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Tools You Can Use

Adapting to Change:
22 Structural Strategies for Nonprofits

Resources
Coping with Cutbacks
Financial Leadership for Nonprofit Executives
Nonprofit Stewardship: A Better Way to Lead Your Mission-Based Organization
Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World
Venture Forth! The Essential Guide to Starting a Moneymaking Business in Your Nonprofit

Contents
General Advice
Modify Mission
Modify Organization Structure
Modify Organization Culture

Related Resources

 

Photo of Sandy Jacobsen and Stephanie JacobsFrom Sandy Jacobsen, Principal Consultant, and Stephanie Jacobs, Consulting Associate, Fieldstone Alliance

IN OUR LAST Tools issue, we advised nonprofits to develop a broad spectrum of strategies to provide a cushion against economic downturns and to meet long-term mission goals. We suggested that you implement strategies in at least three of these four categories:

  • Increasing revenues
  • Decreasing expenses
  • Reviewing structural strategies (changing the mission of the organization, its internal structure, or its culture)
  • Participating in engagement strategies (collaboration is one type of engagement strategy)

Today, we'll be taking a closer look at structural strategies. Structural strategies involve organizational change. When major external change happens, it’s important to look internally to revisit and, if necessary, revise your mission and approach in order to serve the community in the best way possible.

To help you think about structural strategy options, Fieldstone Alliance consulting staff put together the following "real-time" resource chart. You’ll find up-to-date information and examples of the three main types of structural strategies. This chart is similar to our popular cost-cutting and emergency funding charts from issues past.

22 Structural Strategies for Nonprofits

Idea Opportunities Your First Step
General Advice
1. Lay the groundwork for structural changes. Leaders need to prepare for the possibility of structural changes and analyze the options, as discussed in this research report: Beyond Collaboration. Give this report to your board and key staff as background reading to help open their thinking to different structural possibilities. This article also provides some insight into the funder’s point of view.
2. Be open to analyzing efficiency. Yes, you can increase productivity while maintaining service quality. Here are three examples: More Bang for the Buck. Rethink how you analyze costs and how you deliver services. This can lead to ideas for how to structure the organization differently—and more cost effectively—with better potential outcomes.
3. Take your ideas to scale. Leaders in all sectors need to think differently and BIGGER to fit the scale of today's crisis, as this article from the McKinsey Quarterly suggests: Leading Through Uncertainty. Consider what changes your organization would need to make in order to take your ideas to scale. Don’t just brainstorm; analyze how implementing different ideas might affect your organization short- and long-term. A strategy screen can help you think through options.
Modify Mission
4. Revisit your organization’s mission. See if it's still aligned with programming. For example, five years ago, the St. Paul Chamber Orchestra's subscriber base was in decline. They identified structural barriers that were preventing them from fully making music available to the community. Now, since taking their music to their audiences, ticket sales have grown by 28 percent. Create a logic model to ensure alignment of mission and programming with community needs.
5. Reexamine your vision in the context of new and changing community needs. The settlement house movement, such as Neighborhood House Association of San Diego, is one example of a nonprofit industry adjusting to meet new community needs. Explore your vision of what the community needs and how your organization fits within the community. Share your vision with your community and gather feedback on whether or not they think it reflects the needs of the community. For help, read: Four Ways to Create a Compelling Vision.
6. Adjust your mission so you can become a pilot site for a foundation or an academic or government program. Some foundations or organizations in other sectors may be looking for outlets to test community programs. That’s what Urban Ventures did with City Kid Java. If your organization has close ties with a foundation, business, academic institution, or government program, brainstorm new ways of working together. Here are some tips for doing this: Collaborating with a For-Profit: Some Risks but Huge Potential.
7. Modify your mission to enable your organization to respond to rapidly changing conditions. Certain organizations—once thought to be immovable institutions—need to become more nimble. For instance, the 88-year-old James J. Hill Reference Library still provides free and accessible information, but it supplements its income with fees for customized research for businesses. Becoming a more nimble organization requires strategic thinking and acting, not a drawn-out planning process. David La Piana’s real-time strategic planning process is geared to help you respond quickly to rapidly changing conditions.
8. Train your staff to make changes that keep the focus on mission, rather than on the survival of individual programs. When staff concentrate on mission rather than individual programs, opportunities for innovation and entrepreneurism emerge. The Wall Street Journal article, Helping Themselves, gives five examples of nonprofits thinking creatively. Explore options for change, keeping mission in mind. Use Peter Brinckerhoff’s Stewardship Decision Tree to ensure decisions maximize mission-effectiveness.
Modify Organization Structure
9. Respond to a changing environment by changing programs. Take, for example, Habitat for Humanities' urban mission.With the rising number of foreclosed homes in inner cities, the group is shifting away from building homes in the suburbs. Moving families into foreclosed homes takes far less work. Keep track of the trends affecting your services. The information will help you adjust your programs accordingly.
10. Restructure due to extreme financial hardships. Many of you are aware of the struggles the Alliance for Nonprofit Management has faced over the last year. After significant restructuring, the organization is back on its feet, helped in part by the transparency demonstrated by the board. See: Board of Directors Sends a Special Message to Alliance Members. Stay calm in the crisis. While restructuring might be necessary, stop, step back, and take the long view. See: Avoiding Knee-Jerk Reactions to a Crisis.
11. Teach an old dog new tricks. Apply new technologies to the "old" way of doing things.

