Why Stability Isn’t Always a Good Thing: Nonprofits as Complex Dynamic Systems
When it comes to the future of our communities, nonprofits should be of considerable interest and concern. Since we rely heavily on their associated outputs, especially for our most vulnerable communities and social sectors, we have a responsibility to ensure their continued viability and efficacy.
Our primary mechanism for monitoring and optimizing nonprofits is through board governance. Whether via boards of directors, trustees, school boards, or advisory committees, we expect these groups of highly qualified individuals (however measured) to ensure the continued effectiveness, efficiency, and sustainability of organizations, making necessary decisions, adjustments, and investments while monitoring the nonprofit’s health via ongoing assessment and evaluation.
By assembling what we perceive to be highly competent boards comprised of well-educated and/or respected individuals, we believe that our organizations are in good hands. And when it comes to assessing and monitoring their effectiveness, we assume that their efficacy is reflected largely by their ability to obtain funding and sustain their respective work. Since grants and direct contributions are the primary sources of funding for community organizations and nonprofits, they must continually make a case for their viability, complying with funder expectations and demonstrating the quality and need for their work via programmatic outputs and impacts. Accordingly, if an organization is able to thrive and continue to support its respective efforts, then it must be a doing a good job, and should be viewed as an important community asset worthy of ongoing support.
This thinking is both circular and dangerous, given the prominent role that nonprofits play in our communities and larger society. Clearly, fiscal stability is often an important indicator of organizational success. Yet when it comes to the world of nonprofits and social needs, organizational stability, in its traditional manifestations, can actually inhibit optimization of impact.
In order to explore this assertion, we must step into the fascinating world of complex dynamic systems, a field of inquiry that draws on insights from diverse fields of study including biological systems, computers, AI, cognitive science, and other domains towards the goal of understanding and modeling approaches that yield optimal performance and efficacy.
If you think of nonprofits as systems, with inputs, outputs, and internal programmatic functions, you might assume that they are largely self-regulating. If the organization is doing a good job and fulfills its purpose and mission, then it should thrive and remain relevant and robust. Conversely, if its mission and work are no longer effective or in alignment with the needs of the community, then its ability to sustain itself should be compromised, favoring emergent states of adaptation and nimbleness through sensitivity to both internal and external factors, and an ability to flex and pivot as needed.
However, rather than programmatic pivoting, organizations have a tendency to layer themselves in complexity. Even though they may start with a clear and simple mission, they tend to become increasingly complex over time. Because of their inherent need for self-funding, which is largely tied to specified programming, their ability to grow or sustain themselves often leads to new layers of programmatic and staffing complexity.
On a systems level, we rarely see parameter setting for the number or diversity of concurrent programs. In other words, the notion that adding new programs inherently necessitates the cessation of existing programs is rare at the policy or leadership levels. Instead, the assumption is that existing programs are important and necessary, and should be maintained if at all possible. Accordingly, the need to self-sustain and grow becomes the functional focus of the system, with leaders and boards selected and maintained based on their ability to meet this expectation.
By definition, as organizations become more complex from an infrastructure and programmatic standpoint, they become more opaque and less sensitive to internal and external changes. This in turn can make them more rigid and unable to adapt. Although when viewed through the lens of community needs, this tendency should trigger concern and a sense of vulnerability, it is not necessarily perceived or treated as such. Because we have not developed sensitivities to these types of metrics or systems-level fragilities, notions of stability and fiscal health remain our proxies for efficacy. As long as our systems are able to feed and sustain themselves, we can enjoy a false sense of security associated with this notion of stability.
In the end, organizational leaders and the boards that sustain and steward them are ultimately responsible for the future of our community organizations and nonprofits. Perhaps by adopting new levels of programmatic discipline and restraint we can force our organizations to be more nimble and responsive, and less susceptible to the dangers of layered complexity.