As first published in Guidestar's Blog trust.guidestar.org
Part 1 of 3
“Why haven’t you achieved higher outcomes through your services and the funding that fuels them?” This is a common question that many funders and board members ask nonprofits, and many of those nonprofits struggle to defend their programs, people, hard work, and budget usage. Sometimes they feel that their funders or boards just don’t understand what it takes to run their programs, let alone track and achieve outcomes. At the same time, they all know at least one nonprofit in their field that not only answers the outcome achievement question easily but can confirm those outcomes are actually happening for their participants and have already made changes in what they do to improve those outcomes in the future.
What separates the two types of organizations? What keeps many nonprofits from integrating the ability to track and monitor outcomes? How does an organization move from being a “service provider” to becoming an “outcome achiever”? Most nonprofits (over 80 percent) are still in the early stages of using performance management practices to achieve and improve outcomes*.What gets in the way of them making the move? Is it simply having enough time and resources at their disposal, or is there something more going on?
After working with thousands of nonprofits and hundreds of grantmakers over the last 20 years, here are my observations on why we are where we are as a sector around outcomes:
- Motivation: Over the last 50 years, government and other grantmakers have rewarded nonprofit organizations that are in compliance and that focus on and report what they do and how many they do it for. Nonprofits have NOT been rewarded for or supported in defining, tracking, achieving, or improving participant outcomes. They have received little support to build their performance management capacity to achieve and improve outcomes. They have, however, been penalized for not delivering the same amount of service/activity as they agreed to, or for submitting grant reports late.
- Clarity: Funders often describe vague expectations about outcomes in grant guidelines and applications but want very clear ones when it’s time for a nonprofit to report on how the money was spent.
- Resources: Unless a funder demands specific outcomes reporting, nonprofits don’t feel they have the time or resources to build performance management toward outcomes.
- Data Use: Many nonprofits are not generating, gathering, or using relevant data in a robust way to inform practice and learning. They are limited in both their data systems and in the cultivation of a regular data-use culture. It takes time and commitment to do both.
- Limiting Beliefs: The largest cause of not moving from service provider to outcome achiever lies in how nonprofits see their and their funders’ roles in outcome achievement. This is where the power struggle often originates. When nonprofits see their role from a limited perspective, the beliefs and behaviors they use may also be limiting their funding partnerships and participant outcomes. A new perspective around their role in outcomes creates different beliefs and behaviors that empower organizations to continuously learn and improve. I find that a change in belief-set is required before a nonprofit will invest in their performance management capacity for robust outcomes monitoring and tracking and learning integration.
As humans, our beliefs and expectations drive what we do. They shape our assumptions about our roles and value, define how we see ourselves and others, and influence the way in which we look for solutions. Our beliefs drive where we focus our attention and energy.
For example, if I believe our team isn’t so great, I don’t expect it to win the games we play together. When it’s time to compete, my expectations limit the opportunities I see and the actions I take during the game, including the support I offer, the preparation I put in the risks I take, and the energy, creativity, and enthusiasm I bring. When, however, I believe that our team has incredible potential and is getting better every day, I expect that we will win games. When it’s time to compete, my expectations empower me to be more prepared, see more opportunities, take more risks, offer more support, and bring all of my energy and enthusiasm to the game.
By challenging and changing our limiting beliefs, we give ourselves the opportunity to shift our perspective and step into a more valuable role, with beliefs and behaviors that empower us to have the impact we truly seek.
Below is a belief chart that reflects how nonprofits see themselves and funders regarding outcomes. On one end of the spectrum is a limiting perspective. The other is an empowering perspective.
Limiting perspectives can be hidden from our awareness, yet they often drive what we do. For nonprofits, limiting perspectives can keep them focused on services and outputs instead of aiming all efforts and energy toward outcome achievement and improvement. A nonprofit’s limiting beliefs can lead to telling negative stories to themselves and others to justify its role, beliefs, and behaviors. The stories I hear most often are that the nonprofit is innocent, funders/board members/partners are the villains, and that it is helpless to change, even when those stories are based in faulty conclusions and past viewpoints, not on fact.
Empowering perspectives create confidence and the focus to move toward change. For nonprofits, empowering perspectives can drive successful performance management, encourage collaborate partnerships, and promote a culture that integrates learnings, which in turn sustains the ability to achieve and improve outcomes for program participants. Nonprofits feel energized and safe enough to interpret their experiences through more reasonable and fact-based stories, which increases trust and safety in their partnerships and in their ability to step into an open, collaborative, learning mindset. Organizations feel empowered and worthy to engage with their funders for support to build their performance management capacity to achieve and improve outcomes.
MOVING TOWARD CHANGE
Many nonprofits make the move from service provider to outcome achiever when a new board chair or executive director gets engaged with the passion and courage required for high outcome achievement. Becoming an outcome achiever is a lasting organizational strategy that leads to financial sustainability and significant impact. And it helps to answer the question that started this article, “Why haven’t you achieved higher outcomes through your services and the funding that fuels them?” As an outcome achiever, you would know why, know what needs to change, and what you can do to help influence that change.
When we find ourselves telling ourselves stories about our situation from a limited perspective, we can stop and ask ourselves if the story is really true, and if it’s based on the facts or perceptions. If it is not based on the facts (and it usually isn’t), we can step into the empowering perspective instead and see what new solutions or options are available.
Regardless of your role, you can be a catalyst by sharing this article series with your leaders to inspire them to action. Belief coaching is a useful tool to help leaders move their perspective from a limiting one to an empowering one – learn more about that at www.belief-works.com
Once the shift in belief-set happens, there are some great consultants and approaches for performance management. Now is the time to start making the move, as more and more funders are starting to define and integrate outcomes into their giving and in turn are supporting their nonprofit partners to make the move with them. You may be getting funding from one of them. Yet, just like the nonprofits they support, many funders are still struggling with their own performance management efforts toward outcomes. We’ll cover that topic in the next installment of this series, “Beliefs That Limit Outcomes—For Funders.”