Policy and Sustainability

One of the things we often write and talk about is the interplay between different facets of an organization and the fact that each component of an organization interacts with and materially affects all other aspects: in other words, organizations function as complex systems where there is constant interaction of their multiple parts in sometimes random and unforeseen ways.

Looking at organizations through this complexity lens highlights the critical importance of policy development. In a world where non-profit organizations are almost continually dealing with issues of scarce resources, policy development can sometimes be seen as something peripheral to urgent sustainability issues: a governance piece that gets addressed either when policies become seriously outdated or when other, more critical matters are dealt with. The problem with this approach is that, because policy touches every aspect of an organization, a lack of and/or outdated policies may, in fact, be creating the more critical and urgent matters and, in fact, may be exacerbating the organization’s scarce resources. Instead of looking at policy development as a project unto itself – and an up-to-date policy manual as a “to do” item – it should be viewed as a foundational piece that can affect revenue development, HR management and retention, donor stewardship, and community engagement : many of the key performance indicators of an organization.

To highlight the impact that policy has on organizational outputs, consider what can happen in the absence of comprehensive policies. Employee burnout and low employee engagement due to unchecked work schedules and unclear performance expectations (which can lead to turn-over with very real costs to the organization); negative public perception of an organization’s financial management standards or employment practices (which can materially affect fundraising revenue); arbitrary Board and Management decision-making (which can consume endless hours of valuable organizational time debating and/or revisiting decisions and have critical impact on organizational efficiency, while creating ongoing organizational conflict).

The cumulative effect of these pieces can be detrimental to organizations, but often times the outcomes are not linked back to policy deficiencies (or other foundational issues). Fundraising shortfalls, for example, are often analyzed in isolation, with the focus being on the fundraising mix, fundraising materials and/or the fundraiser him/herself. The links between the efficiency and standard of operations, public perception, and fundraising may not be considered, but represent very real relationships. Where policy plays a critical part in establishing organizational standards, ensuring a point-of-reference for effective and efficient decision-making, and ensuring that the community experience with the organization is first-rate, it should be identified as an ongoing and critical priority area for organizations.