I started reading “Nonprofit Lifecycles” by Susan Kenny Stevens. When I was talking about how I had seen my work place, Kala Art Institute, in terms of its capability to run our expanded facilities, Ron Saunders recommended this book, and the book was actually in the bookshelf of our executive director, Archana Horsting. Being lucky, I just took the book, copied it and started reading it.
This book diagnoses and gives critical points to the Capacity of non-profit organizations based on a developmental Lifecycle Model. Okay, the first of all, Capacity. What’s that? I thought I had known the idea, but once I asked myself, I realized my definition was so vague. The author first wrote “Capacity is another word for organizational capability and competence” and compared it with other terms which would be often confused, Performance and Effectiveness.
Capacity (means) – Performance (measurement) – Effective (Impact)
Then she raised 5 Capacity Builders, which are five aspects of organization’s Capacity;
- Programs
- Management
- Governance
- Financial Resources
- Systems.
According to the author, many foundations in 90s embraced a program focused grant rather than operating supports. It made nonprofits become aware of accountability and outcomes of the programs, and the way to measure the effectiveness of grant was pretty simple for the founders. As a result, many organizations started striving to achieve the maximum result with minimum administrative cost. But the part of budget looks like “overhead,” such as a bookkeeper’s salary, an audit, administrative support, improves the infrastructural capabilities of an organization to perform.
And this part almost sounded like what is going on at my work place.
All too many nonprofits focus on crating new programs and keeping administrative costs low instead of building the organizational capacity necessary to achieve their aspirations effectively and efficiently. This is not surprising, given that donors and funders have traditionally been more interested in supporting an exciting new idea than in building an organization that can effectively carry out that idea. This must change; both nonprofit managers and those that fund them must recognize that excellence in programmatic innovation and implementation are insufficient for nonprofits to achieve lasting results. Great programs need great organizations behind them.
Supporting the idea of Lifecycle Model, she presented Erik Erikson‘s human developmental theory. Well, yes I was a psychology major, so it was almost funny to see her using Erikson’s theory, since I was always critical about developmental psychology theories in terms of its rigidity comparing to the complexity of actual human development. Well, this application to a non-profit theory seems to be valid though, since this kind of theory is always helpful when we need to communicate with someone else by describing and understanding an organic continuously-changing phenomenon such as nonprofits and humans.
There are 7 stages in a nonprofit lifecycle.
- Idea
- Start-up
- Growth
- Maturity
- Decline
- Turnaround
- Terminal
Well, I will write about the details of those later. It seems it will be super helpful to carefully learn Growth section for Kala Art Institute.