Charities in Crisis: The Charitable Industries Most Pervasive Problem

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Comfortably Uncomfortable: The Path to Professional Excellence​

This article advocates for embracing discomfort in the workplace as a catalyst for personal growth and professional success. It suggests seeking roles where individuals feel moderately uncomfortable, pushing them to expand their skills and thrive in a “growth zone.” The importance of balancing discomfort to avoid burnout or stagnation is emphasized, along with the role of organizations in fostering environments that encourage growth. Ultimately, embracing discomfort is portrayed as a pathway to fulfillment and continuous advancement in the modern workplace.

The Sector Convergence Model

In tackling the intricate challenges that often transcend sectoral boundaries and functional divisions, the Sector Convergence model has emerged as a strategic framework offering innovative solutions. Traditional problem-solving methodologies and industry practices often fall short when confronted with the complexities of modern business landscapes. The Sector Convergence model addresses this gap by providing business leaders with a holistic approach that integrates insights from diverse industries. Particularly effective for addressing multifaceted problems that defy standard practices, this model fosters collaboration and leverages the strengths of different sectors.

From Discord to Harmony: Bryce Porter’s Leadership in the Kawartha Music Foundation’s Restructuring

Throughout my extensive life as a musician, performer, youth advocate, and patron of the arts, I have developed a profound commitment to fostering the growth of young individuals. My passion particularly lies in recognizing the substantial benefits that music education contributes to the personal and professional development of youth. While initially engaged for a consultation on organizational governance, it became evident that the organization required more comprehensive support than initially anticipated. In alignment with my personal values, I chose to undertake the project pro bono. The overarching objectives of the initiative were threefold:

  1. Establish financial sustainability for the organization.
  2. Develop a business model that aligns seamlessly with its new scale and values.
  3. Facilitate ongoing program expansion while concurrently reducing overall expenditures.

Background Information

The Kawartha Music Foundation, established in 2002 as a non-profit organization, oversees diverse music education programs. Its commitment to fostering the musical, professional, and personal development of numerous children aligns with the principles outlined in the Not-for-Profit Corporations Act. With a significant grant from the Ontario Trillium Foundation (OTF), the organization’s revenue more than doubled in just one year, leading to vastly increased organizational complexity.

Facing the imminent conclusion of the OTF grant, the board of directors embarked on a strategic initiative to cultivate a sustainable business model and enhance operational efficiency. This comprehensive 18-month project, coinciding with the remaining duration of the OTF grant, aimed to address the evolving size and complexity of the organization. The impending decision point marked the juncture where choices about the continuity of fully subsidized programming needed to be deliberated upon judiciously.

Objective

The Kawartha Music Foundation (KMF) underwent rapid growth, surpassing its previous scale and organizational complexity. However, the organization lacked the internal expertise to effectively manage this expanded scope. The transformation encompassed critical functional domains, including program delivery, financial management, revenue development, compliance/corporate governance, and business operations. This case study delves into the structural elements of the consultation conducted for KMF, examining the profound impact these strategic changes had on the overall organization.

Methods and Approach

In pursuit of the board of directors’ objectives, I employed two key professional methodologies: Agile and Lean Six Sigma. Agile, chosen for its rapid adaptability, proved essential due to the urgency of the transformation. Operating under fixed outcomes, agile methodologies facilitated swift adjustments based on stakeholder feedback, real-world financial considerations, and logistical factors. Complementarily, Lean Six Sigma emerged as an apt choice for nonprofit implementation, addressing the sector’s revenue challenges and the fluctuating grant landscape.

Central to this process my “Sector Convergence Model,” a business approach fostering collaboration among diverse sectors to achieve ambitious goals. This model integrates skills, knowledge, and resources from traditionally independent sectors, aiming for a unified and interconnected strategy leveraging each sector’s strengths.

