#5: Help Your Competitors

After traveling through the United States in 1831-32, Alexis de Tocqueville famously marveled at the American phenomenon that gave rise to what we now know as the social or independent nonprofit sector.

Americans group together to hold fêtes, found seminaries, build inns, construct churches, distribute books, dispatch missionaries to the antipodes, wrote Tocqueville in Democracy in America. They establish hospitals, prisons, schools by the same method. Finally, if they wish to highlight a truth or develop an opinion by the encouragement of a great example, they form an association.

The French essayist would probably not be surprised to learn that today 1.5 million nonprofit organizations account for a combined $1 trillion in annual revenue, growing faster than the U.S. economy for the last 15 years and becoming the third largest U.S. industry, behind retail and wholesale trade, but ahead of construction, banking and telecommunications. These groups have emerged from the unprecedented wealth of corporate foundations, the retrenchment of government and a heightened awareness of social problems that are often of global scale.

It is surprising, therefore, that Leslie Crutchfield and Heather McLeod Grant came to their subject by chance. When Crutchfield, managing director of the nonprofit organization Ashoka, was preparing for a meeting of the change-makers her group seeks to inspire, she found there was no single source in which time-tested practices to make a difference could be found. Joining forces with Grant, a business administration specialist, she learned that success defies traditional management and accounting measures.

Being an extraordinary nonprofit isnt about building an organization and scaling it up. Its not about perfect management or outstanding marketing or having a large budget, they concluded. Rather, its about finding ways to leverage other sectors to create extraordinary impact. Great nonprofits are catalysts; they transform the system around them to achieve greater good.

In Forces for Good the authors distill the method in the groups madness into a specific half-dozen practices that dynamically and cumulatively have become part of an institutional virtuous cycle.

The organizations bridge the divide between service and advocacy, inspire word-of-mouth promoters, adapt to their external environment, work with the private sector, help their competitors and are led by power sharers. These groups leaders, rather than potentates or politicians, are social entrepreneurs, a group of individuals defined as highly adaptive, innovative leaders who see new ways to solve old problems and who find points of leverage to create large-scale systemic change. The roster ranges from the $1 billion Habitat for Humanity, renowned for wrestling with poor housing and homelessness by building homes for a million people, to the $18 million Youthbuild USA, which encourages inner-city youths to develop careers through experiences in construction.

The authors also categorize the groups by the way they have adapted to change.

They dub Self-Help, a Durham, N.C.-based group focused on asset development among low-income populations and a leading force in promoting anti-predatory loan legislation, as one of the free spirits. These are groups whose staffers are impatient with anything that smacks of bureaucracy and pride themselves on being doers not planners.

At the opposite end of the range lie the MBAs, such as Teach for America, the New York City-based education reform group they describe as having made teaching in public schools cool. T.F.A.s management tracks data as if their lives depended on it, note Crutchfield and Grant.

The authors make some missteps, however, in their quest to avoid easy categorization.Their choice of the Heritage Foundation, which they credit with leading a conservative revolution in Congress in the 1990s, ignores the conservatives seizure of the Republican Party and the White House in 1980. Heritage has remained merely one phalanx of the movement, and it sorely lacks the service component the authors tout. One might also question the authors with regard to the true transformative effects of the wonky and liberal Center for Budget and Policy Priorities.

Why, also, did they choose the National Council of La Raza, admittedly the leading Hispanic think tank in Washington, but entirely omit such African-American organizations as Opportunities Industrialization Centers or the Urban League?

Nevertheless, for the high-minded reader interested in discovering methods that have helped others combine ideals with the practical toughness and organizational savvy that yield lasting change, Forces for Good seems to be the book to read.