Change is a constant in nonprofit organizations. This makes the readiness and ability for change; the capacity and preference for change, and the understanding of leading change factors and how those factors are influenced critical strategic issues for organizational decision-makers in the 21st century.
Overview of decision-making in nonprofit organization
Nonprofit organizations are institutions that achieve their goals of impacting society by utilizing their revenue surpluses in programs and services instead or distributing them as profits. In the nonprofit field, all surplus revenues are used to retain the organization through self-preservation programs and services. Because nonprofit organizations are maintained by the qualities of their programs and services, decision making surrounding those are done by top members such as board of directors who control the direction of the mission and vision of the organization.
Decision making in nonprofit organization can be strategic and operational. Unlike most traditional for-profit organizations, nonprofit organizations decision making are not focused on any underlying profiting making motivation but rather made with the focus on meeting the desires of donors and addressing the plights of the constituents served. Although the operational decision making related to dispensing programs lie outside the board of directors' involvement but within the realm of the executive directors, his/her structure, and system necessary to meet the goals set for each services set by the board of directors, strategic decision making process are usually undertaking through a concentrated process at the level of the board of directors and are focused on undertaking programs and services that further the purpose for which the organization has been formed.
The operational decision making related to dispensing programs lie outside the board of directors' involvement but within the realm of the executive directors, his/her structure, and system necessary to meet the goals set for each services set by the board of directors.
Major change factors
The major factors influencing change in the nonprofit organization remain the same across the field regardless of the services or programs provided.
Most of those factors include the local political agenda and prevailing policy priorities of the location of the services; the plights and conditions of society or a specific community, and the role of technology in both fundraising and outreach to constituents regarding a given cause.
Nonprofits do not have the traditional industrial focus and so are different in a number of respects with a major discriminant being the lack of any economic motivation. There are more operational orientations to nonprofits’ decision making process than strategic.
This is because nonprofits are heavily concentrated on operations decision than strategic primarily because their work is directed towards execution and efficiency.
Things that influence execution such as
governmental and political oversights of the location of program services,
the needs of the local people to be served by the organization,
the funding and political supports for the mission of the overganization
the level of interface and streamlining process or steps to acquire the service, and
the awareness surrounding the services are factors that impact decision making in nonprofit organizations.
Given the fact that nonprofits are mission-driven, cultivation of dedicated professionals who belief in the mission of the organization are also important in the operational decision making process.
Conditions and Needs affecting decision making
The 21st century comes dispensing with it a number of macro-environmental conditions ranging from political, economic, social, technological, environmental to the legal landscape in which the organization operates.
One often overlooked condition that affects and demands decision making is the cultural phenomenal of the locale in which the service is provided.
Decision makers in nonprofits must be able to:
respond to the needs for both policy movers and other program stakeholders and to
integrate their knowledge of their organizational needs into producing quality system and program outcomes that serve to uphold the desired integrity of the organization and its board of directors.
sell the projected benefits of a new program service line, or
show evidence of quality impacts of existing programs in terms of how the organization help the community and the society as a whole.
Tips for Approaching Change
Respond to change in a wholesome manner with focuses on the direction of the field, understanding the aftermath of the given issue including external policies and the disparities its creates.
Respond to prevailing issues as well as the determination to respond to the overall change within the organization with the ultimate goal of satisfying clients and donors requirements.
When responding, ensure to:
Establish clear definitions of program goals with measurable outcomes for each service and department
Lead by fostering and maintaining an environment of innovation and a culture of adaptive agility
Gather and use input from multiple sources, including clients, families and the communities, staff and partners including government, academia, the Board of Trustees, and external opinion makers.
The ultimate results of the operational decision making must:
Promote service goals and foster an holistic approach to community development or mission implementation
Involve service beneficiaries, and direct community stakeholders in understanding and responding to the relevant change
Encourage changes and prevents problems from emerging in the first place
Engage in practices that have proven and evidence based results
Monitors the process of service delivery, program implementation, and the progress of those served
Decision making process: to share (distributed) or not to share (concentrated)
Most nonprofit social service organizations engage either in a concentrated or distributed decision making process at various levels of the organization considering how vast and numerous it’s outputs—i.e. programs and services—are.
A concentrated decision making is the process whereby the vast majority of the decision making responsibilities lie with senior leadership including the board of directors while a distributed decision making process allocates decision making responsibilities throughout the organization to various heads of the program sectors.
Reasons to consider before adopting concentrated or distributed decision making:
High Performance Syndrome: Most organizations have an inherent fear of failure and rely on this fear to drive performance. Adversely, such a fear prevents a competent and broader group of taff from being trusted to make departmental decisions.
The wise few: Organizations adhering to the idea of "the wise few" feel that the fewer the people entrusted to make decision the easier it is to make and reach a decision. What this results into is that qualified and rightly placed individuals get excluded from the decision making process which overtimes result to depict that their experience and insights matter less. The long term effect is a resulting attrition and job dissatisfaction. Given the mission-driven nature of the nonprofits, increased job dissatisfaction and attrition are counterproductive to operation.
Recommendation for the 21st Century nonprofits management
Uncertainty around decision making can lead to inefficiency and ineffectiveness. People can become discontent overtime when they are systematically excluded from contributing to the decision making process.
Develop guidelines around what types of decisions that sector and department heads can make and identify all the criteria on what decisions emanating from department can center on.
Some of those criteria can be based on how they answer such questions as how the decisions (is):
Fit with Mission, Vision, Values
Impact on beneficiary
Appropriateness to the culture
Impact of change agenda on organization (structure etc)
Level of support for the option (internal and external)
Break-even point (in years)
Sustainability (years to receive payback after break-even)