Charities and other not-for-profit organizations are often created to address society’s most persistent challenges (e.g. homelessness, hunger, poverty) – those that neither governments nor for-profits have historically been able to solve.

According to the latest research, changing demographics and an aging population, is significantly increasing demand for charitable services while available funding is set to decreaseⁱ. Therefore, it is a critically important time to build the capacity of not-for-profit organizations.

In folklore, a silver bullet is often the only effective strategy to ward off werewolves, witches, and other monsters. It is a metaphor for a simple, seemingly magical solution to a complex or persistent problem.

So, we have to ask ourselves, is there a silver bullet that could create additional capacity in the sector without additional funding? Vantage Point has been talking about the concept of the abundant not-for-profit for many years – the opportunity to move our missions forward through knowledge philanthropy.

I would like to propose another opportunity – let’s work to resolve the issue of restricted fundingⁱⁱ and the Overhead Mythⁱⁱⁱ. The Overhead Myth posits that spending on programs is good and spending on overhead is bad. As a result of the Overhead Myth, many governments and foundations provide direct funding for programs and heavily restrict spending on overhead expenses and capacity building.

All – and I mean all – of the research that has ever been done on overhead spending has come to the opposite conclusion. The research is best summarized in the following quote from the Nonprofit Overhead Cost Project^iv (sponsored by the Ford Foundation, the David & Lucille Packard Foundation, and the Rockefeller Brother Fund):

“One of the important findings of the Nonprofit Overhead Cost Project is that overhead, far from a “necessary evil,” is the basis for mission effectiveness.”

Through over 20 years of research, Grantmakers for Effective Organizations (GEO) has long been advocating for fewer restricted grants and more grants specifically for capacity building . They have arrived at the view that organizations have generally been forced by funders to spend too much on programs today and not enough on building strong, sustainable, efficient, effective organizations. They are also of the view - supported by all of their research - that investments in capacity building^v result in significant returns on those investments and result in higher levels of mission achievement. As organizations become more efficient and more effective, they can grow and deliver more services.

So, is there a simple, seemingly magical solution to creating more capacity in the charitable sector? Absolutely. The silver bullet is unrestricted funding and funding available to build organizational capacity.

Even without increasing funding available, funders can create more capacity in the sector by reducing restrictions on their funding and allowing organizations to invest more in leadership, governance, technology, financial management, higher salaries and more training for staff. This will allow organizations to become more efficient and more effective. It will allow them to grow and provide more services to more people.

_i Emmett, Brian. “The Social Deficit: How Much Faster Will Charities Have to Run to Stay in the Same Place?” Imagine Canada, 18 Oct. 2016, www.imaginecanada.ca/blog/social-deficit-how-much-faster-will-charities-....

_ii “What Financial Challenges Do Nonprofits Face?” Grantmakers for Effective Organizations, 5 Mar. 2015, www.geofunders.org/resources/what-financial-challenges-do-nonprofits-fac....

_iii BBB Wise Giving Alliance, et al. “Moving Toward an Overhead Solution.” The Overhead Myth, overheadmyth.com/.

_iv Urban Institute Center on Nonprofits and Philanthropy, and Indiana University Center on Philanthropy. “Nonprofit Overhead Costs Project.” Aug. 2004.

_v “How Can We Be More Supportive of Nonprofit Financial Sustainability?” Grantmakers for Effective Organizations, 5 Mar. 2014, www.geofunders.org/resources/how-can-we-be-more-supportive-of-nonprofit-....

Not-for-profit organizations do incredibly important work – providing critical services that support and enrich our communities. Robust internal capacity and organizational competence is what supports their ability to achieve impact. At Vantage Point we are on a mission to improve not-for-profit capacity.

By building the capacity of your not-for-profit organization, you can strengthen the impact your programs have in your community and ensure long-term program sustainability. The importance of capacity building is a critical conversation for not-for-profits, funders, government, and the broader community. 

Defining Capacity

What exactly is capacity? It is impact. It is resilience. It is sustainability. Essentially, capacity building is an ongoing investment in the improved performance and sustainability of our people and organizations. What does an investment in capacity look like? It is a focus on and commitment to enhancing our internal governance, management, and operations. It can include professional development that improves staff leadership competencies, board governance training that enhances board effectiveness, or technology that improves customer and donor relations.

At Vantage Point we focus on four areas of not-for-profit capacity: management, governance, financial resources, and administrative systems¹. In addition to strong program delivery, these are the organizational platforms that support and sustain an organization’s impact.

Why Does Capacity Building Matter?

