Balancing a Nonprofit’s Two Masters: Mission and Money

Posted on by Laura Otten, Executive Director, The Nonprofit Center at LaSalle University

Boards exist to protect and steward the promises of the mission. As the protectors of public trust, it is up to boards to make sure that these mission promises, stated and implied, are kept. And yet, I am so often struck by how rarely board members use this essential element as their guide for decision making.

Using the mission as a guide is not something that can be assumed—and yet that seems to be the case, more often than not.  A recent conversation with the board of a school illustrates this. When asked how well the mission acts as a compass in guiding decision making at board meetings, the response was a lukewarm, “We all know what the mission is…. ” When I pushed and asked to be told the mission, I got bits and pieces. What was happening, as I assumed and feared, was that they knew the mission as parents, but not as board members. When sitting around that board table, they were no longer parents; they were independent board members charged with ensuring the delivery of the full array of promises put forth by that mission.

Just what are you doing to ensure that the full and true mission is front and center in all board discussions? It is really guiding the board’s decision making?  Failing to ask the question—and ask it constantly—of “how will x help/hurt/divert us in fulfilling this mission?” is what takes organizations down the slippery slope of mission creep. It is the board’s job to prevent that from happening.  Here are some easy suggestions on how to do that:

  • If you use table tents to identify each board member, put the mission statement on the blank side that faces the board member.
  • Print the mission statement at the top of the agenda.
  • Have laminated placards with the mission statement at every board member’s place.
  • At the start of each discussion, the board president (or whoever is running that meeting) should make the statement: “As we discuss this question, let us constantly be asking ourselves, “How does this impact our ability to deliver on our mission?”
  • Before a final vote is called, the board president should, again, remind people to consider how their vote will impact delivery of the mission.
  • Start each board meeting with a mission moment—or several.  A mission moment is a short ( 3-4 minutes) story that a board member tells of what s/he did since the last board meeting to help push forward the mission. It could be about a planned meeting with a donor or a spontaneous conversation with a friend or stranger, about the organization, or any variety of activities.

And I am sure many of you have suggestions of your own, which would be great to share in a comment, below.

The suggestions above are more about raising awareness and offering reminders than necessarily about transforming behavior.  To achieve that, look to the mission/money grid.

We have two masters in the nonprofit sector: mission and money. Too many nonprofits think only of the former, doing so at their organization’s peril. Focus on mission with no attention to money leads, eventually, to an organization’s constant struggle to survive, at best, and to its demise, at worse. Focusing on the latter – money at the expense of the mission – leads to mission creep and a chasm between what an organization says it exists to do and what it actually does. This, too, can lead to eventual demise. With these two masters, it isn’t a competition but a “how do we live comfortably together?”

The mission/income grid is a great learning experience for board and staff to do separately or together. Then, going forward, it serves as a great framework for programmatic decision making. This is a simple two by two grid, with mission as the x-axis and money as the y-axis.

The purpose of this exercise is to plot each program or service that an organization offers in one of the four quadrants. (Programs and services are those things an organization provides to fulfill mission – or so it is intended. Programs and services do not include fundraising events which are intended to raise money to use to provide programs and services.)

Quadrant I:

This quadrant is only for programs/services that are a 100% fit with the mission and bring in “good” money. There is no wiggle room on the question of mission fit: to be identified as 100% mission fit means that there is no question that the program/service directly helps further the organization’s mission. “Good” money means that the income generated—whether the income is raised or earned—minimally covers the true costs of providing that program/service. True cost reflects all of the real costs needed to do the program/service, from salaries to share of overhead to fundraising cost (if raised money is involved), etc. In the ideal world, 100% of the programs and services that an organization does would land in this quadrant.

Quadrant IV:

In this quadrant are placed programs that neither fit the mission nor bring in good money. Perhaps surprisingly to some, nonprofits frequently have programs/services that must be plotted in this quadrant. Nonprofits are too frequently loathe to get rid of programs that they have been historically offering, and so things are done, year after year, despite the lack of fit and ability to cover expenses. A healthy nonprofit should having nothing in this quadrant.

Quadrant II and III:

Quadrants II and II are the “balancing” quadrants. Quadrant II is for those programs/services that do not fit with the mission but do bring in good money, while Quadrant III is the reverse: the program/service absolutely fits with the mission but does not bring in good money. Programs/services plotted in these two quadrants could balance one another out.

If we were to rank outcomes, here’s what we’d like to see.

  • Ideal: everything honestly lands in Quadrant I. Truth be told, this may not be realistic.
  • Next best: everything lands in Quadrant I and Quadrant III where the programs have mission fit, but are not bringing in good money. If an organization is lucky, some of the programs/services in Quadrant I are making sufficiently good money that they actually bring in a profit, which can offset the loss of items in Quadrant III.
  • Next best: everything lands in Quadrant I, Quadrant III and Quadrant IV (the program is not a mission fit but is bringing in a strong profit).
  • There is no next best!

While there is never a bad time to do this exercise, it is ideal to do it as part of the “data collection” work that happens in a strategic planning process. Done as the pre-work to planning, it identifies some of what the plan should address, such as how to get rid of programs/services that landed in Quadrant IV or the exploration of alternative business models to move programs in the upper half of Quadrant III closer to or, even better, into Quadrant I.

But the use of this mission/money grid should not be a once and done exercise. It should be a living document and be integrated in the decision making process of the board and staff. For example, before an idea for a new program gets kicked too far down the road, the program should be plotted on the grid. No new program should be started that doesn’t fall in either Quadrants I or III. The proposed business model for items that land in Quadrant III should be carefully studied to determine if the model allows for eventual good money. Boards must carefully consider this in making a decision to invest in the start of a new program. At the same time, where a program is plotted in the grid should be another factor boards consider in identifying what programs might need to be cut and which could benefit from expansion. And knowing where a program falls on the grid can help staff understand why some programs, such as those that fall in the top half of Quadrant III, might have more money allocated to them than others, such as those programs that fall to the far half of Quadrant II.

It is imperative that the mission be the compass for an organization, but not in a financial vacuum. The analysis from the mission/money grid allows a board to identify its current position and lead an organization to a proper balance. Going forward, it must protect that balance.

Laura Otten is the Executive Director at The Nonprofit Center at LaSalle University. She is also a faculty member of the Dodge Technical Assistance Initiative. Find out more about our nonprofit capacity building workshops here.

This entry was posted in Technical Assistance and tagged , . Bookmark the permalink.

One Response to Balancing a Nonprofit’s Two Masters: Mission and Money

  1. […] you’ll get good implementation. Was there active participation from both board and staff members? Did you assess the balance between mission and financial effectiveness of each of your programs? Did you investigate challenging and interesting questions about the future of the […]

Share Your Thoughts

Search the Blog
Subscribe
Categories
Recent Posts