Will your nonprofit survive?

You may have heard of this downturn thing.  How will your nonprofit survive? What drives nonprofit success? This is what I went to Peter Frumkin to find out.

The Definition of Philanthropy: The effort or inclination to increase the well-being of humankind, as by charitable aid or donations. -Answers.com

The Definition of Fundraising: the organized activity of raising funds (as for an institution or political cause). -Mirriam-Webster

The Definition of Peter Frumkin: He’s  not an authority on fundraising, he’s an authority on philanthropy. He wants to make that clear.  Peter Frumkin is Professor of Public Affairs and Director of the RGK Center for Philanthropy and Community Service at the LBJ School. Frumkin is the author of Strategic Giving: The Art and Science of Philanthropy and In Search of the Nonprofit Sector. -from the RGK Center Website

Why I interviewed him: His work was recommended to me by a fellow development professional, and I wanted to hear his assessment of the nonprofit sector as a whole, what creates a successful nonprofit organization. There is so much pressure on development professionals to perform, I wanted to hear what would make a nonprofit succeed. And his answer surprised me.

He said, “Organizations that do good work attract donors and volunteers. Organizations that are not well managed do not garner long term support.  What matters is the perceived impact, the perception of community values, and the barometer of trust, support, and confidence. The real driver of nonprofit success is effectiveness, this cannot be reduced. Well, you could have knocked me over with a feather. Development only really works when a nonprofit is actually fulfilling its mission? And otherwise, the nonprofit will fail? WOW.

How do you, a development professional, show that your nonprofit is fulfilling its mission? How do you measure this to the satisfaction of your foundation funders and individual donors? Say, for instance, you run a tutoring program for low-income, at risk youth in South Chicago. How do you prove that your program has a direct impact on these children’s lives? According to  “Equality of Educational Opportunity” by  Jim Coleman, the  number one indicator of academic achievement is the mother’s education, then parental involvement.  Tutoring programs for youth just can’t show definitively that they matter. Nonprofits don’t have time to follow their students 3 years out, to see how lives were changed. There are too many other factors, too much static in the system to point to any one cause of academic achievement based on what your nonprofit does.

But causality is hard to establish no matter what your nonprofit does. All you can measure is units of services, people served, rides given, etc. Nonprofits can’t be rated easily with financial metrics or effectiveness metrics.  There’s a spotlight on executive salaries for nonprofits, because it’s easy to look at nonprofit budgets, but that’s not that interesting.  He said, “The REALLY interesting question is,  “How much money goes into nonprofit programs that don’t work?”

So, in conclusion, operational success and mission excellence is the real driver of nonprofit success. Mission excellence will get the funds.  But the proving of that, now there’s something we still haven’t figured out how to really measure.

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