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Three Lessons Government Can Learn from the Nonprofit Community

by Jim White and David Austin • May 2016

Three things govt can learn from NFPIn today’s hyped campaign season, candidates whip up the crowds with a lot promises about what they – and by extension – the government can do.

Make America great again!  Create jobs!  Free health care! Tax the rich!

Promises are often linked to money, and some would have us believe that if government ran more like a business, it would become more efficient; or if the rich paid more in taxes our lives would get better.  While there may be a grain of truth in these ideas, we suggest that some general principles learned from the nonprofit world could have a stronger impact on creating a much more effective government.

First, government and nonprofits share a unique role in serving the public good; for an organization to even qualify for nonprofit status it must – by law – serve the public’s interest.  This service is summed up in the mission of the organization, and that is the first important principle for government to acknowledge in its own work: it’s all about the mission, and not necessarily the money.

We often hear that better services could be provided with more money, an idea that often puts the cart before the horse. The first thing to remember is the mission, and if there is an effective plan to meet it, then money typically follows – especially for those organizations with compelling missions.  We can list countless cases where more money does not result in more successfully meeting the mission, but an easy example is in public education.  For example, in Alaska public spending exceeds $18,000/student each year, but students fare worse than their counterparts in Utah where spending averages just over $6,500/student.  In fact, 83% of Utah’s students graduate from high school, whereas in Alaska, just 72% graduate[i].  Not surprisingly, the result is not determined by spending (only the District of Columbia spends more money than Alaska; and sadly, the graduation rates are even worse).  While education experts continue to debate the right amount of money to spend, we have observed that when innovative programs educate kids, those programs get funded, primarily because they meet the mission: educate children.  Similar things can be said about housing, transportation, job creation, and the list goes on.  The thing to prioritize is meeting the mission.

When people think of government meeting its mission, many turn to the military.  It is very clear when the military has a mission, it implements a strategy then measures the results.  When things go wrong along the way, adjustments are made until the mission is accomplished.  These effective, measurable and adjustable tactics are what make the military one of the highest regarded government agencies in the world.  Similarly, effective nonprofits have defined specific measurements to understand how to meet their mission.  It has been said that what gets measured is what gets done, and, like the military, when tactics (or programs) do not yield positive outcomes, something has to change.  Other public agencies can learn from these principles, just as many effective nonprofits do in order to successfully achieve their mission.

Understandably, nonprofits learn that when funding cannot be secured to meet the mission something has to change.  Such change could occur by adjusting the program, making changes in the leadership, or even revising the mission; each case will be different, but what we do know is that when the mission is not being met something has to change, and if not, then the nonprofit will close.  In other words, there are accountability measures that kick in when funding comes up short, and either change occurs or the organization folds.  Accountability must lead to success.

On a more hopeful note, ,when an organization meets its mission, rarely do we see their programs cease due to a lack of funds, in fact the opposite often occurs: successful programs normally attract more money.  OHSU has just completed a successful $1 billion research campaign because the research institution has achieved several victories in its fight against cancer.  While a few large donors kicked in, tens of thousands of smaller donors participated in a significant part of the financial goal.  Not surprisingly, we see similar results with hundreds of nonprofits our organizations support each year: program success leads to more diversified funding.

Finally, nonprofits have learned that program effectiveness typically comes from the local community; in other words, those closest to the problem often have the most innovative solutions.  In politics this is called grass roots or community action, and it often starts with those working in the nonprofit sector.  Programs that work to move people out of poverty are often started by those who worked their way out of a hard financial situation, then built mechanisms to share that opportunity with others. Birch Community Service in Northeast Portland, and Friends of the Children – an Oregon program now spread across the country – have moved hundreds of families and individuals out of poverty because the founders came from similar circumstances who had personal, first-hand experience of overcoming adversity.

The local level tends to provide the best ideas on how to solve their own problems; programs succeed when they engage leadership at this level.

While the country undergoes significant political change over the next several months, we believe much can be learned from the experiences of successful nonprofits – and those government agencies – that clearly focus their efforts on meeting their mission, then work with the local communities to insure successful results.  If such changes are not made, then allocating more money at social problems, however well intended, or just changing our elected leaders will do little good.

[i] http://www.governing.com/gov-data/education-data/state-education-spending-per-pupil-data.html

Jim White is the Executive Director of the Nonprofit Association of Oregon, and David Austin is a Program Director at the M. J. Murdock Charitable Trust.