Growth of Youth-Serving Organizations
Report on the Bridgespan Group white paper commissioned by the
Edna McConnell Clark Foundation
What can nonprofit organizations expect as they aspire to expand their programs? And, more particularly, what challenges and opportunities do these organizations confront when they attempt to grow larger and expand their services?
For five years, the Edna McConnell Clark Foundation (EMCF) and The Bridgespan Group have been working together to strengthen organizations in the youth-service field. Through its grant-making, EMCF helps high-performing youth-serving organizations develop and then implement growth plans designed to allow them to provide their services to more and more young people from low-income backgrounds. Bridgespan, through its work with EMCF and others, helps high-performing nonprofits develop strategies for increasing their social impact, while building knowledge to share with the broader nonprofit sector.
In early 2004 EMCF commissioned Bridgespan to study and explore growth in U.S. youth-serving organizations: its prevalence, the factors critical in shaping how organizations grew, and the major consequences of their growth. The goal of this effort, which ultimately produced ”Growth of Youth-Serving Organizations,” a white paper and profiles of 20 organizations that had grown very quickly, was in part to help both organizations be more effective in their work – but also to help other organizations, their leaders and their funders to be more effective.
While far from a full picture of the dynamics of growth, the study confirmed that any youth-serving nonprofits attempting to grow should be prepared for a roller-coaster ride. Just as important, “Growth of Youth-Serving Organizations” found that organizations willing to navigate the path to growth can emerge larger and better staffed and structured; yet still struggling to maintain sufficient funding to ensure long-term viability.
The key observations from the study spanned a range of topics, from growth as a strategic choice to the financial consequences of growing to performance measurement. Several concerned the organization-specific consequences of growth. The need to “professionalize;” that is, to significantly formalize and/or upgrade, staff roles and systems as the organization grew was a recurring theme. Also, almost without exception, the study participants each reached a point where passionate commitment and sheer will were no longer sufficient to enable effective organizational functioning. And, in addition to creating new internal processes and procedures, many of the organizations found that the role of their boards had to be revisited.
Evolving leadership roles: Enter the COO
The organizations commonly found that as they grew, the demands of daily operations coupled with the need to interface and communicate with the board and external constituencies – the public, funders, partners – simply overwhelmed the capacity of even the most tireless leaders. Recruiting a chief operating officer, or conferring a senior staff member with COO-like responsibilities, commonly freed the chief executive to carry out the roles only they could perform, such as fund raising, board development, and building other strong external relationships.
As Bridgestar discovered in profiling chief operating officers for the March and April 2005 issues of Leadership Matters, finding the right person and truly assimilating them into the organization are prerequisites for benefiting from a COO’s skills. Articulating the role clearly, and explicitly dividing responsibilities between the leader and COO, was also challenging for the 20 organizations studied. Trust, communication and “ground rules” tended to be critical ingredients for success. The more explicitly and consistently the organization’s leader yielded decision-making authority and reinforced the ground rules around how decisions were to be made, the better able the COO to perform the role effectively. When the pairing worked well, the COO could provide a balance to the visionary drive of the leader, producing the combination of inspiration and implementation needed for success.
But sometimes the organization found that enabling the chief executive to relinquish this measure of control was not enough; that the leader was not the right person to take their own organization to its next level. When the leader was also the founder, the transition could be especially difficult. However, if handled gracefully – which could mean thoughtfully keeping the founder engaged – the transition could set a powerful example.
Adding formal systems and specialized skill sets created more professional organizations – and internal stress
Many organizations, making the explicit decision to enhance the quality of their programs in order to grow, had to create or upgrade management positions. Ensuring professionalism in human resources functions (recruiting, hiring, training, compensation and benefits management, and performance management), which have both an internal and an external face, became a higher priority. Adding development and financial staff with specialized skills and knowledge was a way in which the organizations met the challenge of increasing and diversifying their sources of funding – as well as improving their reporting capabilities. Growth also created the need for new, more responsible middle-management roles.
Some staff members experienced the organizational changes as positive ones, affording them greater responsibility and opportunity. For some, however, the changes took their toll. As often happens, even talented people who are inexperienced managers found the adjustment difficult and sought support and guidance. Certain employees – at all levels of the organizations -- were not willing to stay as their organizations became more standardized and structured. Change was particularly painful when existing staff did not have the skills and capabilities required to meet evolving needs.
Redefining the role of the board and its members
Growth affected the boards of the organizations as profoundly as it did the staff. At virtually all of the organizations, the board was already in the process of moving away from a hands-on, programmatic role to one that emphasized fundraising and governance – or had already done so.
This transition to new responsibilities also required changes to boards’ structures and compositions. Managing these changes gracefully was also challenging – and time-consuming, especially for the leader.
But not all of the organizations experienced radical, overnight board change. Some experienced incremental changes, including explicit conversations with members about new and more ambitious fund raising expectations as well as broader roles in fiscal and strategy oversight.
Conclusion
Growth is not for every organization, and the road to growth is a bumpy one. Leaders of growing organizations, in addition to managing the financial pressures and ceding many of the operational responsibilities, must seek to attract and develop strong teams both willing and able to tolerate the roller-coaster ride. To do so while maintaining quality, morale, and a clear sense of vision is no easy feat, but the 20 organizations profiled in this study offer a source of both inspiration and ideas to take on the challenge.
Growth of Youth-Serving Organizations
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