“Sustainability” has been a buzzword in the social sector for the past few years, but what does it really mean? Everyone agrees that sustainability is an important factor to evaluate the resiliency of social sector organizations, but few have agreed on a simple path for nonprofits to reach it.
Over the past few years, we have worked together with more than 70 nonprofits from across the country to co-create a straightforward way to achieve sustainability. To distill the concept, we developed the following formula:
High-impact + High-performance Organizations
When I talk about sustainability, I often mention the “flywheel effect,” which was first articulated in Jim Collin’s book, Good to Great. A flywheel – for those, like me, who are not mechanical – is a massive metal disk on a horizontal axle. Think of it like a wheel on a car. The task is to get the flywheel to move and complete a full rotation by pushing it. Then, at some point, the “flywheel effect” kicks in – momentum takes over and you no longer have to push. Its weight is working for you.
For a nonprofit organization to achieve a “flywheel effect,” it must first start with IMPACT.
IMPACT is the bottom line of the social sector and defines why social sector organizations exist and how they make a difference in the lives of their stakeholders and the larger community. Clearly, impact is a crucial first step for any organization’s long-term sustainability. High-impact organizations encourage staff to consistently challenge their work and find new and better ways to serve their clients and stakeholders. To increase your organization’s impact, you can start with our lean startup model, which helps you turn a problem into a sustainable solution. Then, once you have defined the best solution, invest the time to really measure its impact through a well-defined theory of change, logic model and a sophisticated evaluation plan. Evaluation is reinforced when everyone – not just program staff – embraces a culture of measurement for continuous improvement.
Second, now that you have a model that has impact, how do you tell your story so that your BRAND stands out from the crowd? We encourage organizations to follow time-tested principles of storytelling. Remember to focus on your “why” to draw people into your story before you focus on your “who” and “how.” When you get to the “who” and “how,” be sure you have a clear unique value proposition so you can differentiate yourself from other nonprofits. Additionally, once you have your elevator pitch, make sure it gets results by using best practices to help it “stick.” Impact is strengthened by creating a storytelling culture that believes everyone – not just development staff – is an ambassador for the organization’s mission.
Third, for the greatest impact, social sector organizations must be high-performance organizations that prioritize OPERATIONS and REVENUE generation as tools for supporting the organizations’ growth. High-performance organizations consistently invest in learning and continuous improvement. They employ a clear and meaningful strategic planning process, diversify their funding sources and effectively resource key support functions, such as talent management, IT, marketing and financial management. We call these areas “social sector lubricant.” The stronger your support functions, the faster and more seamlessly your organization can move. To increase your organization’s performance, start small by tracking performance through board and staff surveys (by both their importance and satisfaction within your organization) and plotting the results on a 2×2 matrix. Strive for high satisfaction in the most important support functions but also track measurable improvement for all support functions over time. This creates a culture of accountability for the organization and ensures that everyone knows how they contribute successfully to the organization’s mission – whether or not they are on the front line.
Finally, when social sector organizations become high-impact as well as high-performance, they are not only more sustainable, but they also create a CULTURE that attracts better talent for staff and board positions. In addition, they achieve greater recognition for their work. High-impact, high-performance organizations are also bolstered by good GOVERNANCE, provided by a strong board and management team that supports a culture of accountability, inclusiveness, transparency and responsiveness.
Taken together, all these elements create what I and other system architects call a ”flywheel effect,” where the organization becomes stronger over time and creates more impact in the community through its momentum. With each strategic planning cycle, you get stronger (through serious introspection and recalibration) and better able to take on new challenges. To us, this is what sustainability is all about. We would love to hear how you define sustainability and how you measure it within your organization.