Make Smarter Decisions Starts by Defining Your Nonprofit’s Decision-Making Process
Defining your nonprofit’s decision-making process will help your leadership make more strategic decisions aligned with your forward direction.
In one of my recent articles, I dove into the topic of strategic planning. Specifically, how to know when your nonprofit is ready for a strategic plan – and when it isn’t.
This month, I want to take a step beyond the single decision of whether to develop a strategic plan and discuss your nonprofit’s overall decision-making process. After all, what good is a decision one way or another if the way in which you make decisions isn’t strategically aligned with where your organization is headed?
The Art and Science of Decision Making for Nonprofits
Making decisions about what’s best for our organizations is hard. I’m sure you’ve experienced the need to make some tough calls in the past. Decisions around legacy programs, financial sustainability, and organizational structure are some of the most common topics I’ve found to cause conflict in the minds of nonprofit leaders.
Here’s a little secret about decision-making. The decisions you make for your organization are not intrinsically ‘right’ or ‘wrong.’ The right or wrong decision can only be considered and determined once you’ve first established your decision-making criteria. And those criteria always come back to the forward direction you envision for your nonprofit.
Too Often Organizations Assume the ‘Right’ Decision is the Financially Driven Decision
When leadership within an organization is unclear in their decision-making process, the default is almost always to resort to financial decision-making criteria.
Don’t get me wrong; the financial impact of an endeavor is important to consider. But decision making for nonprofits needs to consider more than whether the result will cost money, save money, or make money.
Good decision-making goes way beyond that.
Nonprofits Exist to Create Impact. So, Too, Should Their Decision-Making Process
I recently began working with a client who was presented with several opportunities for expansion. They had a decision to make; to choose the opportunity that would give them the most thoughtful and strategic approach to growth.
This organization started where most nonprofits do. They immediately jumped in and considered how each opportunity would impact three criteria: staffing, financials, and business modeling.
Through our work together, though, we identified three other equally meaningful, criteria:
Decision-Making Criteria #1: History of the Organization
First, we looked at the history of the organization. We poured our efforts into researching the organization’s roots, its origin story – its core purpose. We looked at how it had responded to critical moments in time. For instance, what leadership qualities existed that enabled past executive directors to succeed, even in tough times? We also looked at what resources were available at certain inflection points.
What we found was interesting yet not surprising. In addition to financial resources, relationships with partner agencies, government officials, and community leaders were central to its success – every time.
Decision-Making Criteria #2: Core Values
I believe that when making any decision, your core values are your north star. More than mission or vision, your core values should guide your organization forward. Mission and vision can shift and look different over time, but it’s an organization’s values that keep it focused and moving forward.
Put another way, core values have a crystalline nature to them, especially when their definition is followed up with an articulation of how an organization sees those values in action.
Going through the exercise of defining core values helped my client better understand how their organization could utilize their values to guide their decisions, both now and in the future.
Decision-Making Criteria #3: Case Studies
Lastly, I asked my client to write case studies from previous decisions that had impacted the future direction of the organization. Going through this exercise helped them gain clarity around what worked, what didn’t, and what lessons they learned about their decision-making methods of the past.
Implementing New Decision-Making Criteria is Easier Once You Make the Decision to Start
After taking a fresh look at their decision-making process, we developed a series of guiding questions and a scorecard that the organization can use to evaluate new opportunities. These tools can facilitate rich conversation among decision-makers and lay the foundation for smart, strategic decision-making.
No matter the criteria, making big decisions often feels complicated and risky. That’s why a reliable and effective decision-making process grounded in your organization’s history, core values, and past decision-making successes will give you the confidence your need to make the right decisions for your organization’s future.
I can’t wait to see how you implement new, meaningful criteria into your organization’s decision-making process. And when you’re looking for support in identifying the right criteria for your nonprofit, my team and I are here.
I look forward to connecting with you soon!
My best,
Dani
About The Author
For the past 25 years, Dani has helped nonprofits at local, regional, and global levels find sustainable solutions to tricky growth and funding issues. She works with leaders and teams to optimize their approach to fundraising, strategic planning, marketing, and more! Dani is passionate about helping motivated people build vibrant and effective nonprofit organizations—so they can make a meaningful impact in the world!