Lynn Taliento thrives on complexity and change. Like a kaleidoscope that shifts and stretches light and color to present constantly evolving and interesting patterns, Lynn works with organizations to enable them to see themselves and their efforts in a new and different light with the ultimate goal to bring about a transformation.

As co-founder and leader of McKinsey & Company’s Global Nonprofit Practice and an advisor to Venture Philanthropy Partners (VPP), Lynn spends her days helping organizations develop more successful strategies and improve their operations to tackle some of the world’s most challenging social issues, from fighting AIDS to improving public education to finding ways to make philanthropy more effective. She is a strategist and sounding board, analyst and advisor. It is exciting and rewarding work that she found by taking a winding and sometimes challenging path.

Growing up in New Hampshire and Maine, Lynn was interested early on in social and public policy. She went to Yale for her undergraduate studies, the first in her family to go to college. She chose to major in American studies because it offered an interdisciplinary approach—combining history, economics, and political science—that allowed her to examine American society through a variety of lenses. After graduating from college in 1990, she first spent a year in Prague and then returned to DC to work as a press secretary for Congressman Ron Wyden from Oregon. She then entered the Kennedy School of Government and during the summer had the opportunity to be an advisor to the Czech Economic Minister. It was the early 1990s. Prague was awash in new possibilities after years under the Soviet yoke, and she was excited by the tremendous opportunity to make a difference and have an impact. After completing her master’s degree, she wanted to go back to Prague and work for a number of years. A friend suggested that she consider a firm like McKinsey, which would probably enable her to go to Prague and give her a great perch to be in the thick of new business and political opportunities emerging there.

Lynn received an offer from McKinsey, but the opening of the Prague office was delayed, so the firm encouraged her to spend a year training somewhere else. Lynn opted to go to Mexico, an office with a lot of public policy work, despite her lack of Spanish language skills.

“I didn’t expect to love McKinsey as much as I did, and I began to see how I could use my public policy training to solve business problems,” she says. For example, one of her clients was a large American insurer based in the Midwest that wanted to enter the Mexican market. Lynn notes that in order to help the company successfully achieve its goals, she and her team had to help them understand how Mexicans thought about things like financial security, illness, the health care system, and “the future” in general, and also had to help executives from both countries understand each other as individuals. This engagement and others in Mexico were terrific experiences that brought her in direct contact with high-level government officials including the Mexican President’s Office.

After four years, she decided it was time to return stateside and settled in the Washington office of McKinsey. She found herself working for a credit card company where there wasn’t a public policy or social component at all. She was doing some nonprofit work on the side, helping Hillary Clinton think about how to transition Vital Voices—a program to help train women leaders in emerging democracies—from a program within the State Department into an independent 501(c)(3). However, she felt she had hit a brick wall.

“After almost five years at McKinsey, I was expected to know which industry I was going to focus on. But none of the existing industry groups really excited me. When pushed to choose, I kept coming back to the same thing, nonprofits. But at that time, you could only do nonprofit work on the side, in addition to regular consulting. You couldn’t focus on nonprofits.”

Unwilling and unable to shake her desire to concentrate full time on the nonprofit sector, she drafted a proposal for a nonprofit practice at McKinsey and shopped her idea to many senior level partners. While people liked her idea, all of them told her it was unlikely that McKinsey would build and develop a practice area for nonprofits—all of them except one, Les Silverman. Silverman, who at the time was running the firm’s energy practice, saw the same possibilities that Lynn did and together they co-founded the Global Nonprofit Practice in 1999. Les recently retired from McKinsey, leaving Lynn and her colleague, Paul Jansen, to run the practice.

Today McKinsey serves roughly 150 nonprofit clients a year, a compelling roster that includes the Global Fund to Fight Aids, the United Nations, the United Way system nationwide, and the Gates Foundation, as well as Sri Lanka’s post-tsunami reconstruction effort and U2 singer and social activist Bono. Lynn and Les both have been longtime advisors to VPP. In addition, the Global Nonprofit Practice has also provided strategic planning to several VPP investment partners including See Forever/Maya Angelou Public Charter School, Heads Up, the Center for Multicultural Human Services, and the Boys & Girls Clubs of Greater Washington. While the practice serves organizations of varying size, the group is increasingly focusing on organizations with a global mission.

The Global Nonprofit Practice builds upon the work McKinsey has done for many years with nonprofit organizations. The Practice helps focus the firm’s attention on the most high-impact client and knowledge efforts and enables it to capture knowledge and best practices across the firm’s 83 offices worldwide. While the firm serves nonprofit clients in all sectors, the Practice has three priority areas in which it is investing additional resources: global public health, international aid and development, and philanthropy (primarily foundations). In each of these areas, McKinsey seeks to work with leading global institutions on issues of critical importance to the sector.