In this consultancy, I drew upon expertise from the enterprise software, finance, and restaurant sectors. Key enhancements encompassed the introduction of a work-unit model, standardization, weekly Key Performance Indicator (KPI) analysis, and a prioritization of consistency. This comprehensive approach was derived from professional insights across varied industries and from my long history as a business, strategy, and operations consultant.

Contextual Analysis

The Kawartha Music Foundation, bolstered by an Ontario Trillium Foundation Grow grant, initiated the UpBeat afterschool music program, a complimentary addition to its longstanding Orchestras program. Operating for two decades, the Orchestras program featured instrumental lessons, sectional training, and ensemble work across senior, intermediate, and junior levels. Post-OTF Grow grant, the organization underwent significant expansion in budget and enrollment, coinciding with the challenges of navigating COVID, lockdowns, and a global shift in music education approaches.

Drawing on my professional background in management consulting, I conducted an extensive, in-person evaluation of the program’s strengths and weaknesses, interviewing staff to comprehend the organization’s standing. Subsequently, I presented a meticulous restructuring proposal to the board, securing a mandate as the project manager with full authority until completion. The outlined timeline aimed for the realization of most structural components within 12 weeks.

Upon board approval, the transformation journey commenced with a comprehensive overview for staff outlining the envisioned future and the core business philosophy, embracing an Agile methodology. Initial adjustments involved the reorganization of job roles into specialized contract positions, accompanied by the removal of the Executive Director and Artistic Director roles. In their stead, a General Manager position was created, appointed for a season by the board to ensure alignment with the organization’s vision and mission while mitigating burnout risks. This strategic realignment reflects a commitment to professionalism, efficient operations, and adherence to a clear organizational vision.

Adhering to the Agile methodology, the subsequent priority was the swift restructuring of business operations to offer crucial support during the ongoing transition. This effort was streamlined into three primary categories:

  1. Legacy Technology Replacement: Immediate focus on eliminating outdated systems.
  2. Standardization of Processes and Systems: Key to implementing a successful Lean Six Sigma operating model, standardization was achieved through discussions with staff, identifying critical failure points, and simplifying overly complex processes. Nearly one-third of the organization’s work was standardized, transitioning from specialized to more versatile staff.
  3. Automation of Low-Value Tasks: Leveraging tools such as Zapier and Gmail routing rules, repetitive tasks were automated to ensure consistent, high-quality administrative support.

While some activities required phased implementation, critical systems like accounting, customer relationship management, payment processing, and personnel management were successfully revamped within the first month. Less impactful systems underwent upgrades as necessary, contributing to a more efficient and streamlined organizational structure.

The subsequent focus shifted to financial management, compliance, and corporate governance. Beginning with confirming the requirements for nonprofits of our size as per CRA and the Not-for-Profit Corporations Act, the restructuring included:

Board Restructuring: Aligning with legal requirements and industry best practices.

Policy Development: Drafting new by-laws and an HR policy manual.

Compliance Measures: Implementation of a new harassment policy and standardized contracts to empower non-specialized HR personnel for comprehensive HR management.

Automation played a pivotal role in facilitating weekly KPI collection and reporting. These KPIs, covering aspects like program attendance, financial turnover, labor and operating margin, and sponsorships, provided invaluable insights for data-driven decision-making throughout the transition. This systematic approach ensured compliance, enhanced operational efficiency, and generated meaningful data for informed strategic planning.

A significant hurdle during this transition stemmed from the community’s strong adherence to the existing status quo, despite its unsustainable nature. Right from the start, community members, other non-profit entities, and musicians cautioned against adopting a ‘business’ approach, leading to two resignations in response to the changes. The difficulty was exacerbated by internal turmoil resulting from an Executive Director who showed reluctance to structurally align the organization with the increased logistical and compliance demands necessitated by the organization’s growth.

