Jackie Cefola Consulting

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Back in 2014, I had the pleasure of working with the Nonprofit Centers Network to complete a feasibility assessment to assist the Association of Community Services of Howard County in considering the potential to develop a human services center. Information was collected through a detailed survey, focus groups, individual interviews, and analysis of the local market for real estate. Recommendations were drafted for the proposed center’s mission and goals, potential tenant organizations, and operating models. Presentations were made during a public “Town Hall” and several  Advisory Committee meetings. Recently, I was pleased to read that the Association succeeded and will open the doors to a new center serving the local community. Read more about the project here.

In early 2017, I had the pleasure of working with the Nonprofit Centers Network and the Inter County Community Council (ICCC) of Thief River Falls, MN to create a pre-development strategy exploring the potential for a nonprofit center. As part of the planning process, we facilitated a Town Hall meeting to engage stakeholders from area nonprofit organizations, public agencies, and small businesses. After the meeting, several participants voiced strong appreciation for the opportunity to convene, learn more about local services, and share ideas about the needs of the local community and service providers. I very much look forward to staying in touch with the ICCC as plans continue to develop.

When we talk about the potential for nonprofit organizations to engage in shared back-office services, including fiscal sponsorship, joint contracting, MSOs, or other collaborative strategies, we often hear that the concepts are attractive but… before these strategies can be considered, there needs to be more funding to pay for high-quality operational services. 

We think that the lack of funding for nonprofit operations is influenced by history. Early nonprofit-type organizations in the US were founded by religious institutions, civic campaigns, community associations, and memberships involving charity, education, service, activism, and social activities. Groups were volunteer-led and not recognized as independent legal entities. These historic concepts of charity, volunteerism, and informal work still influence how nonprofits are perceived, namely that nonprofit organizations are somehow not “real” or deserving of high-quality operations.

We see a related push for nonprofits to run their operations “more as businesses,” implying that for-profit operations are more effective than mission-based operations. For example, common funding proposal questions read like sections from a business plan, including:

  • What is the proposed service and what is your competitive advantage?
  • Who is your client or customer and how many will you reach?
  • What is your sustainability plan? What is your earned income? What are your other sources of funding? 

Here’s the disconnect. Unlike business plans, nonprofit funding proposals usually do not require an operations plan with information about organization-wide functions, such as accounting, data management, compliance, insurance, professional development, purchasing, communications, human resources, or facility management. We suspect that an operations plan is not required because many funders seek to fund specific program activities and not general operating, start-up, capital, or overhead. It is also common for nonprofit funders to limit indirect expenses to a set percent of program expenses, regardless of the mission and administration involved. 

Despite the expectation for nonprofits to be more business-like, it’s as if the operational functions, what makes the nonprofit an organization, aren’t as important when compared to funding the direct costs of programs. As if programmatic impact can happen independently, almost magically, without:

  • High-quality, stable, and compliance-oriented operating systems
  • A knowledgeable team of professionals and board members
  • Appropriate workspace and supplies
  • Funding for startup, growth, and emergencies
  • Research and development for future proactive strategies

Yet we know, especially now, that this is not how effective organizations, whether for-profit or nonprofit, operate. The COVID-19 pandemic has shown us that high-quality operational practices are necessary for organizations to adapt to unexpected situations, provide essential goods and services, and offer stable employment in times of stability and in times of crisis. 

The pandemic has also shown us that a new prioritization of nonprofit operations is possible. In 2020, we saw a new immediacy and acceptance for nonprofit organizations to discuss operational challenges with funders, including challenges that were persistent. More funders offered unrestricted funding and engaged in collaborations to share information and collectively support emergency response and capacity building. New shared service networks started up and new fiscal sponsors began offering services to support increased demand.

Adding to this momentum, we believe there is new financial capacity to support nonprofit operations. Because, despite the pandemic, investment returns were high, wealth grew, and as a result, funding institutions have more to give. There is potential to increase unrestricted, general operating, capital, and multi-year funding without taking away from existing programmatic priorities. 

With these trends in mind, we hope that nonprofit operations will become more of a priority and that nonprofit organizations will have the resources needed to access high-quality back-office services. As this support and recognition of the need for nonprofit operations grows, we also hope that more organizations will be able to explore the potential for shared services and not miss out on opportunities due to a lack of funding.

This article is the second in a series, based on conversations between Jackie Cefola and Debra Box about nonprofit shared services and related topics. 

Jackie Cefola, principal of Jackie Cefola Consulting, is a trusted advisor to nonprofit leaders who are starting up new collaborations, often related to shared services. Debra Box, principal of In the Box Consulting and former President and CEO of Support KC, where she helped nonprofit organizations to focus on their missions by providing integrated expertise in financial management and support services.

