Is growth really something to be worshipped by a not-for-profit?

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By Tom Collins

 For over 30 years I have observed the Australian not-for-profit sector from both the perspective of a senior leader in a variety of organisations and, more lately, as a consumer of services.

Over this times I have seen a number of changes in various parts of the sector but one constant that has intrigued me has been the sectors unwavering worship of growth.

Call it ego, call it what you will, but Boards and, more particularly, CEO’s seem to be hardwired to pursue growth. One site is not enough we need two, eight, twenty-four. Operating in one state is not acceptable we must go inter-state, let’s make that nationwide, why not international?

This growth mania has been fuelled by Federal and State Governments and other funding bodies who seem to share the view that if they fund one good project in one community and it can be replicated elsewhere for an incrementally lower cost, they will be delivering more bang for the taxpayer dollar.

Sounds good in theory but I would argue it doesn’t quite work that way in practice as it seems to me two areas are dinged when growth is the quest – social impact and cash!

Let’s firstly look at social impact.

The reason a program is successful in one community is so often the result of an amalgam of factors such as passionate staff, a supportive community, local politics and even geography. To assume that this delicate mix can be replicated elsewhere is naïve at best. Also, we forget that leaders of small organisations can adopt a “hands-on” approach with programs – continually tweaking them to suit local community demand. This becomes almost impossible as the organisation grows. Program delivery is entrusted to less experienced and often less aligned staff – as a result a softening of impact is almost inevitable.

Cash is the other casualty.

As a merchant banking colleague once told me … “Growth is a Hoover of cash”. By necessity systems become more complex. Staff recruitment, retention and training costs escalate as do a host of others such as – travel and accommodation costs, marketing costs arising from the need to establish a brand in a new area. Revenue is also hit. This is particularly evident with organisations that rely to some extent on community contributions.

So, before an organisation dives into a growth strategy, could I suggest the Board ask a few simple questions of themselves and their CEO, such as:

  •  Are we and our stakeholders happy with the current programs?
  • Why was the organisation established and are we still strongly aligned to the cause?
  • Will our social impact be threatened by getting bigger?
  • Could the organisation outgrow the skills of the board, executive, employees, and advisers? What is our strategy then?
  • What values might be threatened by a growth strategy?
  • What can our organisation do by being bigger that it cannot now?
  • Can someone else accomplish that outcome in a new area? Why does it have to be us?
  • What are the true costs involved in getting bigger?
  • What is the potential impact on organisational focus?

Can I stress, I am not anti-growth. All I am saying is that Boards need to be very circumspect when someone suggests going down the expansion road and have the case for and against independently examined.

Have you worked in an organisation that had a high growth strategy? What worked and what didn’t?

About the Author – Tom Collins has extensive management experience in cause-based organisations and is now retired. If you would like to submit a Guest Post please review our policies and guidelines first.

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