This challenge continues to persist. Despite the acknowledgment of key stakeholders regarding the necessity of changes, some local entities advocate a return to the old status quo. Additionally, past partnerships no longer align with the new organization’s direction. To address this unexpected challenge, the organization prioritized transparency. This involved establishing clear terms and conditions for program use, implementing transparent pay tiers for all staff, and facilitating open sessions during board meetings for community and staff engagement. While the resolution of this challenge remains an ongoing process, considerable mitigation has been achieved. Prospects for improvement are anticipated as the organization consolidates its operational stability, transitioning from a state of organizational flux to one characterized by sustained equilibrium.

Decision-Making Process

The decision-making framework underwent a systematic delineation comprising five pivotal stages, each characterized by a nuanced and strategic approach:

  1. Organizational Goal Setting and Operating Model Selection

Initiating a meticulous analysis of operations compared to organizational objectives, this phase involved the selection of an optimal operational model.

  1. Identification of Key Issues (MIPs):

This critical stage involved the identification and isolation of Major Implementation Points (MIPs), encapsulating pivotal junctures demanding acute attention and strategic resolution.

  1. Implementation of the Sector Convergence Model:

This implementation phase involved the integration of the Sector Convergence Model, a strategic framework fostering interdisciplinary collaboration. Executed in conjunction with Sector Convergence model, the organization began working within the principles of Agile and Lean Six Sigma methodologies.

  1. Stakeholder Communication:

Serving as a linchpin in the decision-making process, this phase prioritized comprehensive communication with stakeholders, fostering transparency, and engendering support through informed dialogue.

  1. Rebranding:

Culminating in the strategic revitalization of the organizational identity, the rebranding stage sought to align the refreshed image with the evolved operational paradigm, reinforcing the organizational narrative for resonance within the not-for-profit milieu.

The decision-making process was centred around identifying and codifying the organization’s goals, operating models, and objectives before delving into and investigating the root cause between current operations and targets. A structured engineering approach, specifically the why-why analysis, played a pivotal role in pinpointing the root causes between current operations and desired targets. This method facilitated a nuanced understanding of the issues, enabling the creation of precise and targeted solutions for key problems.

Subsequent to the identification of critical issues and areas for improvement, the implementation phase embraced the Sector Convergence Model. This strategic framework incorporated methodologies from diverse industries, with a primary focus on leveraging insights from the finance and technology sectors. The deliberate adoption of this approach prompted an immediate transition to an Agile operational paradigm. This transition allowed for the iterative implementation of new ideas, fostering a dynamic environment where feedback was rapidly obtained, real-world experience was gained expeditiously, and adjustments were made promptly in response to evolving needs. The overarching professionalism in decision-making not only upheld rigorous analysis but also prioritized adaptability and responsiveness in navigating organizational challenges.

Several pivotal design choices were made during the transformative process of the Kawartha Music Foundation (KMF). These decisions included:

  1. The post-restructuring operational model adopted by the Board of Directors;
  2. Identification of essential personnel specializations for roles on the Board of Directors;
  3. Establishment of a staff-valuation matrix and corresponding remuneration considerations for distinct roles within KMF;
  4. Implementation of a sustainable business methodology; and
  5. Selection of a preferred operating model aligned with the new organizational philosophy.

Board of Directors Operational Model

The following options were considered:

– Carver Board Governance Model

– Traditional Model of Governance

– Consensus Board Governance Model

– Cortex Board of Governance Model

Selected Option: Carver Governance Model

Rationale: The Carver model is a policy board approach involving collaboration between the Board of Directors and the General Manager in major business functions and stakeholder communication. With minimal standing committees, it aligns well with the agile model required for swift organizational restructuring. This model empowers the board to set operational goals, values, and bylaws while delegating daily management to the General Manager and staff. Furthermore, it allows for the development of a staff-specialization model, enhancing organizational focus and efficiency. The board concentrates on the vision (akin to a CEO), while the General Manager oversees operations and goal implementation (akin to a COO).

Personnel Specializations for the Board of Directors

The following options were considered:

– None: Emphasizing general knowledge and experience, relying on or requiring specific knowledge from staff.

