Which Comes First: Leadership or Money?


I’ve got a classic chicken-or-egg challenge for you. For an organization to make “the leap of reason,” which comes first: courageous nonprofit leadership or courageous, results-driven funding?

In my column this month in VPPNews—and in a speech I will deliver next month at the Cleveland City Club (we’ll send a link to the webcast when it’s available)—I assert that leadership trumps funding. I’m convinced that nonprofits that are working the hardest to deepen their impact are, more than anything else, constrained by a lack of access to the kind of talent they need to rise to the next level of effectiveness.

In my experience, high performance doesn’t happen without inspired, passionate leaders. Best practices, good models, and strategic plans are wonderful resources, but they only really work as promised when they are in hands of leaders with the right perspectives, values, and skills.

Have no doubt, we will make it much harder for these committed leaders and their organizations until we have in place public policies and foundation initiatives that pay for good outcomes rather than just paying for activities. So I don’t want to let funders off the hook. As you will see in my VPP News column, I believe there are many things that funders can and should do right now to help encourage great leadership to produce great outcomes. For example, funders can provide fellowships for nonprofit and public-sector leaders to spend time in other organizations known for their management effectiveness and high performance. Or they can fund the creation of immersive weeklong learning experiences where nonprofit and public-sector leaders come together for highly focused programs on clarity of focus, theory of change, and managing to outcomes.

After reading the column, Leap of Reason essayist Isaac Castillo added a great suggestion for funders: “Many nonprofit leaders have been locked into the ’generating data for funders’ mindset for so long, that they simply have lost the drive to think and act on data. Funders should work to reignite that spark. Otherwise the data will simply go unused.”

I am sharing these and other suggestions to encourage funders to see talent development and other core support for nonprofit leaders as a critical strategy for anyone who truly wants to help solve—rather than just salve—big social challenges.

And now for some brief updates from the Leap of Reason community:

  • Big congratulations to our friends at Urban Institute, Child Trends, and Social Solutions on the recent launch of PerformWell, which provides an impressive array of free tools and insights for measuring program quality and outcomes. As Bridgespan’s Matt Forti concluded on the SSIR blog, “It makes it considerably easier to tackle the challenging but crucial task of understanding what and how to measure…. It will be particularly helpful for smaller organizations that do not otherwise have access to measurement expertise.” Please check it out.
  • The Mason Center for Social Entrepreneurship is embedding Leap of Reason into its course offerings. It will become a core text in the gateway course for all students who pursue a Master’s degree in Social Entrepreneurship, in the center’s 7th Annual Social Innovation Program, and in a new distance-education offering that will be made available next year to students around the globe. Recently, it was required reading for participants in the center’s workshops for leading anti-poverty agencies in Virginia. Center Director Greg Werkheiser reports, “We asked participants to rate their comfort level on a ten-point scale with the concepts of managing to outcomes when they were selected to participate (before readingLeap of Reason and attending the workshop). The average rating was 4.2. Upon completion of the workshop the average rating was 7.9. Not scientifically definitive, but also not bad for one great book and five hours of work! We’ll be checking in with them in six months to see if they have done anything with their new knowledge.”
  • Last week, P/PV Senior Vice President Wendy McClanahan brought to Capitol Hill the case for federal investment in helping nonprofits develop the discipline of performance management. In her testimony (which she delivered on behalf of P/PV President Nadya Shmavonian) to the House Subcommittee on Commerce, Justice, Science and Related Agencies, she stated, “Public sector leadership is needed to elevate the importance of performance management and improvement, given that coupling strong performance management and implementation of research-based practices is the only way we can collectively ensure that good money doesn’t follow bad.”
  • We applaud the work that the state of Connecticut is doing to develop a basis for more rational, evidence-based funding decisions. A new platform being developed by the University of Connecticut, with funding from a quasi-governmental agency called CHEFA, will soon give public officials the ability to see gaps and redundancies in social services and allow nonprofits to align their metrics with the ones used by state agencies. In the words of a recent Hartford Courant editorial, “As Nonprofits Struggle, Better Data Will Help,” “The vision is almost beatific—to have planning, policy, and budgeting in Connecticut driven by actual information, rather than intuition, special interests or inertia.” To learn more, visit theConnecticut Nonprofit Strategy Platform.
  • Over the past six months, our longtime strategic partner McKinsey & Company has been studying the opportunity for social impact bonds—an innovative, results-based funding mechanism first implemented in the U.K. McKinsey will be releasing its final report, From Potential to Action: Bringing Social Impact Bonds to the U.S.,later this spring. To begin the conversation, McKinsey has published a short articlethat describes how social impact bonds work in support of scaling of programs that have been proven to work.
  • Dr. Claire Gaudiani, the former president of Connecticut College, shared that “I used Leap of Reason to frame my presentation to the year-long Hastings Centerstudy group I have been involved with. The group has been working toward making a set of well-thought-out [recommendations] for the future formulation of both budget priorities and priorities for national attention.”

As always, we’d love to hear from you if you’re putting Leap of Reason to use in your work or if you have relevant news items to share with this community of reasoned leapers.

—Mario Morino