From Adequate to Outstanding Performance - Some Propositions on Nonprofit Organization Life Cycles

In the nonprofit world, aspirations often exceed capacity. Many nonprofits obtain "adequate" results but spend much of their energy trying to survive. They operate steadily from year to year, perhaps even growing marginally, but they rarely cross the threshold to truly outstanding performance.

In stark contrast, some nonprofit organizations, even very small ones, manage to have a significant impact on the consumers they serve, and become recognized as exemplars for other organizations to follow. They are widely known and respected for the quality of the services they provide, and they actually influence the behavior of other organizations through their services and their advocacy. Their outstanding performance is not necessarily dependent on the size of their budgets or staffs. Sometimes even relatively small organizations are able to leverage their modest resources to achieve a reputation for leadership in their chosen fields.

This brief report addresses the question: What distinguishes nonprofit organizations that achieve "outstanding" results from those that achieve "adequate" results? Our purpose is loosely analogous to that of Jim Collins who, in his best-selling book Good to Great (2001), identified characteristics that distinguish "great" business organizations from those that are merely "good." Because Collins studied businesses, not nonprofits, he had the benefit of being able to measure outstanding performance precisely, which he defined as returns on investment relative to the performance of the general stock market. Collins and his team of 20 researchers spent five years analyzing these outstanding business organizations. Collins has recently applied the principles derived from his research on businesses to nonprofits in a new monograph entitled Good to Great and the Social Sectors.