Nonprofit operations may not seem sexy, but they are key to building capacity and resiliency. And what’s really not sexy is a nonprofit organization with outdated systems that cause inefficiency or non-compliance; or practices that contribute to someone’s burnout.

During a recent a presentation about shared services someone asked, what’s sexy about nonprofit operations and why should we pay attention?

Admittedly, when you first learn about a nonprofit organization, the mission is probably what sparks your interest. The back-office of an organization, the accounting, finance, information technology, human resources, and other administrative services, is not as immediately eye catching. Yet we know that these functions are essential. 

In a recent conversation, an Executive Director of a newly forming nonprofit recognized the need for operational support. “My Board wants me to focus on the strategic direction of the organization and not on administrative tasks, but right now there is no one else to do them. In the short-term, board members will be supporting in these areas. Board members that have been recruited have skills that are needed.”  

More resources exist for for-profit startups. When an entrepreneur starts a small business, there are public structures to provide consulting, support, and resources to help set up effective operations, including through the Small Business Administration (SBA). While nonprofit entrepreneurs can utilize and adapt the SBA’s services, there is no dedicated Small Nonprofit Administration, despite the reality approximately 2/3 of nonprofit organizations that report any expenses have budgets under $250,000 per year. 

A $250,000 nonprofit budget typically translates to an organization with a staff of one or two people who are responsible for all operational functions in addition to mission-related activities. In practice we frequently see an executive director who is responsible for accounting, finance, information technology, human resources, and marketing – in addition to leading programs and services. 

This increases organizational risk because no one person can be exceptional at every operational and programmatic function. There may be gaps in service quality if, for example, best practices are not followed, or systems are not updated. This also can contribute to leadership burnout because it is very hard to balance so many competing priorities and also have very little capacity to consider alternative ways of doing things. 

The founder of a 5-year-old environmental group recognized the need for operational planning, budgeting, and funding as she looked back on her experience, “I created a business model that never included staff and I’m paying for that now. I took classes to build my skills, but I did not want continue to do everything.”

Maybe our interest in operations is changing. Over the past year the COVID-19 pandemic caused many nonprofit organizations to pivot. Funders had a choice about what to do when funds were allocated for programs that couldn’t be provided as proposed. Some funders responded by allowing organizations to re-purpose funds to make operational investments, for example, to support technologies and systems for remote work.

National networks and local networks also offered new ways for nonprofit leaders and back-office service providers to share information and best practices, for example, to help organizations navigate the PPP loan application process. 

Outsourcing and shared service providers, including fiscal sponsors, continued to offer different collaborative back-office services to suit the needs of nonprofit organizations. 

Looking forward, as nonprofit organizations transition back to the workplace, we suggest that the back office must continue to be a priority. As we’ve learned over this year, an organization’s operations can strengthen stability, resilience, and responsiveness and when we invest in the back office, we increase overall capacity for mission impact.

 

This article is the first in a series, based on conversations between Jackie Cefola and Debra Box about nonprofit shared services and related topics. Jackie Cefola, principal of Jackie Cefola Consulting, is a trusted advisor to nonprofit leaders who are starting up new collaborations, often related to shared services. Debra Box, principal of In the Box Consulting and former President and CEO of Support KC, where she helped nonprofit organizations to focus on their missions by providing integrated expertise in financial management and support services.

This week I had the opportunity to co-facilitate a virtual “Lunch and Learn” session with the MetroWest Nonprofit Network. My co-facilitator, Andrea Shapiro, and I reviewed a basic framework for thinking through very complex decisions involved with returning to the workplace. We suggested three areas to explore:

  1. The current situation, what strategies are working now and should continue
  2. Strategies for increasing safety, health, comfort and productivity while returning to the workplace
  3. Potential long-term impacts to the workplace and to the organizational budget

We also spoke about the need to engage staff in these conversations with the aim to build communication and trust during these challenging times. See the recent article that Andrea and I wrote with a list of specific questions to help start the conversation.

Andrea and I were excited to connect with MetroWest nonprofit leaders and we look forward continuing to develop resources to support organizations during this time of transition.

I recently contracted with the Nonprofit Centers Network to help a capacity building organization in Philadelphia understand the local demand for shared services.

We started by asking how groups currently access, or in some cases don’t access, back-office services, for example, accounting, marketing, fundraising, information technology, and human resources. We also asked which, if any, of these functions felt particularly challenging, and why. We then explored whether groups would potentially be interested in developing new shared service strategies, for example, shared staffing or joint contracting.

I understand that for many, researching this back-office stuff may not interesting or “sexy” (look for more on this point in the future) but to me, decisions about operational functions directly reflect an organization’s culture, priorities, and overall health. Furthermore, groups that seek to collaborate and strengthen back-office services are doing so to increase resilience and ultimately mission impact.

All to say, I was really excited to better understand opportunities for shared services in Philadelphia and I look forward to staying in touch as efforts progress.

