looking over organizational documents at a table

A Nonprofit Organizational Assessment: How it can Improve your Operation

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Like any organization, nonprofits must adapt in order to continue to serve their mission and their constituents. But, nonprofits sometimes face resistance to change based on their unique mission-driven status. An “originalist” standpoint on the mission might make it hard to convince folks that a new mission is needed; board members who joined during an organization’s early years may be hesitant to change focus or move in new directions; and old understandings about what nonprofits can and can’t do may restrict your ability to be creative in your operations.

Likewise, nonprofits who do not regularly examine their programs and operations may miss opportunities to adapt and improve. Because nonprofits are not usually “businesses” that rely on tough market feedback (products not selling) to understand when they are falling behind, they must be vigilant about seeking other forms of feedback on a regular basis.

Leslie Crutchfield and Heather McLeod Grant made this point way back in 2008 in their book Forces for Good: The Six Practices of High-Impact Nonprofits: “We believe that mastering the cycle of adaptation is critical to success. Precisely because they exist at the intersection between markets and government – which are constantly changing – successful nonprofits must continuously adapt in order to remain relevant” (p. 131-132).

Assessing, adapting, changing, and improving should be key themes at your nonprofit.

Crutchfield and McLeod Grant point out that the impetus for change can come from an external force (the environment changes and an organization must adapt to it) or from an internal source (an organization assesses its programs and realizes it needs to change to meet its goals) (p. 132). 

An organizational assessment can be used to explore one or both of these forces – external pressures or internal questions. It can be an excellent pre-cursor to developing a strategic plan.

What is a Nonprofit Organizational Assessment?

Nonprofits, like other organizations, operate with a number of common structural components. These components typically include things like a Mission Statement, a Board of Directors, an Executive Director, Programs, Staff, and Operations. They share common practices such as fundraising, communications, marketing, and volunteer management.

An organizational assessment basically entails making a list of these structural and operational components and analyzing them – one-by-one – in relation to best practices and emerging practices in the field. It can also mean taking a deep look at a specific component of your work, but it should be a mission-critical aspect of your work. It is not a discrete program evaluation, though those are important too!

In short, an organizational assessment is an analysis of how your organization is functioning. Conducted much like a mixed methods research study, the assessment should start with specific questions or problems in mind and go about answering them through in-depth study of the organization.

You assessment may be conducted in phases in order to be more realistic to your capacity.

group sitting at a table working together

Who Conducts a Nonprofit Organizational Assessment?

A nonprofit can decide if their assessment will be conducted internally or externally, or a combination of these two perspectives. A new Executive Director can be an excellent candidate to conduct an internal organizational assessment. They bring fresh eyes, a desire to learn, and motivation to succeed.

A sub-group of the Board of Directors could also be tasked with conducting an organizational assessment that brings both internal and external perspectives, especially if they bring expertise in assessment and planning. They should not have an invested interest in the audit’s outcomes, so be careful of Board members who resist change or do not fully understand the organization’s mission and values.

If you truly want an unbiased perspective on your nonprofit’s structure, or if you have identified that new ideas and directions are an important goal of your assessment, then bringing in an external assessor can be valuable. An external consultant can also be strategic if you feel that you have an “entrenched” board or a staff that resists change – hearing from someone else might help to open their minds to critical interpretations or new ideas.

If working with an external consultant, be sure to clarify the extent to which you want that person to work in partnership with your staff or board. Are they advising the staff and board as they conduct an assessment? Are they conducting an assessment with little staff input in order to be completely unbiased, or somewhere in between?

Choose someone who has a breadth of experience with nonprofit leadership and governance, as well as talent in planning and facilitation. This person is likely going to need to look across your whole organization, so they should not be a specialist in just one area (unless you really want to zoom in on one set of organizational functions). Instead, a skilled generalist knows enough about all components of a nonprofit to offer valuable feedback on multiple operational questions.

And yes, I’m writing about this topic because this is a service I offer through my coaching services.

How do you Conduct an Organizational Assessment?

A nonprofit organizational assessment can be conducted in a variety of ways – from document analysis to interviews to program assessment and everything in between. There is no “one” way to conduct an organizational assessment, but it should be characterized by asking critical questions; examining taken-for-granted “facts”; and looking deeply at performance.

The chart below explores two frameworks for conducting an organizational assessment through examples – one based on looking closely at your programs and content; and another based on looking closely at your structural sustainability.

The first – a content-based assessment – emphasizes gaining an understanding of whether your programs are meeting the needs of your constituents. It requires a tough look at your mission/vision as well as your programs and the people who run and advise them. It is not just about evaluating one program, but evaluating whether your organization – from a variety of angles – is adapting well to changing needs.  That said, it may not look at all organizational functions.

The second – a structural assessment – emphasizes looking at all of the components of your nonprofits’ structural organization to understand whether and how you can sustain. This type of assessment is about breadth; it forces you to examine how you are “built” and whether that structure is actually going to enable to you to continue to exist. Even if your existence isn’t necessarily threatened, it can help to take the audit as seriously as if it were.

How do you use Results of an Assessment?

The most important thing about doing an assessment is actually listening to what it tells you. Meaningful use of the results of an assessment are what make the assessment worthwhile in the first place. An assessment should result in a report in one form or another – whether that is a memo to the Board, an extensive assessment report given to the entire organization, or a presentation delivered at a staff retreat.

The findings of your assessment should be shared with the Board of Directors, and with relevant staff (as appropriate). Each finding should have a set of possible action steps connected to it.

These findings and action steps can be integrated into a variety of organizational structures. For example, decisions on changes to be made can be incorporated into:

  • Adapted guiding documents (such as mission statements, board policies, etc.);
  • Staff and programmatic work plans;
  • Annual Plans;
  • Strategic Plans.

The key thing is that each finding and connected action step, once determined worthy, should have a follow-up plan to make it happen. Otherwise, the assessment has been a waste of everyone’s time. For the most potential impact, be sure to identify the task to be accomplished or change to be made; the timeline for the change to be implemented; and the key person tasked with seeing it through.

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