Capacity building creates more effective and resilient not-for-profit organizations. Imagine the potential that your not-for-profit could achieve with fully equipped leaders, robust financial management systems, flexibility to adapt when challenges arise, and a collaborative work environment that allows for new ideas and generative thinking. When positioned this way, capacity building is sexy!

We see the impact of capacity building every day and our program evaluations show incredible results in areas such as leadership competencies, improved employee engagement, and increased fundraising. Capacity building takes time and investment, but the benefits far exceed the cost.

Our Next Steps

What does your internal capacity look like? We encourage you to start conversations with your colleagues and supporters about what increased capacity would mean for your organization. Let’s discover and unleash the potential in our teams and organizations and build stronger organizational competence.

At Vantage Point we are committed to capacity building and we will continue to engage leaders, funders, and the community on this important topic. We will highlight practical tools and share new insights along the way through our blog, resources, and new capacity resource page for not-for-profits.

Together, as not-for-profit leaders, funders, and community members let’s increase the capacity of not-for-profit organizations!

¹ As identified in Nonprofit Lifecycles: Stage Based Wisdom for Nonprofit Capacity by Susan Kenny Stevens.

As a leader within the not-for-profit sector for over 15 years now, I’ve had the opportunity to work with many incredible women. In celebration of International Women’s Day, I share here some of the key approaches that I have learned from these strong and smart individuals. I have found these practices to be essential in my own development as a leader – and as a woman.

1) When contemplating change, consider the importance of over-steering the boat to alter the course.

As a sailor, I’ve mulled on this analogy many times. When faced with a major change of course out on the water, I’ve seen what’s required of the skipper to set this new course. I’m naturally a more facilitative leader, who strives to gradually, and diplomatically, bring everyone along. In 2002 Vantage Point began a shift to re-orient our mission to build strong leaders and strong not-for-profit organizations. The Executive Director who was at the helm demonstrated the importance of over-steering, and not necessarily being able to bring everyone along.

2) In facing important decisions, ask yourself what each option makes possible, and for whom, while also acknowledging the worst that could happen in each case.

This practice, an aspect of Creating the Future’s Catalytic Thinking, has been essential to both my personal and professional decisions and I encourage you to try it out. I have also learned the benefit of framing “no” decisions as saying “yes” to another opportunity.

3) Start your day with a positive intention

It’s been a busy start to 2018 here at Vantage Point and I’m definitely aware of the “stretch” I’m experiencing. Starting each day with a positive intention has been tough. I’m sticking with it, however, as the simple practice of focusing on one positive thought or aspiration for the day truly brings out the best in me at home and work.

4) As leaders contributing to shaping and developing high performing cultures, get used to being a broken-record.

I’ve been constantly reminded of the importance of consistency by the Executive Directors I have had the privilege of working with here at Vantage Point. A strong culture at Vantage Point, with a commitment to abundance and people, has come through leadership that is comfortable persevering through challenges and making space for the many conversations required to assure board and staff are aligned (and re-aligned!) at every turn. I have seen the measurable outcomes of this leadership including demonstrated growth in mission impact.

5) Once in a while, ask yourself, “would I rather be somewhere else”?

I have committed both work and volunteer aspects of my life to the not-for-profit sector. To assure I’m still receiving energy from all that I put in, every once in a while, I intentionally ask this question. On occasion the answer is going to be “yes – I’d rather be doing…”. But for the most part, even when I’m feeling challenged, the answer is actually “this is exactly where I want to be”.

What meaningful practices have women in your life passed to you? Please share them with us in celebration of all the women that make this sector amazing to work in and a force within our communities. If you are looking for ways to pass along your skills and expertise, check out the current volunteer positions at www.govolunteer.ca.

Thank you to the amazing women that passed this advice on to me:

Colleen Kelly, former Vantage Point Executive Director
Denise Baker, Vantage Point Executive Director
Martha Sales, Coach and Founder of Achieve Your Mark, Vantage Point Knowledge Philanthropist & Board Member
Tammy Robertson, President, Professional Coach and Author, Work Heart Consulting
Hildy Gottlieb, Co-Founder, Creating the Future

A not-for-profit organization’s effectiveness and capacity to navigate change depends largely on its people. Ask anyone about the characteristics of strong and effective not-for-profit organizations and the conversation will inevitably turn to leadership.

Vantage Point’s work is in building the skills and knowledge of not-for-profit leaders to strengthen their leadership performance and impact. In 2017, we did an in-depth evaluation of our program Executive Lab, an advanced program for senior leaders. The impact on individuals and organizations is remarkable.

Vantage Point’s Executive Lab program was first launched as the Executive Director Learning Circle in 2006. Since then, we have engaged nearly 150 senior not-for-profit leaders in peer-based learning to develop personal leadership competencies and improve organizational performance.

