Nonprofit Lifecycles

2001, 139 pages including a bibliography. Stagewise Enterprises, Inc., 1160 Tonkawa Road, Suite 15, Long Lake, MN 55356.

Have you ever been frustrated by the way in which the abstract terms "capacity" and "capacity building" get tossed around in the nonprofit conversational world, wondering what exactly the speaker means? Then this book is for you.

Well-known organizational development consultant Susan Stevens spent many years in a prior career as a family counselor to troubled adolescents. She draws upon stage theory, used for the last century as a model of human development and in other fields, to craft a theoretical model of normative stages of development within nonprofit organizations. This framework was set out in an earlier work, Growing up Nonprofit, that outlined the predictable tasks, critical junctures, and milestones that result in characteristic behaviors at each stage of organizational life. This book further expands the lifecycle paradigm's use as a diagnostic, management and investment tool with rich, illustrative material from Stevens' lengthy consulting practice.

Part One of the book reviews the theoretical foundations of the lifecycle model, sets out the seven stages of nonprofit capacity, and presents the diagnostic framework. As illuminated by Stevens the lifecycle model is not a rigid formulaic approach, but a flexible diagnostic tool for understanding a series of dynamic stages. She posits seven stages — idea, start-up, growth, maturity, decline, turnaround, and terminal — but has no conflict with others who work with as few as four or as many as ten stages. The stages are not necessarily sequential or evolutionary (e.g., many organizations move from start-up to terminal or spend decades in the start-up phase). High performance in one stage would be underachievement for another, and is no predictor of continuing high performance.

From the lifestyle perspective, optimal capacity would be defined as the organization's ability to achieve alignment across five dimensions — programs, management, governance, resources, and systems — at each stage of life. It asks, in other words, if your organization is performing at the appropriate level for its stage of development in each of these five functional areas. Otherwise, the “stalled” capacity area will continually hold the organization back.

Too often in the arts we encounter mature artistic programs with startup governance and systems and growth stage resources. Another way in which the arts field differs somewhat from the generic nonprofit sector is that arts organizations in the idea stage are not necessarily driven by “identifying an unmet need” so much as by a personal desire for self-expression. This, no doubt, is why many more arts organizations are started than ever reach maturity because they stumble in creating a relationship with the marketplace.

One of the values of the lifestyle framework is that it helps managers, boards, and funders set realistic expectations and serves to depersonalize organizational weaknesses. It can neutralize challenging issues by casting them as normative to the stage of the organization's development, rather than peculiar to the individuals involved, thereby releasing more organizational energy for joint problem solving.

In Part Two, Stevens targets nonprofit managers and board members and shares her extensive consulting experience in chapters that deal with management issues such as hiring, financial goals, and board development at different lifecycle stages. Others cover “founder separation,” second-stage management, and how to affect a turnaround — all with excellent case study illustrations and accompanying discussion questions.

Part Three targets funders with advice on capacity grantmaking, investing in capacity initiatives, and using lifecycle self-assessments as a tool in grantmaking. Stevens cautions that one-size-fits-all capacity-building interventions such as strategic plans, board development, and operating reserves may not be universally successful. She goes on to address the relationship of capacity to organizational change and the requisite internal and behavioral dynamics that must accompany sustainable organizational change with advice for consultants on how to identify and reframe the organization's mindset in working with them to create new habits.

Steven's application of the lifecycle analogy to the nonprofit sector adds insights for all those who care about the development of a healthy nonprofit sector by showing how to tailor investments, consulting interventions, and management decisions appropriate to where an organization is. For anyone teaching courses in arts management, organizational development, or strategic interventions, this book will provide valuable material. The publication is clearly written and organized, well designed, and has a sewn-binding so it doesn't come apart when you bend it over to read on the airplane. The only mystery is who are the people who supplied the quotes that start each chapter? In summary, to quote Stevens' own words-to-the-wise-grantmaker — “capacity matters” and “capacity doesn't come cheap.”

Melanie Beene, James Irvine Foundation