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Home > Blog > Santa Barbara Nonprofits > @article.title

Evaluating Nonprofit Programs: Keep, Change, or Toss?

By Dr. Cynder Sinclair on Mar 27, 2015 at 01:37 PM in Santa Barbara Nonprofits
Evaluating Nonprofit Programs—Keep, Change, or Toss?

Several years ago I worked with a youth-serving organization whose board members felt insulted when I asked about their latest program evaluation. Even worse, they were flabbergasted when I asked how often they re-examined their mission statement. They emphatically proclaimed that their mission statement had been the same for 40 years and would never change and they had been offering the same programs for as long. “We want you to tell us how to be sustainable, not how to change who we are,” they admonished me.

I carefully explained to the two aspects of sustainability: financial sustainability and programmatic sustainability. Both parts affect an organization’s ability to endure for the long-term. I assured them that sustainability is an orientation, not a destination. Creating and ensuring sustainability must be a continuous, disciplined process upon which to build an effective strategic plan.

A Nonprofit’s Programs Do Not Exist in a Vacuum.

Determining how we fund our programs is just as important as building programs to meet client needs. I’ve heard it said, “No margin, no mission.” That’s a hard concept for many nonprofits to embrace when they feel the only justification needed for programs is client need. Successful nonprofits routinely evaluate their programs for effectiveness, significance, and financial viability.

When is the last time you evaluated your organization’s programs? How about your fundraising events? Are any of your programs considered sacred cows that should never be abandoned or changed? Wise board and staff members consistently ask key questions to determine the effectiveness and sustainability of everything the nonprofit does, whether programs, events, or policies.

Be Sure You Are Asking The Right Questions.

The beloved management guru, Peter Drucker, said we should continuously ask the same five questions:

  1. What is our mission?
  2. Who is our client?
  3. What does our client want?
  4. How effective are we in meeting the needs?
  5. What should change?

Once we finish the last question, Drucker tells us to begin again with the first question of re-examining our mission. Many people are uncomfortable scrutinizing their mission, feeling that it is somehow sacrosanct. In reality, today’s rapid changes affect our clients, their needs, and therefore our organization’s reason for being. Continuously asking the hard questions is critical to ensuring our nonprofit’s lasting significance and sustainability.

Establish a Disciplined Evaluation Process.

This article will highlight Jan Masaoka’s practical model for evaluating nonprofit programs as explained in her acclaimed book, Nonprofit Sustainability: Making Strategic Decisions for Financial Viability. She recommends beginning the process by identifying your organization’s core activities. Most core activities will be programmatic in nature, encompassing your organization’s services to clients. Next, identify those activities that focus on generating revenue such as your annual campaign, fundraising events, donor solicitation, and newsletters.

Once you have your list together, it’s time to evaluate each activity according to a dual bottom line: mission impact and financial return. Draw four quadrants and label each like this:

  • Top left quadrant symbol is a heart, indicating high mission impact and low profitability
  • Top right quadrant symbol is a star, indicating high mission impact and high profitability
  • Bottom left quadrant symbol is a stop sign, indicating low mission impact and low profitability
  • Bottom right quadrant symbol is a money tree, indicating low mission impact and high profitability

Now assign each of the core activities and revenue generating activities on your list to one of these four quadrants. Your goal will be to identify strategic imperatives for each of your activities based on its current impact and profitability as follows:

  • Quadrant #1 (high impact, low profitability)—Strategic Imperative: keep the activities and find ways to contain their costs.
  • Quadrant #2 (high impact, high profitability)—Strategic Imperative: invest in the activities and make them stronger.
  • Quadrant #3 (low impact, low profitability)—Strategic Imperative: close the program or give it away to another organization
  • Quadrant #4 (low impact, high profitability)—Strategic Imperative: nurture the activity and harvest its bounty while finding ways to increase its impact on your mission. Activities in this quadrant are often fundraising events.

Use This Excellent Assessment Tool.

Masaoka’s book helps you identify the criteria to use for determining impact, including ways to weight and score each activity. It also shows you how to create a profitability matrix and a process for developing a business model statement to accompany your mission statement. All in all, I highly recommend this valuable book for guiding you through continuous evaluation of your organization’s work. The most important thing you can do to ensure your nonprofit’s sustainability is to commit to developing and using a process for assessing every aspect of your organization on a regular basis.

 







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