How do you know when a nonprofit isn't good enough?

In the commercial world, the measures of performance are pretty clear, even when curiously applied.

For instance, head coach Marty Schottenheimer of the San Diego Chargers was just sacked despite having led his team to the best record in the NFL this past season. The reason: a dispute with higher-ups over his assistant coaches for next year.

MTV just let go 250 staffers, apparently to combat the cultural icon's lack of buzz with new generations and anemic efforts in the now critical online aspect of their entertainment business.

So here are two “good performers” by most standards … but not good enough.

How does that apply to nonprofits?

When was the last time you heard of a nonprofit exec being fired for not being good enough? Has a nonprofit's web team ever been replaced for general mediocrity?

Of course, such firings would be drastic measures. But how is performance by a nonprofit's leadership team generally appraised? What questions get asked, and by whom?

Have you eradicated cancer yet? Stopped global warming? Saved all the children? Ended domestic violence? Eliminated hunger? Produced more literate students?

What constitutes noteworthy or commendable progress against such goals? When does alleviating symptoms, as opposed to attacking root problems, constitute acceptable progress? How do you tell whether the current leadership team is doing a superb job versus a pedestrian one?

Are nonprofit boards capable of making such judgments? Do they really know any more than what they are spoon-fed by the staff they are supposed to be assessing?

Donors can always judge with their wallet … shutting it when they are dissatisfied. But arguably they — especially “rank and file” members — are even less in a position to make informed assessments than trustees. When have you ever read a nonprofit's annual report (or website or renewal letter) that talked about disappointments or mistakes or missed opportunities in the previous year?!

Reporting tangible program results is an essential starting point, but only if these “results” go beyond mere process measures. And only if, from adversity or risk-taking or failure, organizational learning has occurred.

Is converting ten more corporations to the fight against global warming laudable progress? Is adding 25,000 kids to your sponsored child rolls impressive? In both cases, the answer depends upon perspective — either the underlying organizational strategy is compelling, or it is not. If it is, then progress assessment becomes a matter of leadership performance … is ten more corporations or 25,000 more kids good enough?

In any case, there can't be any accountability for performance amongst nonprofits without explicit benchmarks or milestones against which to measure.

How systematically does your organization lay out its performance goals for the coming year to staff, board members, the media, your donors? Is everyone on the same page in terms of performance expectations? How accurately do you then report your progress against those goals at year's end? And how explicitly are your organization's leaders evaluated against meeting those goals?

I'll bet Marty Schottenheimer thought a 14-2 record was pretty damn good. But apparently someone in his organization was working against a different benchmark … and he wasn't good enough!

“Not good enough” businesses and business leaders get weeded out pretty efficiently … sooner or later, customers and/or shareholders revolt. Is the same true of “not good enough” nonprofits and their leaders? What's your view?

Tom