How many times have you thought that a nonprofit you support should be managed “more like a business”?
It’s a fair bet that, for most nonprofits, you’re not the first person to have had that thought. And it’s an even better bet that that nonprofit has already been the “beneficiary” of at least one management reform effort.
Now more than ever, nonprofits are being asked—and expected—to perform in a results-oriented, businesslike manner. The expansion of “charitable choice,” the imminence of widely available school vouchers, and the boomlet in “venture philanthropy” all suggest that funders, public and private, expect there to be an even greater convergence between nonprofit mission and for-profit management technique in the near future.
Along comes scholar Paul Light to ask the sensible question: How susceptible have nonprofits been to improvement through management reform? Light looks at how organizations have historically responded to the periodic waves (here, “tides”) of reform initiatives. He breaks these tides down into a handy set of classifications, and then teases out the plusses and minuses of each reform approach. They are useful metrics, these categories, and his conclusions, while neither rosily optimistic nor particularly cynical, provide a helpful framework for evaluating the effectiveness of a particular approach to reform.
They also suggest that “reform” is not in itself a magic word, despite the talismanic powers attributed to it. “There is truly nothing new under the sun by way of management reform,” says Light. Management fads and manias can produce as much churn as good. In other words, however giddy you might feel after reading the latest management guru’s book during the flight back from the Renaissance Weekend, take a few deep breaths before implementing its recommendations upon your organization, or upon those of your grantees.
Light is director of government studies, as well as director of the Center for Public Service at the Brookings Institution. He is one of the few high-profile political science types who talks about the big picture but still actually gets down into the weeds of data. That is, he’s a non-bloviator in a sub-discipline thick with bloviation. He’s also had the benefit of working on both sides of the funding table (he was director of the public policy program at the Pew Charitable Trusts), and that experience can be helpful in sorting through whether a given nonprofit “reform” effort is genuine or merely the rearrangement of deck chairs.
Light’s most recent book, The True Size of Government, is a good indicator that he can be trusted to puncture conventional wisdom. He showed there that the much-vaunted decrease in the number of government workers is attributable almost entirely to reductions in the Department of Defense, and that the equally lauded reduction in the number of government middle managers is due in large part to the reclassifying of many of these people as “team leaders.” (Light cuttingly observed that “There appear to be more team leaders today in government than in all of Little League, Pop Warner football, and peewee soccer combined”).
The four classifications of reform he uses here are somewhat rough (though much more useful than, say, “carrot” and “stick,” which is pretty much what one would be left with if the categories were reduced any farther). “Scientific management” keeps its focus on studying the “best practices” in a given field. The emphasis is on establishing industry standards and benchmarks. In “liberation management,” measuring “outcomes” is the key. Think of the United Way’s current obsession with quantifiable outcomes, and the push for such measures introduced by government outsourcing of social service contracts. The “War on Waste” school of management reform seeks higher organizational performance through re-engineering to create greater efficiencies. Mergers, restructurings, downsizings (not exactly a common occurrence in the nonprofit world these days), and cost controls are the tools of this subset. Finally, the “Watchful Eye” approach is centered on “exposing” bad or inefficient practices to the “sunshine of public disclosure,” which serves as a potent and “fundamental disciplining tool.” Think Ralph Nader, or the calamity most dreaded by any self-respecting nonprofit: a front page expose in the morning paper.
Light clearly explains the strengths and weaknesses of each, and the way that his categories interact: “The standards movement helps identify what is wrong with the systems, the war on waste helps identify the waste and incompetence created as a result; watchful eye makes the problems painfully apparent for all to see, and liberation management instructs the sector on how to discipline its wayward members.”
Light would have us be wary of those who promise perfect order and efficiency in nonprofits through the “mirage” of complexly “ordered organizational worlds,” which, as with government and industry, invariably “drown in the sands of bureaucratic excess.” He also recognizes the limits of reform models: “There can be such a thing as too much reform.”
Light is a good writer, and he does an admirable job here of navigating some particularly treacherous prose waters, steering nimbly between the Scylla of business management-ese and the Charybdis of nonprofit cant. There are only occasional moments when those two beasts of wonkspeak collide, and the results are predictably painful.
It may be significant that this is the first entry in the Brookings Center for Public Service’s catalogue to focus exclusively on nonprofits, suggesting that “public service” somehow includes nonprofit work. That elision between the government and nonprofit spheres doesn’t seem to trouble Light overmuch. Maybe it should.
This slim volume from the Brookings Institution Press is not for everyone. It is certainly not, as the title might appear to suggest, a “how-to” on nonprofit management (though, at a certain level there are some fine “how not to” prescriptions). But in providing a thoughtful, sober, and comfortingly knowledgeable perspective on how efforts to change organizations have worked or not worked, Light helps us think about how to think about management reform.
Tom Riley is associate editor of Philanthropy.