Sometimes it becomes obvious that the old way of doing things is no longer sustainable. Recognizing that fact can sting, but it’s a lot easier than actually doing the work required to set your nonprofit on a new, more effective path.
“It’s difficult for nonprofit organizations in particular to pivot from what has been done in the past” to a new way of doing business, because of a commitment to the work and a belief in its effectiveness, said Leslie MacKrell, manager at The Bridgespan Group, a nonprofit consultancy that advises charities.
But it is possible. Bridgespan recently worked with College Summit—a nonprofit that prepares low-income high school students to enroll at universities—to retool its programs and make it more cost-effective and attractive to potential clients.
Below are the steps that Ms. MacKrell and Michelle Tafel, College Summit’s chief innovation officer, recommend nonprofits take to make a change in strategy successful.
1. Get into the right mindset.
Approach the process of creating a new business model with an open mind, positive attitude, and willingness to learn, Ms. MacKrell and Ms. Tafel advise. That means sticking to your mission, but being flexible in how you execute it.
“It certainly takes courage to examine your [business] model, the landscape in which you work, and the impact you have achieved to date with really clear and fresh eyes,” Ms. MacKrell says.
2. Do the research.
Before making big changes, confirm what you think you know and find answers for what you don’t. Identify the resources your nonprofit has in abundance and rely on those, rather than on scarce resources, Ms. MacKrell says.
College Summit and Bridgespan did market research to determine the price potential clients would be willing to pay for the former’s college application preparation programs. They also conducted surveys to find out which services customers valued most.
“Simultaneously look inside your organization for your core competency and look outside your organization to ensure you address the biggest need or demand,” Ms. Tafel says.
3. Get leadership support.
A major change in activities is only possible, Ms. MacKrell says, “if the senior leadership are fully supportive and believe in the promise of this shift.” That means board members and top managers have to be “aligned in their understanding of the need for change.”
4. Explain the change internally and externally.
The key to convincing employees, donors, and clients that the pivot is needed is to maintain a “laser focus”on the long-term goals these changes will accomplish, Ms. MacKrell says. Clearly explain why the change best serves the mission and reinforce to people that “the opportunity cost” of maintaining the status quo is unacceptably high. For example, College Summit’s programs were getting too expensive for high schools to afford, so it couldn’t expand to serve more students without revising its offerings to cut costs.
5. Accept that some people will be unhappy.
No matter how well you explain the new plan, some stakeholders won’t like it. That’s just part of the change-management process, Ms. MacKrell says.
But you can learn from the criticism, Ms. Tafel says, and she recommends taking it seriously and incorporating the feedback into the new plans.
“The biggest breakthroughs come from the most challenging trade-offs—spend time in uncomfortable conversations,” she says.
6. Keep staff members involved.
Management decides to shift direction, but employees are the ones who have to make that shift happen every day. Keeping them involved in the process can help ensure the transition occurs smoothly.
College Summit purposely waited to define some of the details of its new program until it could consult staff members during its employee retreat, so that they could help with the program design, Ms. Tafel says.
7. Seek a bridge investment.
Even a new strategy designed to cut costs may require additional money to carry out. Look for grants that support innovation or capacity-building, or seek donors who may be interested in making gifts that could change your nonprofit’s trajectory.
“For organizations that want to do this hard work of cost-innovation, often a one-time or bridge investment is needed,” Ms. MacKrell says.
Send an email to Rebecca Koenig.