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Tools You Can Use: Six Keys to Successful Nonprofit Organizational Assessment
Tools You Can Use

Six Keys to Successful Organizational Assessment

Resource
A Funder's Guide to Organizational Assessment

Contents
Six Success Factors

1. Depth and breadth of skill needed
2. Commitment and buy-in
3. A well-tested framework
4. Accurate and complete information
5. Confidentiality and ownership of findings
6. Clear expectations regarding use of findings

High Risks, Great Benefits

 

From Vince Hyman, former Publishing Director, Fieldstone Alliance:

Cartoon of doctor consulting with nonprofit patientORGANIZATIONAL ASSESSMENT, at its best, is a constructive step toward health and improved performance. It allows organizations to step back and take stock of their development, their strengths and challenges, and the choices they face for future success. Assessment can help organizations learn how they are performing compared to their peers. Assessment can be the launching point for a planned change effort. It can motivate a sluggish board, or help a funder make wise funding decisions.

However it's conducted, an organizational assessment will have some impact on the organization and must be done wisely. The best approach to organizational assessment for your organization and your community is one that is uniquely tailored to fit your goals, resources, needs, and constraints. For assessment to have the greatest impact, the process must be designed as a journey of learning and discovery rather than as a test or judgment.

Six Success Factors
Many factors need to be carefully considered to conduct or sponsor either a successful organizational assessment or a broader assessment program. Six success factors deserve special mention:

  1. Depth and breadth of skill needed
  2. Commitment and buy-in
  3. A well-tested framework
  4. Accurate and complete information
  5. Confidentiality and ownership of findings
  6. Clear expectations regarding use of findings

These factors have implications for the approach you choose and the resources you will need to do assessment well.

1. Depth and breadth of skills
Using sensitive, impartial, experienced, and skilled people to conduct the assessment is critical to getting the best results. Consultants should possess organizational expertise, industry knowledge, and process skills. Ideally an assessment team will have at least two members to allow for a broader range of expertise and to ensure that issues aren't missed. Team members with a high degree of organization development experience and industry knowledge not only will be better able to identify issues during the assessment, but also will have greater credibility with the organization. This credibility improves the relationship with, and in-depth probing of, organizational stakeholders. It also increases the depth of the analysis of organizational strengths and challenges.

2. Commitment and buy-in
This issue can loom especially large when the assessment is required of a grantee by a grantmaker, but is present in most assessments, regardless of who commissioned it. Readiness and openness to learning on the part of the nonprofit is critical. The organization should state how it expects to benefit from the experience before the assessment begins. For this reason, when assessment is part of a grantmaking process, it is more effective if the assessment is proposed by the organization, or at least is viewed as being done with them, rather than to them.

Buy-in from both board and staff maximizes the chance that the organization will heed assessment findings and implement needed changes. If the executive director is the only nonprofit representative deeply involved in the assessment, then the findings will "belong" to that executive director. The risk is that if the executive director resigns, the remaining staff and board will have no ownership in the assessment, and its utility will be short-lived. Involving key board members and staff from the outset—from selecting the assessment method and consultant to participating in strategy discussions—helps them to become deeply committed to the process and mitigates this risk. Some assessment processes are set up to include two to three staff or board members on the assessment team with the consultants to help plan the process and ensure clear communications. Broad participation and commitment also benefit the funder by ensuring that a full range of issues is considered and minimizing potential problems and resistance to change.

3. A well-tested framework
A well-tested assessment framework and assessment tools will ensure that critical issues aren't missed and that there is a theoretical or researched basis for the analysis and recommendations. (The assessment programs profiled in A Funder's Guide to Organizational Assessment offer some useful, well-tested examples.)

A framework for organization effectiveness should describe what components are viewed as critical to the organization's functioning, and how these components interact and perform in a well-functioning organization. Different models or frameworks appear in the literature because people place greater or lesser weight on individual components, use different terminology, or have tailored their model to a particular kind of organization. For example, Fieldstone Alliance bases its assessments on an examination of seven components: governance and leadership; mission, vision, and strategy; program delivery and impact; strategic relationships; resource development; and internal operations and management. Note that each of the seven components contains many aspects of organizational operations that can be assessed alone or in combination with others. For example, you can conduct a thorough assessment of an organization's financial position and working capital, as Nonprofit Finance Fund (NFF) does. NFF's Nonprofit Business Analysis assesses the finances, programs, and business models of nonprofit organizations, and evaluates their readiness for change, including moving, renovating space, growing, downsizing, or receiving a grant or loan. The critical thing is to be sure that the particular issues you want to address are included in the framework that supports the assessment.