– Finance: Incorporating a finance professional (CA, CPA, CFP, Controller, etc.) on the board for taxation and budgetary reasons to ensure proper fiscal management.

– Legal and Finance: Opting for the broadest possible coverage of potential scenarios while minimizing the number of required board members.

– Any combination of NOC-described TEER 0 and TEER 1 professionals: Focused on highly regulated fields such as legal, HR, and finance.

Selected Option: Any combination of NOC-described TEER 0 and TEER 1 professionals: Focused on highly regulated fields such as legal, HR, and finance.

Option Selected: Any combination of NOC-described TEER 0 and TEER 1 professionals: Focused on highly regulated fields such as legal, HR, and finance.

Rationale: The chosen option involves the inclusion of TEER 0 and TEER 1 professionals, combining management expertise with specialized knowledge in legal, HR, and finance. TEER 0 professionals, holding executive and director-level roles, serve as excellent generalists for positions like General Manager, Chair of the Board, and Vice Chair of the Board. They bring familiarity with balancing organizational objectives, financial constraints, and personnel management. On the other hand, TEER 1 professionals in legal, HR, and finance possess specific training and certification, crucial for roles where legal requirements mandate certified individuals. Considering the need to compensate TEER 1 professionals for their services, this approach ensures a balanced board with a mix of skills, specializations, and diverse knowledge, enhancing overall expertise and governance capabilities for the organization.

Staff Pay Rates and Determination

The following options were considered: 

– Create a payscale for the Kawartha Music Foundation, independent of other organizations.

– Adopt another non-profit organization’s pay scale and remuneration policies.

– Negotiate rates with each staff member or contractor individually.

– Use average rates across labour markets in similar geographic areas to determine remuneration rates per position.

– Use average rates from similar geographic areas labour markets to determine positional tier pay rates.

Option Selected: Use average rates from similar geographic areas labour markets to determine positional tier pay rates.

Rationale: In the pursuit of establishing an effective staff remuneration strategy for the Kawartha Music Foundation, the chosen option involves utilizing average rates from comparable geographic labour markets to determine positional tier pay rates. This decision is based on several important strategic factors.

  1. Transparency and Simplicity

The selected option is characterized by its simplicity and transparency. By leveraging average rates from similar labour markets, the remuneration structure becomes straightforward and easy to comprehend for both staff and stakeholders. This aligns with the organization’s commitment to clear communication and operational clarity.

  1. Reasonableness and Fairness

Ensuring that staff remuneration is both reasonable for the organization and equitable for the staff is a paramount objective. By anchoring pay rates to averages in comparable labour markets, the organization establishes a fair and just compensation structure. This approach contributes to fostering a positive work environment and supports staff satisfaction.

  1. Community Transparency and Positive Public Relations

Maintaining transparency within the community is a strategic imperative. The chosen option positions the Kawartha Music Foundation favourably in the public eye. Transparent remuneration practices enhance the organization’s public relations profile, reinforcing its commitment to fairness and openness.

  1. Facilitating Growth and Development

The selected option provides a scalable framework for growth. By pegging pay rates to geographic averages, the organization can effectively manage its budget while creating opportunities for growth, whether through additional fundraising initiatives or expanded programming. This flexibility positions the Kawartha Music Foundation for sustained success.

Organizational Methodology

The following options were considered:

– Agile

– Six Sigma

– Lean

– Theory of Constraints

– Waterfall

– Theory of Inventive Problem Solving (TRIZ)

Option Selected: A hybrid model combining Agile and Lean Six Sigma.

Rationale: The selection of Agile stems from its capacity to expedite project delivery through iterative development cycles, offering a more rapid alternative to methodologies like Waterfall or Theory of Constraints. This approach enables the General Manager to oversee restructuring at a high level while incorporating input and feedback from stakeholders and on-the-ground personnel. Incorporating Lean Six Sigma tackles a major issue for non-profits: dependence on unpredictable donations and grants. The plan involves an initial emphasis on Agile methods, transitioning toward Lean Six Sigma as the majority of changes are implemented. This strategic combination aims to optimize efficiency and adaptability throughout the restructuring process.

