Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

September 30, 2013

Increasing your funding: A more effective organizational approach

Martin Lattman

Special to Philanthropy Journal

In today’s increasingly competitive funding environment, most nonprofits are looking for new ways to distinguish themselves and strengthen their overall appeal. Is there a new approach or “breakthrough insight” that can enable not-for-profits to enhance their funding opportunities and improve their operating effectiveness at the same time? 

The answer can be found in an unexpected place: the Government Performance and Reporting Act, or GPRA.

Mandated in 1993, GPRA is designed to significantly improve the organizational effectiveness of federal agencies through a structured, strategic-planning process and regular monitoring and evaluation of performance results. Over the years, GPRA has had a significant, positive impact on managerial effectiveness within the public sector.

The explanation is simple: GPRA defines a set of planning guidelines and “best practices” that have withstood the test of time. The GPRA model is distinctive and compelling in its emphasis on measurable results. This performance-based approach to strategic planning is not widely established within either the private sector or the not-for-profit community.

So how does GPRA relate to the nonprofit sector, and how could it expand funding opportunities while also improving operational efficiency? The short answer is this: Let’s examine first the funding aspects. To understand the impact that GPRA adherence could have, we must look at the current state of fundraising within the not-for-profit sector. The complexity of this process has grown across all three primary funding channels. Donors and private foundations are increasingly rigorous about how their money is allocated, and growth in the number of not-for-profits has made competition for these funds intense. Federal government grants, the third main source of funding, have been more difficult to obtain due to increasing budget pressures and a greater focus on accountability.

Any not-for-profit that embraces GPRA’s planning and performance reporting principles will likely have a better chance of securing money from all of the three main sources. Since individual donors and private foundations have become much more selective and results-oriented in determining where their money goes, they expect to be regularly informed on progress. Grant applicants are required to submit detailed justifications for their requests, and if they receive a grant, they must provide consistent, timely reports on how the money is being utilized.

Now let’s look at internal operating effectiveness. Most not-for-profits place their primary emphasis on generating a positive impact on their target constituencies. This is their mission, and it is usually an all-consuming one. They measure effectiveness by the number of people they help or how much they advance their cause through advocacy. Detailed planning and operational efficiency are not usually at the top of their priority list. Furthermore, these skills may not be as strongly developed as within the private sector, where they are critical for competitive success.

The “breakthrough insight” mentioned earlier is based on a vision of enhanced collaboration between funding sources and the not-for-profit sector. Sharing the guidelines of GPRA can only improve the ability of not-for-profits and their funders to work more closely and effectively together. At a minimum, their planning cycles, performance metrics and information systems would be more aligned, and both parties would likely find their own managerial responsibilities simplified as a result.

Another benefit: Since GPRA is intended to increase accountability, adoption of its main tenets by the not-for-profit sector would have a similar impact. When a funding recipient is more adept at being accountable for the funds it receives, both parties benefit. The money is spent more appropriately, and the impact generated by the fund provider is also enhanced.

So is it realistic and reasonable for not-for-profits to utilize all of the specifics included in the GPRA legislation? No. Is it realistic and reasonable for not-for-profits to adopt the same general commitment to regular strategic planning and disciplined monitoring of progress on which GPRA is based? Yes.

It is virtually certain that the effort this entails will be more than offset by the increases gained in efficiency. Once a not-for-profit learns the basic process for strategic planning and how to consistently track and evaluate results, these will become embedded into its managerial fabric.

What will it take to promote the usage of GPRA’s planning and performance management principles within the not-for-profit world? It must start with creating awareness of the benefits, applied to both parties. A concerted education program should be launched that will simplify the complexity of GPRA into a more easily digested form. As part of this educational initiative, tools and techniques for implementing a straightforward strategic planning process should be provided, as well as efficient approaches to assessing progress and regular reporting.

Martin Lattman is the author “Manage Your Mission: A Practical Guide for Leaders of Non-Profits.” He is the founder and managing partner of QRG Inc., a strategic management consultancy firm.

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