News & Views

A blog for those interested in what affects, motivates and drives the New York City Nonprofit Sector — written by CRE’s crackerjack consulting team. We hope you use this space to share your thoughts, ask questions and engage in conversations about our city, social justice and the nonprofit sector.

Paying the Piper or Capacity Costs

by Valyrie Laedlein - Today I feel compelled to use this forum as a soap box -- to express my dismay with what seems an incongruous set of assumptions that are embedded in a critically important program being launched by our Federal government – assumptions which should concern all nonprofits.

Community Resource Exchange, like most nonprofits, must often accept the terms handed to us by funders.  Then we scramble to achieve intended results within financial and time constraints, on time and within budget – against all odds.  It is no surprise to anyone who operates in this sector that, as a result, each day becomes an adventure in achieving the near impossible. 

For better or worse we have grown used to this. 

For this moment, however, in response to a recent “Notice of Funds Available” (aka NOFA) from the Federal Corporation for National and Community Service (CNCS), however, I want to shout, “STOP THE MADNESS.” 

To its credit, the CNCS has:
o Recognized the importance of small and mid-size nonprofit organizations in making change at the community level;
o Recognized the need to provide capacity-building support for these organizations; and
o Shown the foresight to see that meaningful performance management systems are key to assuring that nonprofits get results for their communities. 

For this initiative, the CNCS is focusing on improving nonprofits’ impact on:  educational outcomes; health; the environment and clean energy; veterans and their families; and economic opportunities for economically disadvantaged individuals.  These are important issues.  Results in these areas are more critical than ever before.  Performance management systems are fundamental to effectiveness.  No arguments here. 

Meanwhile, here at CRE, we have increasingly been working with organizations in and around New York City in developing the critical components of such systems.  We know what it takes: 
o a theory of change;
o identified and clear outcomes;
o logical work activities that will lead to those outcomes;
o meaningful indicators; and
o timely and usable data – at the individual and organization levels - that allow you to examine performance and adjust your program and approach, as needed. 

All of these are components of a performance management system that can equip a nonprofit to get results.  And for those of you who have put these components in place, you know that it takes more than a workshop or two to pull it off.

That brings me back to the NOFA.  The CNCS has designed a Nonprofit Capacity Building Program that will “increase the capacity of a small number of intermediary grantees to work with small and midsize nonprofits in communities facing resource hardship challenges to develop and implement performance management systems.”  Sounds like just the kind of support for community-based organizations that my colleague Louisa Hackett was advocating for in her post earlier this week and that CRE has increasingly been working on with our client organizations. 

I opened the NOFA announcement with enthusiasm and read affirmation of all that CRE has been working on with its clients.  Then, on page two, I read criteria #2 which stopped me in my tracks: 

“Assist both a large number of small and midsize nonprofit organizations within a geographic service delivery area and demonstrate impact. The Corporation is interested in the extent to which the intermediary has the capacity to both assist a large number of nonprofit organizations within a service delivery area, relative to the proposed amount of the grant, and can demonstrate progress on the key indicator of success,” e.g., implementation of performance management systems.

Implementation of systems.  Good indicator.  Measurable, relevant, achievable.  But not achievable as a result of group workshops or distribution of “how-to” manuals or other “light touch” interventions.  Just as impact on the education system is not achievable without sustained and comprehensive efforts.  Just as long-term health outcomes don’t result from a single ad campaign. 

We have people outside our sector who have become very certain of what we need to achieve – outcomes -- which we’ve known all along.  They’re even getting a sense of what will contribute to achieving it, such as performance management systems.  What they don’t get – or are unwilling to face – is that capacity costs.  And while the “small and midsize nonprofits in communities facing resource hardship challenges” are probably the most likely institutions in our society to be able to reach those most in need of education, health and economic outcomes, those small and midsize nonprofits are also the least capable of implementing the internal systems to assure success without adequate investment in their capacity.  For that matter, Fortune 500 companies can’t attain results without such investment.  Society has just become accustomed to our sector achieving the near impossible on little more than a dime.


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