The Missing Link in Nonprofit Effectiveness: Systems and Processes

6 min read

Since we introduced the Nonprofit Impact System earlier this year, we’ve spent a lot of time thinking and talking about what makes some nonprofits effective, while others struggle.

There are many ingredients of a successful organization that can withstand challenges like the never-ending ones 2020 keeps throwing at the sector. A clear focus, strong leadership, and healthy relationships with donors, funders and communities are all top of mind, especially now. But if I had to name just one area that is both absolutely critical to nonprofit effectiveness and commonly overlooked, I’d choose systems and processes.

If I had to name just one thing that is both absolutely critical to nonprofit effectiveness and commonly overlooked, I’d choose systems and processes. Click To Tweet

Systems and processes may not be the most exciting part of nonprofit work, which is probably part of the reason we don’t give them the attention they deserve. But without them, even the smartest, most motivated, most well-resourced organizations fail to make meaningful progress on their missions over the long term. Systems and processes are what keep everyone at your organization rowing in the same direction, toward the most important goals in your strategic plan. They’re also critical for creating accountability to those goals and ensuring everyone is contributing to your nonprofit’s bigger picture impact. That’s why we’ve made systems and processes the core of the Progress element of the Nonprofit Impact System.

So what sorts of systems and processes does your nonprofit need?

The answer to that question varies based on the nature of your mission and approach. That said, there are a few (nearly) universal standard systems and processes that we believe almost every nonprofit can benefit from putting in place. Read on to learn more about each one, and how we recommend putting it into action at your organization

Essential Systems and Processes for Nonprofits

Annual Planning and Reporting, which includes:

Annual Goal and Priority Setting

In the last quarter of each fiscal year, your leadership team should meet with your board (or board executive committee) to review progress over the last year and discuss what your goals and priorities should look like on both an organizational and functional level over the next year. This should be based on the big picture laid out in your strategic plan, which you’ll likely revisit every 3-5 years (though some organizations choose to do a strategic plan annually, which we encourage).

Annual Activity Planning 

Following a session of annual goal and priority setting, your leadership team should share the goals and priorities for the upcoming year with the leaders of each program and department. Program and departmental leaders should then respond by building their own activity plans that lay out the key activities they will need to engage in over the upcoming year to contribute to the organization’s big picture goals. The leadership team should also create its own activity plan since some of the activities required to move the organization’s goals forward will be their responsibility, while others will be the responsibility of individual programs or departments like communications or finance.

Annual All-Staff Update

In the first quarter of each fiscal year, the CEO should host a meeting for the full staff to review progress from the previous year and share the organization’s goals, priorities and activity plans for the next year. Leaders of each program and/or department should then share their activity plans for the upcoming year. Finally, staff should be invited to ask questions or provide input (and ideally they should be asked for input throughout the planning process, as well). 

Annual Impact Reporting 

In the first quarter of each fiscal year, your organization should distribute an annual impact report to all of its stakeholders with updates about progress made on goals and mission over the past year. In years where a new strategic plan is developed, this should also be made available publicly.

Quarterly Checkups, which include:

Quarterly Leaders Meeting

Each quarter, prior to the board meeting, the CEO or leadership team should meet with the leaders of each program and/or department to recap activities completed from the previous quarter, assess performance metrics associated with the organization’s annual goals, and determine if updates are needed to annual plans or longer-term strategic plans as you enter into the next quarter.

Quarterly Board Meeting

Each quarter, the CEO should meet with the board of directors to recap metrics and activities from the previous quarter, update the board on adjustments to the organization’s strategy, and seek input where needed. Each board committee should also provide an update on their committee’s activities.

Quarterly All-Staff Update

Each quarter, following the board meeting, the CEO should update the entire staff via a meeting, email or video on metrics from the previous quarter, adjustments to the strategy, and plans for the upcoming quarter.

Monthly Mission Meetings

Each month, the CEO or leadership team should meet with the leaders of each program and/or department to recap metrics from the previous month, discuss progress against the activities in the annual activity plan, and the work each program and/or department is doing to contribute. In these Monthly Mission Meetings, the group should also work through short-term issues that are inhibiting the organization’s progress. 

Weekly Work Sessions 

Each program and/or department should have its own meeting to work through the current, relevant activities in its activity plan and tackle any issues that are inhibiting progress.

Ongoing Measurement & Adjustment  

Your organization should develop a shared Nonprofit Impact Dashboard where you measure a limited set of numbers that indicate whether you are advancing your most important goals. Each metric should be assigned an owner, and that owner should update the number on a regular basis (at least monthly). This Nonprofit Impact Dashboard can be as simple as a shared spreadsheet, or it can be more sophisticated and pull in data from your other tools and systems. The important thing is to keep it updated and reflect on what it’s telling you regularly, which the other systems and processes above make possible. If you’re off track on certain metrics for any significant length of time, it may be an indication that you need to adjust your strategy. 

Your organization should develop a shared Nonprofit Impact Dashboard where you measure a limited set of numbers that indicate whether you are advancing your most important goals. Click To Tweet

And there you have it

These systems and processes might not feel earth-shattering, but they can make all the difference in your organization’s ability to move its mission forward. Put them in place now and you’re nearly guaranteed to start to build momentum in a way that you haven’t experienced before.

How is your nonprofit doing when it comes to establishing systems and processes?

Take the Nonprofit Health Assessment to answer that question and learn how healthy your organization is overall.

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