Nonprofits are experimenting with innovative ways to deliver services online. For example, the Food Bank for New York City is doing virtual food drives. Read more in this Chronicle on Philanthropy article: Keeping the Focus on Hunger (subscription required to read).

Another example is IDeaS Revenue Optimization, Inc. They shifted to the Internet for software distribution: In Hard Times, Change Tack, or Go Extinct.

Brainstorm technology options. Ask knowledgeable staff to explain the newer, less-known options to others. Select a program or concept to test before introducing new technology more broadly within the organization.
12. Relocate with a group of related organizations to form a one-stop shop. Health and human service providers in North Laurel, MD, combined space and resources to fill gaps in services for the community. The arrangement benefits both organizations and the neighborhood residents they serve. Examine your organization’s existing partnerships. Determine whether your programs could be more easily delivered to clients at the same location. Look for gaps in your services and reach out to organizations with services that fill those gaps.
13. Recognize when it is time to close the doors. Don’t let keeping the organization alive become the driving force. Instead, focus on maintaining the mission or successful programs. Don’t delay considering more dramatic options such as a merger. If your assets are depleted, you have little to offer a merger partner. If that happens, or if your situation deteriorates too quickly, the only option may be to close the doors. Be realistic in analyzing your situation with your board and key funders. If you need to go out of business, plan to do it as humanely and with as much integrity as possible. Consider whether you have programs, contacts, or other resources to offer to other organizations better equipped to make use of them. Read: Six Signs That It’s Time To Consider Going Out of Business.
14. Expand your access to capital by becoming a hybrid organization.

Nonprofits aren’t the only organizations that do good. L3Cs and B Corps are just two examples of hybrid, alternative structures for organizations. Not only are they socially responsible, but these organizations get many of the investment and tax benefits of for-profit organizations.

Here are some good resources:
Americans for Community Development

Hybrid Business Model Gives Social Causes Access to Venture Capital

Hybrid Organizations: More Than Just a New Fuel—An Interview with Steve Dubb (subscription required to read)

