As communities respond to complex socio-economic challenges, demand for nonprofit services continues to rise. Simultaneously, industry data suggests that charitable giving is decreasing and burnout has become pervasive in the sector. How can nonprofits deliver more with less and thrive in this time of change?
One approach is to drive performance by investing in their people’s capabilities. While nonprofits excel at many practices, the unique challenges that they face can make it difficult to invest in talent.
Based on our experience working with over 60 nonprofits and their 11,000-plus employees around the world, through the ability to execute for nonprofits program, we have identified three crucial steps that can build capabilities to catalyze greater impact:
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Mobilize a critical mass toward a clear purpose. A “clear mission” and “strategic clarity” are among six power practices of the most healthy nonprofit organizations. Leaders should ensure the “why” of capability building is communicated from all angles, reinforced by managers, and delivered to employees to signal how it is vital to moving the mission forward.
After developing their first-ever region-wide strategy, Junior Achievement Americas teams experienced change fatigue, leadership transitions, and continued siloed operations at the local level. Getting a critical mass of employees to participate in a capability building program required securing country directors’ buy-in and allowing subnational team leaders to opt out. After a series of conversations about investing in talent to drive execution, over 250 people engaged throughout the program—94% of whom believe the organization will be able to better deliver on mission since its completion.
By engaging a critical mass of employees toward a common goal, nonprofit leaders can align their people through a clear vision and discuss how to execute against it.
This training initiative aims to establish a shared language and invest in our people, enabling us to collectively enhance our learning throughout the organization.
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Create structures where autonomy and accountability can flourish. Many nonprofits operate in decentralized, or even federated, organizations, in which frontline staff must be empowered to address the needs of beneficiaries. This is one reason why nonprofits are increasingly adopting community-led development approaches to solve local challenges. It also helps explain why “personal ownership” and “creative and entrepreneurial” practices are distinguishing factors of the healthiest nonprofits.
How can nonprofits build new ways of working at scale in the context of diverse operating models and local needs? The answer is to empower middle managers with the skills, tools, and autonomy to adapt the capability program locally. Organizations can also build program infrastructure with transparent data, clear roles, and a regular cadence for decision making and coordination.
mothers2mothers (m2m)—a community-driven nonprofit with 1,000-plus staff across Africa—had country-level teams that operated independently and faced very different logistical challenges. The organization worked with each team to understand manager needs and provide options for program delivery, which helped activate middle managers as champions of the program. The program was then incorporated into leadership meeting agendas, so each group could drive specific interventions while tracking to the same organization-wide metrics.
These tools, this approach, was super useful, easy to engage. There was an immediate return on investment.
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Engage in learning together by building on existing ways of working. This step is particularly important for nonprofits that operate in dispersed and hard-to-reach environments. Doing so can create moments of connection, mentorship, and idea integration, which are essential practices to build a more inclusive organization.
Shining Hope for Communities (SHOFCO) is a rapidly growing grassroots organization that provides critical services for over 2 million residents of urban slums across Kenya. Their working environments vary based on schedule, location, access to digital technologies, risk to physical safety, and more. To deliver capability building to more than 70 percent of employees, SHOFCO leadership took a flexible approach, adapting program delivery and experience to specific team needs while maintaining similar content, timing, and metrics.
Participants who were regularly on the move created WhatsApp groups to connect. Those with limited digital access incorporated learning moments into in-person meetings. Staff operating in shifts held “huddles” during breaks to practice applying tools to their specific challenges. And everyone could access the digital course through their own tools or at internet cafes.
Importantly, managers regularly connected with their teams to teach, coach, and discuss how to apply relevant capabilities. This helped one team in Kibera use a “solving problems” module to identify root causes of their clinic’s drug stockout challenges.
Success stories like these—and far more personal ones—were shared to reinforce how capability building can be owned by frontline teams and made relevant to daily work. Certificates of completion and other forms of recognition also provided incentive to own their professional development.
Effectively mobilizing an organization around capability building can be critical for nonprofits to grow their impact. However, these changes are often framed as an additional “ask” of employees to shoulder the burden. By mobilizing around a “why,” creating the space for autonomy and accountability, and encouraging teams to connect and own their development, nonprofit leaders can use capability building to catalyze impact.
The authors wish to thank Anne-Marie Frassica, Andrea Olmos, and the entire McKinsey.org team for their contributions to this post.
McKinsey.org is a philanthropic initiative of McKinsey & Company that brings the Firm’s capability building solutions at no cost to nonprofits that are accelerating sustainable, inclusive growth around the world.