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Home » NonProfits, Social Ventures, Sustainability

Leap of Reason: What Nonprofit Leaders Should Know About Impact and Funders

By Tom Watson on November 14, 2011No Comment

I’m a story teller by nature and by vocation, so I shivered a little bit when I read this sentence in Mario Morino’s excellent Leap of Reason: Managing to Outcomes in an Era of Scarcity, released earlier this year by his Venture Philanthropy Partners:

Public funders—and eventually private funders as well—will migrate away from organizations with stirring stories alone, toward well-managed organizations that can also demonstrate meaningful, lasting impact.

But Morino, who has preached a mantra of measurability and impact for nonprofits for the last 15 years, is right. And Leap of Reason is terrific resource for nonprofit managers and board members, as well social entrepreneurs, foundation leaders and informed individual donors. A nice story simply won’t get it done.

Nor should it; nonprofit organizations, churches, and foundations are granted an extraordinary privilege in the United States – they exist tax-free in exchange for the social benefits they promise. Increasingly, suppliers of capital to social causes are demanding measurable impact. And Morino (who I’ve known since the mid-90s) points out that this trend will only increase in an era of diminishing public sector spending on nonprofit organizations. Those funders will migrate away – and indeed, I’ve seen this  in my work with nonprofits. What Morino calls “managing to outcomes” involves showing real, provable social benefits to those paying the bills – and this goes beyond the raw numbers of people served, to showing how they’re served, and in many cases, the scale at which the organization tackles major social challenges.

I have to say: this kind of thinking can sometimes be frustrating for hard-working nonprofit managers toiling in the trenches in underpaid jobs with over-long hours. Particularly in the social services sector, the managers can rightly say they’re changing people’s lives every day – with programs that may not scale in the investment sense, or provide clear-cut metrics for societal impact. Yet kids get early childhood intervention, young moms get support, addicts get treatment, etc. To these folks, the work is clearly needed – though the philanthropic dollars are increasingly difficult to find.

Morino is aware that some of the management-speak in his book might put off a few readers. “I use the term ‘performance culture’ with some trepidation. I know it’s radioactive for some, especially those in the education field,” he writes. But his chapter on organizational culture really isn’t threatening – it’s inspiring. Morino encourages strong, questioning, creative people in positions of nonprofit management. “In my experience, people who improve, innovate, and adapt are curious souls and self-learners. An organization’s culture should encourage people to ask questions, seek advice, do research, improve what they do and how they do it, help each other, push each other’s thinking, probe, nudge, adapt, look at things from different vantage points. All of these behaviors lead to improvement and innovation for the organization and the individuals who are part of it.”

Leap of Reason is packed with good advice in three sections: Morino’s opening monograph on impact, a framework for planning, and a section with essays and resources for more in-depth reading and follow-up work. As a consultant who often works on strategic plans and development roadmaps, I particularly value the savvy framework section and will undoubtedly use some of the key questions and models there in my work.

Even skeptical, harried nonprofits should spend some time with Leap of Reason for another, very practical reason – it provides clear and actionable insight into the thinking of a prominent major funder, a truly involved philanthropist. Mario Morino has been working on building a more engaged form of philanthropy for a decade and a half, and many foundations and major donors now walk in his footsteps. For that reason alone, Leap of Reason should be on the bookshelf of every nonprofit leader I know. But there’s another reason as well: better-managed, more sustainable nonprofit organizations won’t just be better bets for donors – they’ll be better for the people who need them as well.

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