Do your research. As of this writing, there are five states that recognize L3Cs, and regulations for these companies vary from state to state based on LLC law. As a Chronicle of Philanthropy article explains, “Businesses that are seeking the L3C designation in another state should select the state with an L3C designation whose LLC law is most compatible with their home state’s LLC law.”
Modify Organization Culture
15. Revamp your organization’s leadership and decision-making structure. Another example from the St. Paul Chamber Orchestra: In 2004, it transferred its leadership from staff to a group of musicians and artistic directors. “The contract…calls for increased musician participation in artistic leadership and governance activities.” As a result, the orchestra's current response to the economic crisis is more collaborative and transparent. Understand who needs to be involved in what decisions and when. Not all decisions can be made collectively, so think about who to consult for what.
16. Educate the board of directors to make them more effective. If boards were perfect, there wouldn’t be so much information on how to improve them. Here are some particularly good resources: Linking Mission to Money and Ten Dimensions that Shape Your Board. And, of course, there are many board development services. Assess the board’s current capacity and effectiveness to determine the areas where board members need more training or education. The Best of the Board Café includes an example of a simple board self-assessment.
17. Share resources with other organizations that have similar needs. The Kennedy Center is sharing its expertise in management and fundraising with arts organizations across the country through a new program called Arts In Crisis. This move positions the organization as “a national resource beyond the stage. See if your organization has expertise that would benefit other organizations doing similar work. You may be able to barter for services with organizations from which you also have something to learn.
18. Tear down bureaucracies that interfere with the creative flow of ideas. According to the McKinsey Quarterly article, Leading Through Uncertainty, organizations need to be more flexible, more aware, and more resilient if they are going to survive. In order to do this, organizations must be nimble and free of bureaucracies that impede innovation. For many organizations, tearing down bureaucracies can be a huge cultural shift. Managing this kind of change can be difficult, particularly in uncertain times. Here’s how to do it without losing your mind.
19. Leverage your social networks to accomplish more. Nonprofits can’t do it all on their own. More organizations, even large, complex ones like the Mayo Clinic, are turning to their social networks for help.

More resources on social media in the nonprofit sector can be found at Beth’s Blog by Beth Kanter.

Also, see: Six Ways to Make Web 2.0 Work from McKinsey.
Determine what social networking tools are most suitable for reaching your supporters. Survey your stakeholders to find out which social networks they're in. Test different tools to build your networks.
20. Mobilize everyone in the organization to help market its mission, message, services, and other needs. When the Charleston Symphony Orchestra was facing a huge budget crisis, the organization enlisted its staff, board, and musicians to reach out to the community. The Chronicle of Philanthropy article, Changing Its Tune, tells their story.

Another great example shows how a natural history museum used marketing to increase attendance at their annual event from 60 people to 1,087 the following year.
Have staff with marketing experience train the other staff in basic marketing techniques. Match the skills of your staff and supporters with one of these key four roles in fundraising and marketing campaigns. Also, share with them this list of characteristics of a good nonprofit sales person.
21. Take a more entrepreneurial approach to accomplishing your mission. You may want to consider starting a for-profit subsidiary. Join a conversation with other nonprofit social enterprisers at the Social Enterprise Alliance.

Determine your organization’s readiness to start and maintain a business venture by answering Rolfe Larson’s 11 Questions to Ask Before Considering a Business Venture.

22. Link with a complementary organization to bring new resources into the organization. The Experience Corps program is a win-win arrangement. In this program, Volunteers of America-Minnesota trains tutors, ages 55 and older, to help kids read. Elementary schools get trained tutors and in return, provide meaningful volunteer experiences for older citizens. Search for organizations that offer different services but share a common vision for the community. See if they want to partner, and if so, bring groups together for a brainstorming session.

 

Related Resources
See various resources and tools on this topic: Opportunities in Lean Times.

Consulting services:
Fieldstone Alliance consultants help funders and nonprofits plan and navigate changes in strategy, structure, and operations. Our expertise includes strategies for weathering lean times and developing longer-range alternative revenue sources. For more information, please contact Sandy Jacobsen at 651.556.4504 or sjacobsen@FieldstoneAlliance.org.

 

Best Regards,

Sandy Jacobsen and Stephanie Jacobs

May 6, 2009

 

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