Bringing the McKinsey approach to nonprofit organizations has raised some interesting challenges. Lynn notes that McKinsey’s rigorous data gathering and analysis of an organization’s operations can be foreign and threatening to many nonprofits at first.

“I wasn’t prepared for how uncomfortable some people would be when confronted by data. Sometimes the analysis we do shows that the programs aren’t as effective as the executive director and staff believed. The transparency of the data causes great anxiety. People sometimes feel under attack and criticized,” she says.

She cites one instance where a McKinsey analysis showed just how expensive it was to run a particular program. The executive director was fearful of sharing this information with the staff, concerned that it would be demoralizing to attach a dollar value to the work they were doing to change lives.

In the end, the executive director did share the information with the staff and was pleasantly surprised by the creative ways that staff devised to cut costs. Rather than resisting a discussion about costs, staff members embraced it, realizing that if they could find ways to lower costs, they could serve more people.

Lynn notes that absorbing this kind of information takes time. “We’ve learned to slow down our pace a little and not lead with so much data up front. This enables people to better digest the information.”

Working with VPP has been a powerful experience for Lynn and her group. “VPP provides a unique space to understand how to think about change in nonprofits. I have the opportunity to see the evolution of clients through the lens of VPP and to see changes across the portfolio. VPP’s intense relationship with its investment partners and their long-term support makes our initial strategic planning work more impactful,” says Lynn.

But the biggest benefit of her work is the opportunity to work with the dedicated people in all kinds of organizations who are on the front lines of profound social change.

“It is an incredible privilege to work with the organizations we work with. The leaders and staff of these organizations are passionate about what they do and they are extremely effective at making things happen; their passion and their talent inspire me,” she says.

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VPP Enters Investment Partnership with Mary's Center

VPP has entered into a multi-year investment partnership with Mary's Center, a dynamic organization whose mission is to build better futures through health care, education, and social services that embrace a culturally diverse community. VPP's investment is designed to help Mary's Center achieve their aspiration to strengthen overall community health by delivering integrated human services to support individual and family well-being and by expanding their presence to serve more children and families on a broader scale in the National Capital Region.

The Investment Agreement will provide Mary's Center with strategic assistance and funding of up to $3,000,000 over a four-year period (this is in addition to the $400,000 already provided for the business planning phase). During the first phase of this investment partnership, VPP will provide funding and strategic assistance to help Mary's Center enhance and augment their infrastructure and begin their expansion in accordance with their new status as a Federally Qualified Healthcare Center (FQHC). Under the terms of this agreement, $800,000 in funding will be disbursed to Mary's Center in the first year, with the remaining $2,200,000 in funding contingent upon Mary's Center's achievement of annual milestones over the remaining term of the investment partnership.

During the past seven months, Mary's Center Founder, President, and CEO Maria Gomez, her leadership team, and Board of Directors have engaged in a rigorous planning process that resulted in the creation of a theory of change, a plan for expansion (Mary's Center Plan for Growth), and an outcomes framework. The expansion plan identifies three implementation phases for growth commencing in 2005 and culminating in 2009, at which time Mary's Center will have the capacity to triple the number of clients it serves and reach more than 24,000 children, teens, and families annually.

Gomez discussed the first stage of the investment partnership, saying "what was so valuable was the opportunity for the visionaries, the doers, and the managers in this organization to step back and look at what we do, who we do it for, who we do it with, and what we want to be doing 5-10 years from now. We're always too busy doing, too busy trying to meet the needs, and too busy trying to bring in the funding. So it was an amazing experience to work with experts who listened to our stories about what we have done here at Mary's Center and listened to our dreams about where we can go."

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BGCGW Honors Local Leaders at 20th Annual Congressional Dinner

More than 1,100 of Washington’s business, government, and community leaders gathered to for the Boys & Girls Clubs of Greater Washington’s (BGCGW) 20th Annual Congressional Dinner Wednesday, April 20 at the JW Marriott Hotel in Washington, DC. The event celebrated the work of BGCGW and honored five outstanding citizens for their significant contributions to our nation’s youth and to Boys & Girls Clubs across the country.

Tim Russert, NBC News Washington Bureau Chief, host of Meet the Press and a past honoree, served as Master of Ceremonies for the tenth consecutive year. This year’s honorees included: Mark Touhey, Chairman, DC Sports and Entertainment Commission; Albert Lord, Vice-Chairman and CEO, SLM/Sallie Mae; Congressman Norm Dicks (D-Washington); Congressman Kevin Brady (R-Texas); and Stephanie Ellerbee, BGCGW 2005 Youth of the Year.

