Building Capacity at

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Building Capacity at Each Stage of The
Organizational Lifecycle Nonprofit Congress
2008 Convene ? Connect ? Commit
Shelly Kessler Vice President TCC Group
Anne Sherman Associate Director TCC Group
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Introductions TCC Group

• Founded in 1980
• Three offices New York, Philadelphia, Chicago
• Three practice areas
• Nonprofit
• Corporate community investment
• Philanthropy

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Agenda

• Introductions (10 minutes)
• Overview of agenda and objectives (5 minutes)
• Introduction and discussion of the models and
  tools (45 minutes)
• Final questions and wrap-up (30 minutes)

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Session Objectives

• Understanding
• The Four Core Capacities model
• How nonprofit organizational capacity changes at
  the different stages of the organizational
  lifecycle
• How tailored capacity building support is
  necessary at different stages
• Shared experiences of capacity building at
  different stages

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What is Organizational Effectiveness?The
Four Core Capacities Model
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Defining Organizational Effectiveness

• An effective organization establishes and acts
  upon mission-based priorities, sets direction,
  has a clear vision, innovates, and adapts to
  change.
• Organizational effectiveness relies on the leader
  or leaders ability to mobilize the resources
  needed to achieve mission.

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Core Capacities Model
External Environment
Resources
Social and Demographic Forces
Political and Regulatory Forces
Facilities
Human Resources
Organization
Adaptive Capacity the ability of a nonprofit
organization to monitor, assess and respond to
internal and external changes .
Leadership Capacity the ability of all
organizational leaders to create and sustain the
vision, inspire, model, prioritize, make
decisions, provide direction and innovate, all in
an effort to achieve the organizational mission.
Management Capacity the ability of a nonprofit
organization to ensure the effective and
efficient use of organizational resources
Structure
Rituals
History
Time
Technology
OrganizationalCulture
Beliefs
Language
Values
Technical Capacity the ability of a nonprofit
organization to implement all of the key
organizational and programmatic functions
Finances/Funding
Program Design andModel
Economic Forces
Technological Forces
Key Resourcesthe one or more critically needed
resourcesthat most directly support programs and
services
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The Four Core Capacities Model

• Leadership Capacity

Adaptive Capacity
Management Capacity
Technical Capacity
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Leadership and Adaptive Capacities First Among
Equals

• Leadership and adaptive capacities drive a
  nonprofits advancement and are important at
  every stage in the organizational lifecycle
• Management and technical capacity building follow

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Factors Affecting the Four Core Capacities

• Organizational mission, vision, programs and
  services
• The external environment
• Existing organizational resources
• Organizational culture
• Organizational lifecycle

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The Environment, Culture and Life Cycle
Constraints and Opportunities
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The Four Core CapacitiesThroughout the Lifecycle
The Nonprofit Organizational Lifecycle
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The Nonprofit Organizational Lifecycle Model
Leadership Adaptive Management Technical
Sustain
Stage 3
Stage 4
Decline
Community Impact
Grow
Stagnant
Mature
Stage 2
Renew
Stage 1
Infrastructure Development
Dissolve
Begin
Core Program Development
Adolescent
Start
Up
Defunct
T
T
This model is adapted from Susan K. Stevens
Nonprofit Lifecycles Staged-Based Wisdom for
Nonprofit Capacity (Stagewise Enterprises, 2002.)
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Stage 1 Core Program Development

• Mission-based Focus design and implementation of
  core program(s) by visionary, entrepreneurial
  founder(s)
• Characteristics
• Simple programs,
• small, hands-on, homogenous board
• only one or two funders

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Transitional Milestone

• Program staff/volunteers are delivering core
  programs similarly with respect to quantity
  (amount, frequency and intensity)
• Word-of-mouth among the target population has
  begun.

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Stage 2 Infrastructure Development

• Mission-based Focus refinement of
  programs/services through experimentation
  beginning/short-term outcome achievement for
  clients
• Other Characteristics
• Programs more distinct and credible
• Staff grows and becomes more specialized
• Revenues diversify
• CEO focuses on managerial role
• Board expands and formalizes

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Transitional Milestone

• Program staff/volunteers are consistently
  delivering core quality programs
• There are resources to deliver program quantity
  every time to those being served
• Demand for programs is outpacing capacity to
  deliver

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Stage 3 Community Impact

• Mission-based Focus Program achievement of
  expected client interim- and longer-term
  outcomes going to scale with respect to
  program implementation (directly through own
  programs and indirectly through partnering with
  other organizations) such that community impact
  begins and increases over time.
• Other Characteristics
• Programs are established and well-regarded
• Operations and systems are formalized
• CEO is professional manager
• Hierarchical staff structure
• Board focuses more on policy, planning, and
  fundraising
• Diverse and stable revenues

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Transitional Milestones for Continued Maturation

• Program staff/volunteers are consistently
  improving the quantity and quality of service
  delivery based on formal learning processes
• Resources exist to deliver better program
  quantity and quality every time to those being
  served
• Community impact is achieved through programs
  and partnering/alliances.

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Stage 4 Stagnation/Decline

• How to Know if Your Organization is Stagnating or
  Declining
• Outcomes and demands for services plateau
• Decrease in donor /funder interest
• Less interest from partners
• Clients report diminished quality of program

• Complacent and in denial about stagnancy
• Out of touch with market
• Staff fragments into fiefdom
• Systems become red-tape
• Chasing dollars and poor financial control
• Stale leadership

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Reversing Stagnation

• Mission-based Focus
• Re-examine if and how to make programs relevant
  to the community, again through program
  innovation/change,
• Return to a level of high-quality,
  outcome-focused programs/service (go back to
  growth stage).
• Or
• Decide to dissolve (through closing and/or
  merger) and pass along program resources/assets
  to other organizations in the community.

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Common Capacity Building Efforts by Core Capacity

• Leadership
• Board Development, Executive Coaching,
  Leadership Succession, and Transition Planning
• Adaptive
• Organizational assessment, Strategic Planning,
  Evaluation, Partnerships and Strategic
  Restructuring, Needs Assessment, Long-term
  Financial Sustainability
• Management
• Development of HR function, Strengthening
  Internal Communications, Financial Management
  Systems and Training, Volunteer Management
• Technical
• Skills Building for Program Delivery,
  Fundraising Training, Accounting, Technology
  Upgrades, Facilities Planning

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Common Capacity Building Efforts by Lifecycle
Stage

• Start-Up/Core Program Development
• Needs assessment
• Establishing a board
• Get the right space set up basic office systems
• Adolescent/Infrastructure Development
• Strategic planning
• Improve financial management systems
• Revenue diversification
• Focus on growth (programmatic or administrative)

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Common Capacity Building Efforts by Lifecycle
Stage (Continued)

• Maturity/Community Impact
• Document and disseminate program impact
• Leaders increasingly focus on external roles
• Focus on building bench strength
• Stagnation/At Risk of Decline
• Coaching and/or peer mentoring for leadership
• Adaptive capacity strategies (e.g., planning,
  assessment, evaluation) that would support
  renewal
• Executive search

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Discussion and Wrap Up
Contact Information

• Shelly Kessler
• Vice President
• TCC Group
• One Penn Center, Suite 410
• Philadelphia, PA 19103
• Tel [phone], ext. 203
• Fax[phone]
• skessler_at_tccgrp.com

Anne Sherman Associate Director TCC Group31
West 27th Street, 4th fl      New York, NY
10001Tel [phone], ext. 243 Fax 212 949
1672 asherman_at_tccgrp.com
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