Good news for fans of strategy management! The watchdog group Charity Navigator has expanded its rating system beyond financials to now include governance and openness about operations. This first step in a long term effort to expand their rating system is a great first step. Transparency of operations is always a good thing and may go a long way to preventing ethical violations that harm the entire non-profit sector. But there is more nonprofits can do - use disciplined strategy management and program assessments.

The change by Charity Navigator can be viewed at Charity Navigator . Not only will this expanded approach reduce the flawed focus on "% of funds going toward administrative overhead" but it will increase focus on governance and management. After all, when an investment bank is looking to invest in a profit driven company what do they value most – insight into the management team, its management practices and its strategic plan. Nonprofits should be evaluated the same way.

So, how can mission driven organizations foster strong governance and openness? I would suggest two key elements:

1. Strategy Management System – define strategic objectives, measures of success and targets of performance.

2. Program Assessments- for large programs review their strategic fit, strategic contribution and effectiveness of management practices.

Strategy Management System – You have read a lot about the Balanced Scorecard and Strategy Management on this site. There are many great examples of strategy maps and case studies as well that can be found at Example Strategy Maps . You may choose to use a Balanced Scorecard, a logic model or some other framework. What matters most is that you define your strategy, draft a strategy map or logic model to make explicit the cause and effect linkages within your strategy, and select strategic measures and targets for each. This is the system that will allow you to measure your organization's progress toward achieving the strategy and the mission.

These strategic results should be shared internally so that all staff and board members can see the impact they are having on the mission. Selected data may also be shared externally so "investors" or benefactors can see how effective your organization is at deploying resources to achieve the mission. The savvy donors of today and data focused millennial donors will settle for nothing less.

Program Assessments- Too often, nonprofits launch a large program and let it run for years without periodically reviewing the effectiveness of that program. Perhaps it yielded great results initially and is achieving less impact now. Perhaps the scope has changed significantly but it has not had resources adjusted accordingly. Or, maybe it is a bundle of potential that has not yet been discovered. For this reason we recommend that large programs be evaluated at least every three years.

Program evaluations can be structured any number of ways. I recommend that you review at least the following components:

• Strategic fit – does the program still support the mission and the strategy
• Strategy contribution – is the program achieving results (outcome, output and inputs)
• Management effectiveness – is the program well managed with clear goals, measures, frequent staff communication, etc.

Program assessment results are typically only shared internally and often with the board as well. But, you should not be surprised if you find tidbits of information that you want to share externally: either little successes that warrant celebration or even inefficiencies that have been eliminated.

Successes and opportunities for improvement will let current and potential donors know that you are actively managing the organization and focused on the mission.