The COVID-19 pandemic is changing our understanding of the workplace. 

As nonprofit centers and their tenant organizations prepare to reopen for in-person operations, there will be many new health and safety protocols to implement. There may also be opportunities for workers to continue virtual work arrangements or flexible scheduling, reducing workspace density. These strategies have potential to vastly impact nonprofit center and tenant facilities, operations, workspaces, and cultures now and in the long-term.

This is a very complex situation to plan for but as advisors to organizations considering new workplace strategies, we suggest that the place to start is to proactively seek feedback from staff to better understand, from their point of view, what will be needed to support a workplace that is safe, healthy, comfortable, and productive. 

Over the past year, nonprofit centers and tenant organizations providing non-essential goods and services in many states experienced an emergency closure followed by reduced occupancy limits and new health and safety measures for in-person operations. By necessity and choice, more staff engaged in remote working arrangements and for many, the primary workplace shifted to home. 

At the same time, too many members of the workforce were and still are facing serious challenges involving health, mental health, food access, shelter, financial stability, childcare, elder care, educational access, and more. To try to address these challenges, more organizations allowed greater accommodation and flexibility with work scheduling, strategies that some workers may seek to continue in the future. 

Now as occupancy limits are eased, nonprofit center and tenant leaders must be both proactive and responsible in considering whether and how to return more workers to in-person operations. They must also consider whether and how to continue remote or flexible work scheduling for staff who seek it. There is also a need to think about the long-term effects of these changes on organizational cultures to ensure that trusting and collaborative relationships and professional development pathways are maintained.

Underlying these decisions, leaders must determine how the needs for workspace and the associated budget allocations for in-person and remote operations have changed. Are there needs to adjust the size of a tenant’s workspace or shared workspace? Is it possible to design workspaces to be used differently by workers with flexible schedules? What investments in technology, equipment, or other supports will be needed for remote workers in the long term? How will these potential changes impact the budget? 

As the first step in planning, we suggest sincerely engaging the workforce, asking for and actively listening to feedback about strategies to promote safety, health, comfort, and productivity for in-person and remote operations now and in the future. 

The questions that follow are designed to help you frame these conversations with staff, contracted team members, volunteers, and others who comprise workforce of nonprofit centers and tenant organizations.

Assessing the current workspace and schedule:

  • Tell me about your current workspace.
  • If you are remote, who else is in your workspace? What else happens in the space while you are working?
  • Do you feel that you have the resources and support that you need to do your work safely and comfortably in your workspace? If not, what do you need?
  • What is your current work schedule? What is your preferred work schedule?
  • What is working well? What is not working well? 
  • How can our organization help to support you and your current workspace?

Returning to existing workspace:

If our organization were to return to primarily working from our workspace…

  • What concerns would you have?
  • What health and safety strategies would you want to see in place for our office? For the building?
  • What days and hours would you prefer to work from the office?
  • What communication and feedback strategies would you want our organization to engage in?

Beginning to explore the future for workspace:

It is impossible to know exactly what the future holds but thinking about the next few years… 

  • Where would you want to work most of the time? (home, organization’s offices, other)
  • What would you need to do your job effectively from that location?
    • Office, workstation, shared space, or workspace
    • Equipment, technology
    • Supplies
    • Memberships, subscriptions, services
    • Training, professional development
    • Other
  • Where would you prefer to hold meetings 
    • With coworkers? 
    • With clients? 
    • With other organizations and partners? 
    • With other members of the community or the public?
  • What would you need to conduct these types of meetings?
    • Small, medium, or large group meeting space
    • Equipment, technology
    • Supplies
    • Memberships, subscriptions, services
    • Training, professional development
    • Other

Discussing these questions with your workforce will help you better understand how current workspaces can be improved, identify wants and needs for future workspaces, and get feedback about specific concerns and strategies for returning to the workplace. These discussions will identify common situations, concerns, and preferences that you can use to develop solutions across your organization or the nonprofit center as a whole. 

Once you collect this input, it will be important to summarize and share what you learned and outline the strategies that will be possible. If you cannot implement all of the suggestions because of budget, workspace design, or other reasons, be sure to explain why. This is an important opportunity to strengthen trust, communication, and relationships during the transition back to in-person operations. 

Returning to in-person operations and providing ongoing support for remote workers will be part of a much broader learning process about the future of workspace. Engaging staff now, as integral voices in the decision-making process, will provide a foundation for organizational success and team wellbeing.

This article was co-written by Jackie Cefola and Andrea Shapiro.

Jackie Cefola, principal of Jackie Cefola Consulting, consults for NCN and works with nonprofit leaders who are starting up new programs, often related to shared space and services. Andrea Shapiro, principal of Andrea Shapiro Consulting, is a trusted advisor to nonprofit and government leaders who are managing change and transition within their organizations. 

An adapted version of this article was published by the Mass Nonprofit News