Monday, July 01, 2013

Mission-Based Thinking - Why It Matters, Especially Today - Why It Works, And Examples of It Enabling Organizations That Use It

Mission-based thinking, a staple of contemporary, professional, nonprofit, best practices, is often discussed and explained but examples are more difficult to locate.

In this two part post I will explain the critical importance of mission-based thinking in this post.  In the next post I will then share different examples of how mission based thinking can work, from different points of view within and outside of the nonprofit, and how in doing so, I will demonstrate how empowering, clarifying, and on track it can help an organization to either become or be.

Why Mission-Based Thinking Even Exists On the Radar
Oregon Governor Kitzhaber signed a law this June that was the first in the United States.  The new Oregon law takes aim at charities that spend 70% or more of each dollar raised on costs other than mission-related expenses.  In other words, Oregon is looking to dock charities that spend 70% or more of their income on overhead expenses such as fundraising or operations - anything other than programs or services, during three years or more.  What is the penalty?  State and local subsidies will be withdrawn from Oregon charities found spending most income on overhead rather than their stated mission (programs and services).  For more on this news item, see Tracy Loew's article for the Statesman Journal on June 29, 2013, Oregon charity law is a first.

The shot across the bow that Oregon is sending at poorly run nonprofits may be the first in a series of bills that will do something similar if not the same, in other states.

What's the big deal?  The big deal here happens to also be the reason that mission-based thinking is a key element of professional, nonprofit, best practices.

The reason why it matters to governments whether alleged charities in their jurisdiction spend less than 70% of each dollar raised (or more - which Oregon is trying to dissuade) on overhead rather than its mission is simple - a charity operates at no profit in order to do something (as described by the charity, itself, when it incorporates and receives official charity designation from the state(s) in which it will operate and from the Internal Revenue Service in order to raise tax free dollars).  The deed it claims to be doing is something for some good for the community and if the organization is successful it is also the reason that people, businesses, foundations, and so on give donations to the organization.  The work a nonprofit does on behalf of the communities of the U.S. at no profit is supported by our federal and state governments as each government type allows them (at least for now) to raise tax free dollars.  This is how those who give to charities are allowed to claim donations as tax deductions on their tax returns.  The Oregon legislature has said, in effect, by passing their law, 'If you feel the need to spend most of the money you raise, Oregon charities, on operations or overhead rather than your mission (programs and services) then our localities and state need not give you any more money because mostly our money will not go towards charitable efforts through your organization - but if we give it to Oregon nonprofits that do direct most of their income towards their mission - our money will be better invested in Oregon communities and real successes.  Real needs will be met well.'

The reason why it matters to potential clients of a given nonprofit, those considering volunteering with, or to potential community partners of a specific nonprofit (such as separate but similar other nonprofits, government agencies, or companies that may, for example, partner with this  nonprofit to provide some service, product, or program to the community jointly) whether a nonprofit is spending more money on overhead expense or the mission is the exact same reason why it matters to people, foundations, companies, and others who donate to a specific nonprofit.  If you are debating donating to Cancer Free in One Hundred and Twenty Days (a pretend charity) or giving instead to Americans Against Cancer (another different fake charity) because you wish to support people fighting to survive cancer and each nonprofit, according to each nonprofit's mission statement, does this - do you want only $0.30 of each dollar you give to support people fighting to survive cancer or would you prefer that $0.70 or more of every dollar you give helps people fight through cancer?  Obviously you want more of each dollar that can does go to the actual work and success of the mission.

Of course, this is not the only reason it matters how much a nonprofit spends on its mission of each dollar raised.  A nonprofit whose executives and board members make efficiency in operations as much of a priority in day to day work as is knowing how to: budget, professionally and ethically oversee, plan out and carry out mission work and goals, succeed at the community level, and do all of this within budget and plan the organization's future and growth, too - is a well run nonprofit that engenders confidence in its community and potential clients and supporters.  This nonprofit can raise more support easier than a poorly run organization because it's demonstrated what its working for, achievements and successes at its mission, so it is also creating support and confidence in its potential to do the same but more so and better, in the future.  A nonprofit run by people who know what they're doing according to professional and ethical practices turns out efficient and effective successes.  Organizations run in other fashions suck resources (i.e. volunteers, donations, talent, and more) away from nonprofits working to do things effectively and efficiently at the community's peril.  This is why anyone, including a state like Oregon, cares whether an organization puts most of each dollar raised into its mission or not.

