage to lead a process that involved major organizational decisions, including staff and program changes and cuts. Her story is just one of over 100 case studies in "Nonprofit Turnaround." The book provides a framework to help nonprofits diagnose problems and address them openly. Doing so is the first step to ensuring that an organization continues to meet its mission.

Read more stories by Jan Glick.