Both the external world surrounding the nonprofit sector and the internal workings of charitable organizations are becoming increasingly more complex, uncertain and dynamic. With donors, funders, stakeholders and the general public demanding additional levels of accountability and transparency, nonprofits are under continual pressure to innovate, to capitalize on emerging opportunities, and to embrace strategies that produce measurable results.
The adaptability to rapidly changing technology, the ability to network effectively, and the courage to re-invent the organization when necessary are all components of effective, meaningful impact. And these are just a few of the topics raised in a new guidebook for nonprofit leadership in which YPTC Partner Jennifer Alleva has co-written a key chapter.
Social Innovation and Impact in Nonprofit Leadership is now available on Amazon and Barnes & Noble from Springer Publishing Co. Edited by Tine Hansen-Turton, chief strategy officer for the Public Health Management Corp. and executive director of the National Nursing Centers Consortium, and Nicholas D. Torres, co-founder of the Philadelphia Social Innovations Journal, the book’s 13 chapters and 266 pages feature 44 noted national and Philadelphia-area authorities on performance management.
Alleva’s chapter, “Nonprofit Accountability, Transparency, Governance, Fiduciary Responsibilities, and Ethics,” co-written with Torres and Jill M. Michal, addresses the age-old question of how a nonprofit knows whether it is doing good and the importance of sound financial systems as a foundation for such impact.
“Had the realities of the nonprofit sector and national economy not changed, it is probable that the debate over how to measure value and impact while ensuring maximum investment returns would have continued unnoticed. The field, however, is changing, and nonprofit funding is increasingly taking the form of investment in organizational impact. Good stories are no longer enough; organizations need to become outcome-driven and accountable to investors,” she writes.
FOCUS ON IMPACT, NOT NUMBERS
She argues that social service organizations should no longer be activity-driven or focused on “how many?” questions – how many meals were served, how many children attended the after-school program. Rather, they should implement meaningful evaluation systems. Moving an organization effectively toward excellence in financial management is “the cornerstone of nonprofit accountability, transparency, governance, and ethics,” she writes.
“Donors may be attracted to a charity by the emotional content of its marketing or by the results of its services, but if the fiscal infrastructure is unsound, those programs and services will not be credible or sustainable.
“Financial management systems need not be unnecessarily complex or expensive—in fact, sometimes the simplest solutions are the most effective. Failure to provide these systems, however, is an immediate red flag for auditors, donors, grant-making institutions, the general public, and the communities being served,” she adds.
Alleva’s chapter demonstrates the interconnectedness of accounting, reporting, analysis, planning, and internal controls. She presents departmental models and specific techniques that even the smallest nonprofit can implement. She identifies conditions which can lead staff, management, volunteers, and board members to take advantage of a nonprofit through fraudulent behaviors.
Other chapters address such topical issues as: evaluating organizational impact and outcome measurement; best practices in convening and leading the social sector; generational leadership; nonprofit sustainability and funding models; marketing and communication; navigating fiscal crises and government contracting; and advocacy strategies for policy change.
“The entire book is about the new atmosphere the nonprofit world is working in today. More and more donors and foundations are seeking social innovation and the assurance that their dollars are being invested wisely. They want to see measurable impact and the tracking of results. They want to know that the nonprofit understands what outcomes it wants to achieve and that it can communicate that vision to its donors, funders and stakeholders,” says Alleva.