If you are choosing consultants to conduct assessments, be sure discuss the various models and frameworks they typically use. If you need multiple consultants to work with a framework you have selected, make sure that the consultants have a common understanding of industry standards—what constitutes outstanding, acceptable, or inadequate performance in each area or indicator. Also, ensure that they are able to clearly and confidently communicate this framework to the nonprofits they work with.

4. Accurate and complete information
Getting accurate and complete information is both a challenge and a necessity. It is human nature to resist disclosing personal or sensitive information to people who don't inspire your trust and confidence. Building trust requires time and a skillful assessment team. Steps to ensure that accurate information is collected include

  • Selecting consultants who inspire confidence and assure impartiality throughout the process
  • Ensuring that the board and staff are deeply committed to the assessment process and that they encourage everyone to provide honest, thoughtful information
  • Gathering information from multiple sources: board, staff, volunteers and external stakeholders
  • Being transparent about what information will be shared, with whom it will be shared, and how the findings will be used

5. Confidentiality and ownership of findings
Nonprofits typically are eager to learn the assessment findings, but fearful of others having access to the same findings. Will they be judged, compared to other nonprofits, and suffer in the comparison? The key to avoiding these concerns is clarifying up front who owns the information, how it will be shared, and how it will be used.

If the assessment is required or requested by a funder, the nonprofit's and funder's agreement on information ownership and access should be disclosed at the outset of the process and at the beginning of each interview. Assessment findings should be shared with the executive director before they are included in the final report. Giving the director an opportunity to review, dispute, and potentially amend any findings before publication eliminates the fear of unpleasant surprises. The final report is generally shared with key staff and the board, although who sees the report and how it is used will vary based on the goals and strategies used.

Some hold that a funder should never see the assessment report; in other cases, where the funder commissions the assessment, they may see an executive summary of findings and recommendations. If the nonprofit that is being assessed knows that the funder will see the entire report, parties are less likely to divulge accurate information and perceptions. Whether or not the funder sees the complete assessment report or a summary of key findings and recommendations should be negotiated prior to beginning the assessment.

6. Clear expectations regarding use of findings
Nonprofits have concerns at the beginning of an assessment such as whether they will be forced to implement all of the recommendations, or have choices about how to respond to the findings.

If the assessment was mandated by a funder, other concerns include whether the assessment findings affect funding or even put it at complete risk. How the funder will use the assessment findings should be clear at the beginning of the process. If nonprofits see only risk in the undertaking, they are unlikely to participate willingly, or to share complete information.

If the funder and the nonprofit agree on the implications of the findings, and the expectations each has for implementation, the path to a successful assessment will be clear . Assessment is most appropriately used as a critical step in a development process—or as a journey of discovery and learning—rather than as a means of deciding whether or not to pull funding. Some funders only assess organizations after they make it through the due diligence process and receive a grant award. For example, once an initial grant is awarded, Social Venture Partners of Seattle (SVP) asks grantees (whom it terms "investees") to complete a capacity assessment tool to help assess their organizational capacity and establish goals and benchmarks so progress in building capacity can be measured over time.

High Risks, Great Benefits
These six success factors need careful consideration and attention when planning and implementing an assessment program. Despite the best of intentions, whenever an outsider enters an organization, he or she disturbs the life of the group. Done poorly or insensitively, assessment can cause conflict, frustration, loss of productivity, and resentment within the organization. Done well, it can launch the organization to a new and stronger stage in its development.

Just as many of us become "house blind," failing to see the stacks of clutter and dust bunnies under the couch, so too do many organizations get used to how they operate. They may no longer realize that they are spinning their wheels, have ineffective systems, or even that they have tremendous untapped capabilities to improve their performance. Assessment can deliver many kinds of results. It can increase efficiency, multiply impact, reinvigorate boards, and spur staff in new directions. Assessment can build the capacity of nonprofits, enhance grantmaking, impact systems, and strengthen the nonprofit sector. Assessment truly is a powerful change strategy. Like all forms of power, it must be handled with care—and used wisely.

Fieldstone Alliance's consulting team designs and conducts assessments for nonprofit organizations, funders, and collaboratives across the country. Call 651-556-4502 for more information.

Sincerely,

Vince Hyman
Publishing Director
Fieldstone Alliance

January 10, 2006

 

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