Through online survey responses and participant interviews, past Executive Lab participants confirmed that the program directly impacted their leadership abilities in several ways:

• 82% of participants agreed that because of Executive Lab, their effectiveness as a leader, confidence, and competence with their executive role and responsibility greatly improved
• 73% said their relationship with their board has improved
• 68% significantly increased the number of donors and volunteers committed to their cause
• 100% said the scope of programs was much better
• 75% said their program effectiveness was much better The evaluation included three core themes to determine the specific areas of the program’s impact:

1. Leadership Effectiveness: In terms of their leadership, participants saw the largest increase in their comfort with their executive director role, leadership effectiveness, leadership strengths, and relationship with their board. These elements are all critical to the success of senior not-for-profit leaders.

2. Organizational Effectiveness: Participants reported an increase in their organizational budget, increase in donors, reduction of staff turnover, and increase in their number of volunteers. These measures show an increased capacity in these organizations, as well as a strengthened resiliency.

3. Organizational Change: Participants saw an increase in their scope of programs, staff knowledge, community outreach, and program effectiveness. It is through these types of changes that not-for-profits can better fulfill their missions. We know that one of the challenges in supporting capacity building is that the impact doesn’t happen overnight. The impact of our work is long term, and not always easy to articulate. These results are truly remarkable and overwhelmingly point to the fact that leadership training is crucial in the success and sustainability of not-for-profit organizations.

At Vantage Point we are fully committed to lifting leadership in the sector.

Join us for Executive Lab 2018

Our next cohort of Executive Lab begins on March 7, 2018. Applications are due February 14, 2018. Apply today!

Earlier this year, the Vantage Point board confronted a challenge many organizations face: should we press forward with renewing our strategic plan, or should we hit the pause button until we have a new executive director in place? With Denise’s planned retirement on the horizon, it would have been easy for us to hit pause. After all, wouldn’t we want to wait and involve a new executive director in developing the next phase of Vantage Point’s future? And, more practically, we were already going to be dealing with an executive director succession process, did we really need to add strategic planning to our agenda?

In spite of these concerns, we decided to move forward with our plans for a strategy renewal. I hope sharing our rationale may provide some learnings to those of you facing a similar choice. These were some of the key reasons we decided to renew our strategy ahead of a leadership transition.

1. We were on a solid strategic and operational footing. Denise’s retirement comes at a time when the organization is thriving. Our strategy had served us well, and we found ourselves in a position of mission growth and organizational evolution. In many respects, it made our strategic planning process quite straightforward as we looked at renewing and advancing, rather than recreating, our strategic focus.

2. We needed a framework to help us make strategic and operational choices. We were increasingly being confronted by opportunities and choices that were pushing us outside our existing decision-making framework. Should we expand our geographic presence? Should we invest more in advocacy? Should we grow our internal consulting staff? A renewed strategy would help both the board, and staff, choose and invest wisely.

3. We had an engaged staff team that was chomping at the bit to understand where we were going next. We are blessed with a group of super-smart professionals, passionate about growing our mission impact. We risked losing that energy and enthusiasm, and leadership, by hitting the pause button. Involving our senior staff in our discussions and decisions helped to ensure we aligned around a shared vision of the future and gave us all a renewed passion for our cause.

4. We have a board of directors who will take us into the future, most of whom were not around for the last strategic plan. As a director, it is hard to really connect with the strategy of an organization if you have not participated in its development. This provided an opportunity to engage all of us in shaping our future and deepened our commitment.

5. We wanted to give our new executive director a running start. While it is tempting to wait until a new leader is in place to embark on strategy, we risked delaying forward progress as he or she gets up to speed. Unless an organization is in crisis and the new executive director is charged with leading significant change, there is good reason to ensure a strong strategic plan is in place to guide decision-making.

Having a renewed plan allows us to look at executive director candidates with a clear view as to where we want to go, and ensures we select someone who can help take us there. Having a solid strategy in place, at all phases of an organization’s life cycle, is one of the very few critical responsibilities of the board. For us, that meant embarking on renewal at the same time as we are working through a significant leadership transition. Now that we have gone through the process, we know it was the right decision.

When I was hired as the Executive Director for CMHA (Canadian Mental Health Association) Vancouver-Burnaby, I was charged with accomplishing a few key priorities, including working better with other local CMHA branches.

Formal collaboration had been discussed but was mostly stuck in the research and contemplation phase. An opportunity to bring the three local branches together presented itself through a growing fundraising event called Ride Don’t Hide. I used the event as a way to demonstrate that the local Branches could work together more closely. The Executive Directors had to meet regularly and negotiate an agreement on the often difficult subject of money. My hope was that if the branches could reach agreement on a topic as sensitive as money, they would learn how and if they could work together while building trust. The fundraiser also provided opportunities to build relationships between the boards.