Operating Model

The following options were considered:

– Synchronous Diversification

– Synchronous Coordination

– Synchronous Replication

– Synchronous Unification

– Asynchronous Diversification

– Asynchronous Coordination

– Asynchronous Replication

– Asynchronous Unification

Option Selected: A hybrid model was selected based on asynchronous coordination.

Rationale: Opting for a hybrid, partially asynchronous coordination model ensures adaptability in programmatic situations, requiring in-person work at specific times and essential meetings. This operational approach provides the Kawartha Music Foundation with the necessary flexibility for its programs, classes, and diverse in-program teaching methods. It enables seamless communication among support and administrative staff, fostering cohesion asynchronously. Given the shift in the staffing model towards more specialized staff and contractors with reduced working hours, a streamlined system is imperative. This model facilitates effective collaboration among instructors and synchronous aspects of the business, ensuring straightforward communication. Additionally, it allows the Kawartha Music Foundation to maintain control over records and documents.

Results

The transition concluded just before the onset of a new operational season, and the initial Agile phase resulted in notable benefits. This included a substantial decrease in organizational risk, operational and administrative costs, and internal conflicts. Simultaneously, there was an enhancement in governmental compliance, personnel job satisfaction, and overall functional quality. Some key metrics demonstrating the transition’s impact include the following:

– 47% average reduction in Program Delivery Costs (with a range between 15% and 79%);

– 40% increase in Programming Hours;

– 38% rise in youth participation within KMF Programs while maintaining an 82% year-over-year retention rate;

– 92% Staff Retention rate compared to a national average of 47% for Arts and Culture non-profit organizations;

– 16% reduction in overhead costs;

– 6.25% decrease in overall budget spend; and

– 8% increase in program attendee attendance and NPS scores, reflecting improved program quality despite significant fiscal and programmatic savings.

Reflection and Evaluation

Goals and Objectives

Achieving remarkable success across various metrics, the Kawartha Music Foundation’s transition has established operational and financial stability, fostering ongoing program growth. Completed within 12 months of the 18-month timeframe, the organizational shift has created a robust business structure. This ensures that future board members and staff can consistently deliver high-quality programs, maximizing the positive impact on the youth participating in KMF initiatives. Reflecting on the initial goals outlined in the consultation—financial sustainability, alignment with a new size and values, and expanded programming while reducing overall expenses—the empirical success of the consultation is evident.

Strategies and Approaches

During the KMF transition, I predominantly applied Agile and Lean Six Sigma methodologies, along with my sector convergence model, facilitating the organization’s growth. The observed outcomes confirm the effectiveness of these methods in achieving the intended results. For future engagements with smaller organizations, I may opt for Agile Crystal, emphasizing the human aspects of projects—focusing on personnel skills, abilities, and collaboration. The current implementation of my sector convergence model has significantly enhanced organizational operations, providing staff with diverse resources and tools, resulting in heightened efficiency and elevated work quality compared to many other nonprofit organizations. This sector convergence approach holds promise for broader application, leveraging private sector innovation and efficiency to generate positive societal impact.

Team Dynamics and Collaboration

Collaboration and synergy among operational and administrative staff have flourished during this transition, fostering robust relationships within the administrative team. These individuals have undergone upskilling, training, and professional development, emerging as invaluable supporters for the organization’s future endeavours. The Kawartha Music Foundation has established a robust knowledge transfer process, utilizing resources such as shared Google Drive archives, email archives, and regular reports for seamless succession planning.

