Highlights of the 2009 Nonprofit Management Institute

October 16, 2009

This past week, I had the challenging and interesting assignment to travel to the Bay Area and Silicon Valley on behalf of the Economy League. I made the trip for two reasons--the first was to begin identifying key issues that the cohort of 100 business, nonprofit, and government executives will explore during the 2010 Greater Philadelphia Leadership Exchange, the second was to attend the 2009 Nonprofit Management Institute co-sponsored by Stanford Social Innovation Review and the Association of Fundraising Professionals.

The Institute, a two-day gathering on Stanford's campus in Palo Alto, brought together more than 280 nonprofit executives-representing communities as close by as the Bay Area, and as far away as Australia and Ghana -- to discuss innovative ways to structure and grow organizations during these tough economic times. 

The program was action-packed with presentations on a wide range of issues and lots of opportunities to talk to other attendees about their regions, organizations, and how the content of the conference was applicable to their work. Here were some of the highlights:

Stanford Graduate School of Business professor Chip Heath previewed his upcoming book, Switch: How to Change Things When Change is Hard highlighting a metaphor that is featured in his work. He notes that we are all like a rider on an elephant trying to head down a path-where the rider represents our analytical mind, and the elephant is our emotional mind. While we think the rider is in control, if the elephant wants to have his way, he will win out because of his size and power. Heath contends that in trying to make change, one needs to appeal to the elephant rather than convincing the rider. This thesis builds on Heath's work with his brother in their first book, Made to Stick, which posited that there are specific visceral qualities of ideas that enable them to survive and spread, while others fade away into the ether.

Bill Foster, a partner and the head of the Boston office of the Bridgespan Group presented on his research "Ten Nonprofit Funding Models," which analyzed how the largest nonprofits in the U.S. generate revenue for their work (he points out that the models are much different for small and mid-sized nonprofits). Foster noted that while the conventional wisdom is that nonprofit budgets should have diversified funding sources, in virtually all the nonprofits that have gone to scale (which they define as $50m annual budget) 90% of funds come from one source. Foster suggests that if an organization is good at raising money from one particular type of source, their strategy should focus on that source.

When times get tough, talk of nonprofit mergers grow. David La Piana literally wrote the book on mergers--or as he calls it strategic restructuring--in the nonprofit sector. During the second day of the conference, he presented on the range of options--programmatic and administrative--from greater autonomy to full integration that-that nonprofits have if they decide to go the route of a merger. But, he warned of two important things: if the organizations' cultures don't mix, a merger will not succeed; and mergers end up costing more money in the short run, though there is the potential for cost savings in the long term.

The Nonprofit Management Institute closed with what I consider the most provocative presentation for the way we work here in Greater Philadelphia. Heather McLeod Grant from the Monitor Institute presented on Social Change with a Network Mindset. During my week on the west coast, it became clear that the network mindset is a popular strategy in the Bay Area and Silicon Valley. It is characterized by principles of openness, transparency, decentralized decision-making, and distributed action. This method has been used to elect presidents (Obama) and make microfinance loans to entrepreneurs (Kiva), and it's being used by diverse organizations both old and new. 

My mind is still bubbling with these ideas and others that emerged at the Institute. Now the hard part begins-incorporating them into our work at the Economy League and in Greater Philadelphia.

-- Alison Gold, Deputy Director for Strategy and Operations