In September 2014, three regional branches of the Canadian Mental Health Association – Vancouver-Burnaby, Fraser and Delta – began formally amalgamating into one branch. Once this decision was formalized, we initiated a process of change management and training with the staff teams of the founding branches.

Sharing Insights

I would advise other organizations undertaking significant change initiatives to be mindful to:

1. Know the Why. Knowing and being explicitly about why you are amalgamating is necessary. Your common mission and desire to better serve your clients and communities are strong drivers of amalgamations that can help maintain motivation through the sometimes intense workload. Saving money is unlikely; reaching higher levels of efficiency (doing more with the same resources) is often realistic, but if this is the primary reason, it is unlikely to maintain motivation and focus through the process.

2. Find a framework to equip people with de-personalized language to describe their experience. In this case, William Bridges’ model worked well as it was familiar to me, but also simple and memorable enough to be quickly picked up by a large group of people. A common language and common understanding of how people react to change makes sense for large groups.

3. Separate the technical from the adaptive pieces. It was incredibly important for us to have a very detailed operational plan and be onside with labour laws, accounting practices, and the CRA, for example. We created a master checklist, followed a plan and made sure we were on track. Tackling the technical in this way allowed greater energy and focus to be placed on the adaptive pieces of organizational culture, human relationships, and identity (Heifetz & Linsky, 2002).

4. Consider your timing carefully. Amalgamations should be time-bound. Nine to twelve months is likely more reasonable than the 5 months the CMHA branches gave ourselves. I would also advise against timing amalgamations to align with things like the fiscal year end or any other ‘perfect’ time. Be ready to run when the timing is right. If you wait until everything is perfect, it never will be. Be ready to take advantage of opportunities when they arise.

5. Leadership is required at both governance and staff level. What’s more, both levels of leadership need to work together. Either level could undermine the process and create unintended challenges. Working together, it’s more likely that joint solutions will emerge.

6. Separate governance decisions from operational decisions. Clarity on what the board does and does not need to decide can free their focus and ensure there is space to tackle the right questions with thoughtfulness and confidence. Building this clarity with the board before formal conversations related to amalgamation or mergers begin is very helpful as to demystify the process and reduce anxiety.

7. Leaders should embrace their strengths and find others to compensate for their weaknesses.
I found that it was important for the staff leading their change initiative to know their strengths and identify what pieces might be better handled by outside experts. CMHA had limited budget to engage consultants, so a lawyer was engaged to do legal work pro-bono, and a consultant was brought on to provide options on re-organizing the leadership team. I had significant experience in leading staff transition and leveraged that strength by facilitating staff meetings, and introducing Bridges’ model.

More and more, BC not-for-profit organizations are looking to make a greater impact through their boards. Some groups want to go beyond the typical governance practices - such as monthly meetings, Robert’s Rules of Order, and the implied expectation that directors are fiscal managers. Recently, a group reached out to Vantage Point to ask how they could support and reflect Indigenous cultural practices at the board level. There is also a rising awareness to support and reflect the diversity of our communities in our boards.

At Vantage Point, we believe good board governance goes beyond basic fiduciary responsibilities. But to take things to the next level, we also emphasize the importance of board leadership (best described in the Governance as Leadership framework). This approach pushes boards towards strategic discussions and a more visionary perspective – beyond fiduciary oversight.

We held a discussion session within our community to explore this topic. What would governance look like that empowers communities? How can organizations that exist to support specific populations include diverse communities in a meaningful way? What are the cultural means of governing not-for-profit societies? In the discussion, we quickly realized we had more questions than answers.

Here are some key questions that we’re going to explore:

• How can we understand governance as responsibility to community¸ rather than (or in addition to!) fiduciary responsibility?
• How do we equip different population groups to participate on boards?
• How can we bring different perspectives to the board, rather than different representatives? (an important distinction!)
• How do we ensure cultural safety, humility, and an ability to make mistakes at the board level?
• What does love and emotion look like in the board room?

We also took inspiration from Hildy Gottlieb’s article Governing for What Matters (Community-Driven Governance) to focus in on what really matters when it comes to board governance. This inspired a conversation about what governance is fundamentally all about. These two items were added to our list:

• Boards exist to share power
• Boards exist to make decisions

We’ve got a lot to explore going forward, but we agreed that it is more important to be willing to take some first steps before all the answers are in place.

What is your board’s governance meant to achieve? What could governance look like in your organization, if it focused on what really matters?