The Alliance for Children and Families, a major trade group, has received a four-year, $5,375,000 grant to help 19 of its 350 members weave long-term strategy into daily operation as much as possible.
“If this bears out what we expect, it has game-changing potential” for family services, said Alliance CEO Peter Goldberg.
Alliance, which is headquartered in Milwaukee, is developing two requests for proposals for the majority of the grant. Nine larger Alliance members will receive funds to help hire a chief strategy officer. Ten smaller organizations, which would not be able to sustain such an executive-level position beyond the life of the four-year grant, will receive “lighter touch interventions” such as strategy coaches or development of data systems.
The holding company for the Alliance – Families International, which also oversees three other nonprofit groups – will hire its own chief strategy officer as part of the initiative.
The goal for the strategy officers is to “begin charting their future direction,” and establish the mentality of a “365-day effort to tie in strategy,” Goldberg said.
They can also help develop inter-organizational efforts in service areas and “ascertain potential for mergers and acquisitions,” Goldberg said. Many Alliance members are large service agencies with sound revenue streams, and the state budget shortfalls have endangered the financially weaker providers in their areas.
“For better or worse, it’s not a good time for ‘Small is beautiful,’” Goldberg said. “It’s just harder to have the necessary infrastructure. We will see much, much more [merging] than we have in the past.”
The grant was developed over two years of conversations between the Troy, Mich.-based Kresge Foundation and the Alliance, and Goldberg said the Alliance interviewed leaders from 50 of its member agencies to gauge interest in the project.
The underlying theory is that organizations cannot achieve long-term success and coherence by not factoring organizational strategy into daily decision-making.
“A CEO hires a chief operating officer who is responsible for programs and services, a chief financial officer and a development officer,” Goldberg said. “When you think about strategy, who supports the CEO on that?”
The dominance of government contracts, which often strictly tie dollars to program services, has compromised the ability of many nonprofits to invest in building capacity, Goldberg said. “If you over-invest in programs but under-invest in strategy,” Goldberg said, “you’ll have good programs today, but what about tomorrow?”
Kresge has historically funded capital projects for nonprofits, such as construction and expansion of facilities. But in recent years the foundation has responded to the recession and state budget crises by supporting capacity-building for direct service projects.
“This grant is a reflection, I think, of Kresge finding some new ways to fund capacity,” Goldberg said.
Alliance has 350 members in the United States and Canada, a roster that includes many providers of foster care, Head Start programs and outpatient mental health services.