What Are We Talking About?
Mission based thinking is the concept in professional, nonprofit, best practices in which for all considerations on behalf of a nonprofit the mission statement, the best interests of the beneficiaries, and the best interests of the nonprofit organization, itself, are put ahead of anything else (including ahead of loyalties, egos, expectations, insecurities, agendas, and other inter-personal politics that are unfortunately often put first when making decisions for an organization, rather than mission based thinking).  In other words, during any nonprofit's executives' decision making, amid board considerations, from the very mundane day to day decisions to be made all the way to the strategic high level considerations - mission based thinking should come first and be the initial consideration.

The reason mission-based thinking should always be first and foremost in any one's mind who is either a board member or executive of a nonprofit is:

__ The reason the organization has received official charity status from the state and the IRS (among other possible jurisdictions) is the mission statement.  It is the reason the organization has been officially recognized as a legal charity able to raise tax free dollars.  So, the mission is the reason the community members (i.e. clients, donors, volunteers, community partners, etc.) see the organization as existing, too.  In other words, the reason the organization is operating is its mission at a fundamental level (and seen as such beyond the organization's founder and board - seen as such by its community).  An organization is larger than and should outlive its founders and it should be operated to do so.

__ Fundraising, raising volunteer support, being able to recruit talent and expertise, (enabling success in the community) depends upon the organization succeeding at its mission repeatedly, achieving intended outcomes and goals based on the real needs of the beneficiaries.  Nothing in this statement says anything about the egos, insecurities, or financial/career insecurities of founders, executives, or board members being important at all (and certainly not supremely important above the needs of the nonprofit or the beneficiaries).  An organization's reputation and its track record are everything.  It is either successful and focused or it appears poorly run at best, and perhaps unethical, at worst.

__ How is an organization's leadership, volunteers, donors, partners, and clients supposed to perceive an organization if no one is agreeing on what is the reason everyone is coming together to support or benefit from it?  The number one unifying focus inside the nonprofit and outside of it should be the same thing for everyone and it should be made clear that it is the number one focus - the mission statement should be shared internally and publicly and often.  A nonprofit can be best perceived by its community if it is clear, internally, what is going on and why.  Staff, volunteers, potential supporters, and even clients should be both made aware of the mission immediately after being brought on and then also told that the mission should be what everyone considers first when doing their work or when expecting success when working with the organization.  This gets everyone on the same page and makes it clear to everyone that no one (even the highest ranking board member or executive) will put themselves before the interests of the organization and its beneficiaries.  It makes it clear what every one's priority is and should be from day one.

__ Operations and decision making are less costly and time consuming when everyone understands what page they are expected to operate from and what page everyone else is on.  In other words there can be less politics and politicking if it is clear from the outset what every one's priority is from leaders to volunteer staff - the mission, best interests of the beneficiaries, and the best interests of the nonprofit organization itself.

__ Longevity, organizational health, and mission success are more possible when an organization is operated over the years with one common priory year in and year out - yup...the mission.

__ The level of professionalism and commitment to the beneficiaries and the organization's best interest will be clear to anyone researching the organization (for whatever reason - whether they are considering working for it, considering volunteering with or giving to it, etc.).  Part of the nonprofit's reputation will become and remain this commitment.  This is very powerful for the nonprofit's community and the organization's potential to raise all kinds of support from it.

__ The organization itself and the beneficiaries become the primary concern and when this first consideration becomes a part of the organization's culture and way of operating - they (the beneficiaries and the nonprofit itself) have a lifeline that may not have existed before, or perhaps was not nearly as strong and steadfast, before mission-based thinking was put into place.

__ All planning gets on point and becomes easier to prioritize and conduct when the focus is only the best interest of the beneficiaries and the organization - given the mission statement.  Work becomes easier.

Up Next...
In my next post, Mission Based Thinking Part Two of Two - Examples of It Enabling Organizations That Use It I provide different examples of how mission based-thinking works and how it can be used.

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