In contrast, building strong connections with instructional staff has presented challenges, as their individual needs sometimes conflict with the organization’s optimal direction. Managing issues like cost reductions, program eliminations, and changes in class sizes has been the most demanding aspect of the transition. While improvements have been made, ongoing communication remains essential, recognizing the inherent conflict between staff priorities focused on immediate compensation and the board’s long-term organizational vision.

Despite the transition’s remarkable success, it brought novel challenges. My background in finance, technology, and hospitality industry consulting facilitated swift resolution of business, technical, and strategic issues. However, unexpected pushback from the community and staff, asserting, “This is not how arts organizations run,” proved a recurring challenge. Stakeholder management emerged as the most complex aspect. For future endeavors, exploring weekly updates and status documents to enhance communication and transparency to streamline post-decision discussions may yield improved results.

Recommendations

Throughout this transformative journey, I’ve gleaned invaluable insights into the intricacies, solutions, and operational norms of not-for-profit organizations. Armed with this knowledge, I’ve discerned pathways for enhancing sustainability, aiming to guide nonprofits away from the need for extensive organizational overhauls akin to the challenges faced by the Kawartha Music Foundation. Here are key takeaways:

  1. Establish clear expectations regarding the transition, the new business model, and the rationale behind it, communicating openly with all staff members from the outset.
  2. Emphasize that the organization functions as a business—its charitable status is a tax classification, not an operational model. The success or failure of the organization comes from the business model that supports it’s operations, not from how warm and friendly the organization is.
  3. Clearly define each staff member’s role in the transition, being clear which roles will be consulted with in an as-needed capacity and which will be regular. Consider designating a spokesperson for groups of staff during consultations.
  4. Swiftly address challenges posed by problematic individuals. While acknowledging uncertainties, prioritize a respectful and no-nonsense approach to maintain a conducive environment.
  5. Uphold your organizational philosophies without compromise. Although this will result in additional short-term complexity, the enduring value of adhering to clear expectations will greatly surpass the immediate stresses.
  6. Recognize that no individual is indispensable. Resist the claims of indispensability—either from the  person or about them—ensuring organizational resilience and adaptability.
  7. Craft compelling pitches for donors and sponsors by ensuring reciprocal value. Structure pitches as opportunities for sponsors to receive tangible benefits in return for their support.

Conclusion

As a result of my leadership during this transition, the story of the Kawartha Music Foundation’s restructuring is one of exceptional success, growth, and community. Facing the challenges of rapid growth, financial unsustainability, and bloated operational efficiency, the foundation underwent a comprehensive 18-month transformation in order to allow it to continue supporting the youth it serves following the completion of a large grant.

In order to support this, I strategically employed Agile and Lean Six Sigma methodologies and implemented his Sector Convergence Model, drawing on expertise from a variety of sectors to support the organization. This innovative approach addressed challenges in program delivery, financial management, and compliance. The decision-making process was systematically outlined, focusing on goal setting, identification of key issues, sector convergence, stakeholder communication, and rebranding.

Critical design choices included the adoption of the Carver Governance Model, inclusion of TEER 0 and TEER 1 professionals on the Board, a transparent staff pay structure based on geographic averages, and a hybrid Agile and Lean Six Sigma operating model. The asynchronous coordination model ensures flexibility in programmatic situations while maintaining effective communication.

The outcomes of this transition were substantial, including a significant reduction in program delivery costs, increased programming hours, higher youth participation, and improved staff retention. The reflection and evaluation underscore the success in achieving financial sustainability, alignment with new values, and expanded programming while reducing expenses.

My strategies, embracing collaboration and fostering synergy among the administrative team, have laid the foundation for future success. While challenges arose, particularly in stakeholder management and unexpected community pushback, the overall success of the transition positions the Kawartha Music Foundation as a model for sustainable growth in the not-for-profit sector.

Recommendations emphasize the importance of setting clear expectations, recognizing the organization as a business, defining roles explicitly, and maintaining unwavering commitment to organizational philosophies. The case study provides valuable insights and recommendations for not-for-profit organizations seeking sustainability and successful transitions.