“The Congressional Dinner has truly become a premier event in Washington. We set a record this year by raising $1.5 million for BGCGW to continue the work of servicing over 36,000 young people in the Washington metro area,” comments Congressional Dinner Steering Committee Chairman, Fernando Murias, Managing Partner, PricewaterhouseCoopers, LLP. “Our support has come from the many corporations and foundations who believe in the mission of BGCGW and the success of our children.”

The first Congressional Dinner, held in 1986 after BGCGW’s first 100 years of continuous service to children and youth, was created as an opportunity to pay tribute to local and national leaders who have demonstrated a strong commitment to making the world a better place for our youth.

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CFNC Founder and Executive Director Barbara Fox Mason greeted guests and extended special welcomes to the evening’s honorees, which included Senator John Warner and Mrs. Jeanne Van der Myde Warner; Congressman Jim Moran; Alexandria Councilman Ludwig Gaines; Maxine Baker, President of the Freddie Mac Foundation; Mike Bowen of CapitalOne; and Joy Moore of the Annie E. Casey Foundation.

Fox Mason was honored for her 20 years of service to young children with a plaque presented by CFNC Board member Ludwig Gaines and VPP Partner Eleanor Rutland and a $7,500 cash gift that represented the number of children served by CFNC since its founding.

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The session was well-attended, with board members, executive directors, or staff from each of VPP’s ten investment partner organizations, as well as others in our network, participating. Both Boisture and Murias urged the attendees to view the climate of scrutiny as an opportunity rather than a challenge. Donors expect management integrity, use of funds in accordance with restrictions, active and effective Board oversight, and appropriate and understandable financial reporting, and organizations that are committed to best practices in this area will have a competitive fundraising advantage.

Murias opened the session with a general overview of The Sarbanes-Oxley Act’s impact on the corporate and nonprofit sectors. He explained that although the act is not technically applicable to nonprofit organizations, many nonprofits have been slowly adopting certain provisions, including developing and implementing a code of conduct and a conflict of interest policy, revising audit committee charters, and designating a financial expert for the organization’s audit committee. Murias has found that the main impact on governance has been that board members and executive directors are reviewing and clarifying how their board works and what its responsibilities are, and assessing whether they have the right balance of members on their boards, including members who understand oversight, governance, and regulatory issues. Murias advised the attendees to do a gap assessment looking at the principles of Sarbanes-Oxley—but keeping in mind what is practical for their organizations—to determine where they need to allocate resources, whether they need to consider restructuring the board to ensure a balance of skills, and whether they need a separate audit committee, which is more a function of the organization’s complexity, level of centralization, and makeup of the board than the actual size of the organization. The Independent Sector has a great checklist to guide organizations through these issues.

The good news is that despite the climate of increased scrutiny around governance, neither Murias nor Boisture has seen an exodus of board members from nonprofit organizations. They advised attendees to determine the right balance point, ensuring that they are implementing strong governance measures without scaring away prospective board members. Boisture commented that an organization with a compelling mission will always be able to find quality people, and challenged the group to see the transition to a transparent governance environment as an opportunity for collective education of the level of people they’d want on a board: “You can be a good organization without a strong board, but not a great organization without a strong board. The key to achieving greatness is developing a strong board.” He warned attendees not to be tempted to see boards as an obstruction when trying to get things done, as the real problem is the long-term breakdown in fundamental accountability mechanisms, and addressing these issues is making the sector stronger.

Michael Gemm, Manager of Finance and Accounting for VPP Investment Partner College Summit, captured the spirit of the session, “All of the investment partners do owe prudent governance leadership to our respective sectors. We are the leaders and we have the opportunity to set THE example of governance.”

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To find out, Bridgespan examined the experiences of 20 youth-serving organizations that have successfully expanded their operations. Boys & Girls Clubs of Greater Washington and College Summit, both VPP investment partners, were two of the organizations profiled.

While far from a full picture of the dynamics of growth, the research discovered several surprises. Among them: Any youth-serving nonprofit 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 shows that any organization willing to navigate the “chutes and ladders” of growth can emerge larger, better staffed and structured, although still struggling to maintain sufficient funding to ensure their long-term viability.

Among the highlights:

• Rather than starting with a detailed plan, most organizations grew in response to opportunities that presented themselves. For instance, some organization chose to grow simply because they found someone in another city willing to open a chapter or affiliate.
  
• Unlike in the for-profit sector, nonprofits that expand their operations don’t necessarily benefit from economies of scale or experience. Rather, nonprofits 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 organizations find their financial situation extremely fragile. For example, of the 20 groups that Bridgespan studied, 16 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 organizations grow, the need to professionalize 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 organizations 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.

The findings are detailed in a white paper, and also summarized in an executive summary.

All 20 case studies of the youth-serving organizations that participated in the study are available at The Bridgespan Group's website.

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