Youth Services Have Growing Pains – New Study
Monday, 30th May 2005 at 1:05 pm
A US study has found that for Not For Profit’s serving young people, expansion is a daunting task. The growing pains were uncovered as the study analysed 20 youth-focused organisations that had successfully navigated expansion.
The US-based Edna McConnell Clark Foundation sought the help of the Bridgespan Group to answer a question both organisations say has been puzzling them for the past several years: What happens when a youth-serving organisation attempts to grow larger and expand its services?
To find out, Bridgespan examined the experiences of 20 youth-serving organisations that have successfully expanded their operations.
What the research discovered, while far from a full picture of the dynamics of growth, included several surprises. Among them was the finding that any youth-serving Not for Profit that attempts to grow so that it can serve more young people should be prepared for a roller coaster ride that at times might lead management to question why they started down this path.
And just as important, the study also found that any organisation willing to navigate the “snakes and ladders” of growth can emerge larger, better staffed and structured, although still struggling to maintain sufficient funding to ensure their long-term viability.
The findings highlights include:
– Rather than starting with a detailed plan, most organisations grew in response to opportunities that presented themselves. For instance, some organisation chose to grow simply because they found someone in another city willing to open a chapter or affiliate.
– Unlike in the for-profit sector, Not for Profits that expand their operations don’t necessarily benefit from economies of scale or experience. Rather, NFP’s generally find that their costs to deliver services actually increase as they hire extra staff, or make investments to improve their programs (such as staff training and systems to track progress and measure results).
– Even after successfully achieving growth, many organisations find their financial situation extremely fragile. For example, of the 20 groups that Bridgespan studied16 had operating reserves of four-and-a-half months and eight had two-month reserves or less. None had more than nine months of operating expenses on hand.
– As organisations grow, the need to professionalise staff and systems increases, so much so that passionate commitment to their missions—and sheer will—from the leader and key staff were no longer sufficient to allow organisations to continue functioning well. Significant changes in processes, procedures and roles were required, not only on the part of the leader and staff, but also on the part of the board. Among the most frequent changes is the addition of a chief operating officer.
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