Tackling Changing Markets with Enterprise Community Partners

In our last post we took a close look at how UNCF found its new north star, as an example of what social innovation at scale can look like on the ground. Another example of innovating at scale is the transformation work that our team led at Enterprise Community Partners, a national nonprofit that helps produce homes affordable to lower-income families in neighborhoods connected to social and economic opportunity.

As CEO Terri Ludwig described it, urban visionary Jim Rouse and his wife Patty founded Enterprise in 1982 with the ambitious goal of helping every person in the U.S. find a decent, affordable place to call home. Over the past three decades, Enterprise has helped build or preserve more than 300,000 affordable homes, invested $14 billion into communities, and been on the forefront of federal housing policy.

In the wake of the mortgage market meltdown and the subsequent Great Recession of 2008, the housing and community development field was undergoing a significant shake-up.  Sensing challenges ahead, Enterprise took a proactive step to rethink its long-term vision and strategic plan. In early 2011, it brought in Monitor Institute to help.

Like many established nonprofits, Enterprise has numerous assets: committed people, a strong footprint in local communities, national networks on Wall Street and in Washington, D.C., a trusted brand, and a history of innovative programs. However, like many nonprofits beyond the start-up phase, Enterprise knew it needed to adapt to a rapidly changing ecosystem. Monitor Institute’s mandate was to help clarify success and identify priority levers for impact, as well as help the organization become more integrated, adaptive, and faster-paced.

Thinking ahead and thinking different. To develop ideas about what a newly strengthened Enterprise could be in the decade to come, we took the leadership team through the process of imagining the different ways that the world could look in 10 years’ time and picturing the new solutions that Enterprise could then offer. That process of exploring alternative futures, picturing what success would look like, and developing new solutions helped the Enterprise team come up with new ideas for community development. As one of the participants in a scenario workshop commented, “I have worked in this sector for over 20 years, but by looking ahead the way we did, I am suddenly looking at the work we’re trying to do with fresh eyes.”

Identifying levers for change. Monitor Institute’s team worked with CEO Terri Ludwig and an integrated cross-organizational leadership team to identify several broad levers to increase impact. We settled on three: know what works via experimentation on the ground and scanning the larger field; innovate and scale time-tested approaches by bringing investment capital to fund the best models; and advocate and engage by influencing policy and developing a larger narrative around the pressing need for affordable housing. These three pillars represented the cornerstone of a new forward-looking strategy that seeks to drive impact in many different ways, through a variety of offerings and programs. The specific goals and activities underneath each of these pillars were then to be determined each year, enabling the organization to adapt and capitalize on new opportunities.

Strengthening the business model. As part of our strategy work with Enterprise, the organization kicked off an effort to further diversify its revenue sources. With traditional tax credit-related revenues under pressure on Capitol Hill, Enterprise’s leadership decided to put significant effort into developing new sources of income. We helped Enterprise in their efforts to identify new earned-income opportunities and develop a “mission-money” matrix that would allow the team to stay on course while exploring further business opportunities.

Aligning the organization. While working on the first phase of the project, we also helped the CEO begin to identify ways in which the organization was “getting in its own way,” such as with its complicated hybrid for-profit/nonprofit structure with multiple governing boards. We helped Enterprise think through several moves that cut through its existing silos to create greater integration and overall strength. This began with consolidating and aligning a senior leadership team that had historically been split across the nonprofit and for-profit sides of the house, and continued with the development of a shared cross-organizational roadmap that was endorsed by all parts of the organization. It also included the leadership driving greater integration of its multiple boards and governance systems and changing its tax status for certain businesses, resulting in increased organizational effectiveness.

Early results: During the last year and a half, Enterprise has already begun to deliver on its strategy by launching innovative initiatives across its three levers for impact: know what works, innovate and scale, and advocate and engage. When we asked the CEO about the most important outcome of this initiative, she said: “Enterprise has always been guided by a vision: that one day every person in the U.S. has a safe, stable home. But thanks to our work with Monitor Institute, we’re honing that vision into tangible, real-world outcomes we plan to achieve both near and long-term. We now have a roadmap for the future, grounded in core beliefs and shared goals.”

Read more stories by Carolien DeBruin & Heather McLeod Grant.