Pacific Business News

September 3, 2004

Project design is critical to a nonprofit’s stability

by Sally Little

Tax-exempt nonprofit corporations are notably understaffed and undercapitalized.

These organizations seem to accept these circumstances and may unwittingly perpetuate them.

Nonprofits have been criticized for engaging in projects that exceed their internal capacity and for being inattentive to their financial bottom lines. Some have suggested that nonprofits should be more “businesslike,” with the assumption that projects would then be adequately staffed and well funded. Yet, these conditions exist even in nonprofit organizations that have hired senior management from the corporate community.

While recently providing technical assistance to grant applicants, I noted their lack of training in project design, unbridled passion for their proposed programs and a desire to be competitive with the other applicants. These three elements place nonprofits in danger of perpetuating understaffed and under-funded projects.

Finding a remedy for these elements is challenging, but the following tips should prove helpful:

* Establish clear and specific goals or outcomes. These will guide the entire program design process and answer the critical question:Why are you embarking on this project?

* Create a realistic staffing pattern. This pattern determines the number of employees a nonprofit needs to effectively implement and manage the project in order to achieve the desired goals or outcomes. If your project provides services in one-hour increments, such as counseling sessions, a staffing pattern is relatively easy to ascertain.

For example, there are 2,080 work hours in a year. When vacation, sick leave, staff development and meetings are taken into consideration, an employee is able to see clients approximately 70 percent of the time or 1,456 hours. If your project requires 2,912 service hours, then you will need two staff.

Many projects, however, have more complicated staffing requirements. Perhaps your nonprofit plans to offer community-based parenting workshops in Central Oahu and the North Shore. A decision is made to hire employees rather than use contracted hourly trainers. To determine your staffing requirements you must actually count the number of hours needed to provide this service. Calculate two hours of preparation for every hour of instruction; factor in travel time, meetings and staff development; and the number of hours needed to recruit people to participate in the workshops. This includes person-to-person meetings with potential participants as well as meetings with other agencies.

* Develop your budget. Your budget should be based on your goals or outcomes and proposed staffing pattern. As a rule of thumb staffing costs should represent approximately 80 percent of your budget. Many nonprofits simply allocate the remaining 20 percent of the proposed grant monies to their operational line items without determining whether the monies cover all of the costs of the program. Some progra ms have higher operational costs especially those serving meals as an incentive to attract participants. Care should be taken to realistically estimate these expenses.

* Check the feasibility of your project design. Revisit your goals or outcomes, staffing pattern and budget, and determine whether the project design will yield a successful program. If not, you may need to reconsider all three elements again until you have achieved a desired balance.

* Avoid unrealistic promises in your proposal. With the lead of their management teams, nonprofits should create organizational cultures that encourage realistic program designs flavored but not dominated by passion. Overworked staff who have inadequate budgets compromise the integrity of their programs and diminish the impact these project make on the clients they serve.

* Emphasize outcomes rather than the size of your proposed project. Recognize that the people reading and scoring your grant proposal are probably volunteers without experience designing an d implementing a nonprofit project. Grant applicants may fear that their evaluators will be influenced by the size of the project, and the applicants subsequently present unrealistic program designs. However, as an applicant you want to draw the evaluator’s attention to the greater impact that a smaller well-managed project will have. In some situations, the quality of the project is more important than the number of people served.

* Keep your passion in check. Nonprofit directors face unmet needs and community issues that require complex solutions. This results in a strong tendency to overextend staff and financial resources. These projects result in high staff turnover and they are difficult to sustain.

Writing realistic proposals that alleviate the pitfalls of understaffed and under-funded projects is challenging. Yet, nonprofit organizations need to create and build on high-quality projects for our communities and the people they serve.

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