Performance Culture is Profitable for Nonprofits

This article was originally published on the Philanthropy Journal.

Successful businesses thrive on a performance culture. Everyone from the board chair to the newest hire understands how the company defines success and how their work contributes to it. An emphasis on measurable results and clear accountability brings a clarity of purpose to the whole organization. Every employee and every team can see the impact they have on the bottom line.

That’s easier in business, where the goals are widely understood and easy to measure: grow revenue, increase profits, gain market share. But nonprofits can build a high-performing culture without sacrificing the mission. It starts with translating grand visions—ending homelessness, improving public health, combating poverty—into manageable goals and strategies.

Set the right goals, and you clear the way for highly motivated work and continuous improvement. Get it wrong, and you bog down an entire organization in well-meaning but futile gestures. Get it wrong, and you end up rewarding effort instead of effectiveness.

When I came to the College Board a little over six years ago, the organization was rightfully proud of its mission to connect students with opportunities beyond high school. Programs had matured over many years to serve that ideal, and much of the work was enormously valuable. But it wasn’t always evaluated well. There wasn’t enough emphasis on rewarding high-value programs and rethinking less effective ones.

A strong sense of mission is great, but it’s no substitute for rigorous assessment. Seeing more students go to college is simply too broad to be useful—too many variables, too much lag time and too little precision to assess the impact of our programs. How do we know which parts of our work are making a difference? What student or parent behaviors are we truly influencing? And do we know if that’s the right way to tackle the problem?

Answering those questions is the key to creating a performance culture. For College Board, that meant breaking the grand mission into smaller problems. “Clearing a path for all students to own their future” is great, but we broke that winding path into pieces we could tackle and measure. We set goals for getting more students to create a college list, and for getting low-income students to apply to more schools. We redesigned our communications, made our fee waiver process simpler, and started offering unlimited score sends.

And we continuously assessed our data to see what worked. By improving our approach based on hard information, we made a big dent in the disparity between low-income students and their wealthier peers. Everyone at the College Board could see how their work connected back to the core mission.

Disciplined goal-setting also allows us to direct resources where they can make the biggest difference. Those choices are often the most difficult for any nonprofit, because they involve real trade offs. For-profit companies make those shifts all the time, expanding more profitable lines of business and shuttering less profitable ones. Nonprofits need the data and rigor to make similar decisions not for profitability, but for impact. If you have two initiatives doing good work, but one
of them is measurably more effective, it makes sense to move people and money where they’ll do the most good.

People respect tough calls if they’re made with transparency and a clear sense of purpose. Over the last few years, the College Board decided that Advanced Placement classes needed new resources. A lot of experienced AP teachers will be retiring over the next decade, and we’re making a big push to expand AP into rural schools where there may be fewer supports for teachers. Creating a bank of practice tests, study guides, and an advanced system for tracking student progress should make life easier for current AP teachers and smooth the transition for those new to the AP classroom.

It’s also a huge investment, involving not just millions of dollars and major staff mobilization at the College Board, but a lot of effort and goodwill from teachers and school administrators around the country. It meant putting some other priorities on hold so we could focus on a big project.

The end result will be many more students earning college credit through AP. We’ll see more schools, especially in smaller districts, able to sustain and expand AP offerings. And all of that improves the odds that students will succeed in college—something we’ll be able to track closely in the years ahead.
Being able to measure those things, and to show how our investment connects to our core mission, is key to fostering a performance culture. It makes our priorities clear to staff and stakeholders, and lets all of us know whether we succeeded or missed the mark.

There’s not much romance in a profit-and-loss statement, but there is deep satisfaction when a nonprofit’s worthy mission is spelled out in clear and measurable metrics. That’s how progress happens — one measurable inch at a time.