The Board of Directors has two fundamental tasks as the governing authority of the nonprofit organization. The first task is to ensure the mission of the organization, and the second task is to oversee organization performance.
In the post entitled Mission Outcomes I offered a framework that the governing authority could use to determine if the organization is achieving its mission.
The second task of governance is to oversee the performance of the nonprofit organization. To begin this task, the board must begin with the question — How do we know if the organization is operated effectively? The answer to this question can be fairly complex since a nonprofit organization has many stakeholders and many interests that must be acknowledged and balanced. At ChildServe, the organization that I have served as the CEO for the past 17 years, identified three competing interests that needed to be balanced to have a healthy organization. These three interests formed the “Organization Performance Framework“.
The three parts to the Organization Performance Framework included:
- Care — Since the mission of ChildServe is about helping children, the major means to help is providing care. The Care system contains measures about regulatory compliance, how the care is individualized, and the capacity of the care system.
- Staff — Care cannot be delivered without staff. The Staff system contains measures about staff recruitment and turnover, staff engagement and satisfaction, and staff development.
- Business – The organization cannot operate without an effective business system. The Business system contains measures on budget, account receivables, audit results, and the attainment of several financial ratios focusing on cash and asset values.
ChildServe developed this Organization Performance Framework to recognize that organizational health and efficiency is multidimensional. Organization health is not just a postive financial performance, or happy staff. The Organization Performance Framework enables the governing authority to focus on the results without getting mired in administrative details.
What results do you expect from your nonprofit organization? How would the other stakeholders in the organization define organizational health? What is the “bottom-line” for your nonprofit organization? Remember, as you begin to answer these questions, your mission questions are part of the “mission outcomes framework” and need not be addressed at this time.