In 1912, when Girl Scouts founder Juliette Gordon Low started the organization with 18 girls in Savannah, Georgia, she wanted to create an organization that would offer “something for the girls of Savannah, and all of America, and all of the world.”1 Today, Girl Scouts of the USA and its more than 300 local councils engage 2.7 million girls and more than 925,000 volunteers in the United States, and sister organizations serve girls in 90 countries. Reaching every girl, however, has become more complicated than Juliette Low could have ever imagined, and managing an organization that is one of the best known and largest in the country is an evolving challenge.
As the Girl Scouts celebrates its 95th birthday, the organization is undergoing a dramatic transformation, consolidating from more than 300 councils into 109. This restructuring is designed to address issues of efficiency, scale, competition, membership, and brand. The Girl Scouts are not alone; many federated nonprofits are experiencing major shifts in structure and programming, and all are challenged by the need to maintain relevance, cohesion, and the prominent place they have traditionally held in the nonprofit sector.
Federated organizations such as the Girl Scouts, the American Red Cross, the United Way of America, and the YMCA of the USA have also experienced major shifts in organizational structure and operating environment. In “Nonprofits: Ensuring That Bigger Is Better,” McKinsey authors Maisie O’Flanagan and Lynn Taliento indicate that 16 of the largest 20 nonprofits in the United States operate as federations, which they define as a “network of local affiliates that share a mission, a brand, and a program model but are legally independent of one another and of the national office.”2 Federated entities have faced challenges not unlike those experienced by community-based organizations, but the impact is magnified by the complexity of a multisite system spread across the nation. Taliento and O’Flanagan describe how federations have encountered “donors—public and private—[that] are giving less and becoming more mobile, and this has promoted intense competition for money among affiliates. Donors are also making more demands to see results, leaving federations with the difficult task of persuading vast networks of affiliates to agree on how to evaluate and improve their performance. Meanwhile, controversies at the United Way of America and American Red Cross Disaster Services have underscored the risk of sharing a brand that is only as trusted as the least trusted affiliate.” To address these issues, the Girl Scouts adopted the view that “change was needed in every area. Only a transformation would allow the Girl Scouts to retain its position as the world’s leading organization for girls.”
Beginning in late 2004, under the helm of newly hired CEO Kathy Cloninger, the Girl Scouts engaged a team of business consultants to study the organization’s operating environment and to make key recommendations about the structures, policies, and programs that would best serve the organization in the future. Cathy Tisdale, a vice president for council partnerships at Girl Scouts of the USA, sums up the findings. “The scan revealed that . . . the past was not entirely the bridge for the future.” The McKinsey report has a similar conclusion and argues that “while the structure of most federations is sound, their management must be overhauled. Federations can offer significant advantages to their affiliates, but if poorly managed, they suffer from uneven performance among local organizations, costly administrative duplication, and cumbersome national offices that deliver insufficient value.”3
The Girl Scouts suffered from many of these challenges, including the following:
- a stagnating membership base of girls and adult volunteers;
- substantial inconsistencies in programming from one council to the other, even in contiguous areas, due to varying levels of capacity, resources, vision, and leadership;
- substantial inconsistencies in levels of efficiency and effectiveness from one council to another, with redundancies in the management of facilities and the handling of fundraising, volunteers, and other operational matters;
- an outdated volunteer and philanthropic model that pitted councils against one another and barely tapped the organization’s vast alumni network; and
- a brand known for popular cookies and stimulating camping experiences, but not for its impact on the lives of girls and communities.
As NPQ interviewed staff from the Girl Scouts’ national office and with local councils, there was clear agreement on the need for change. Recognizing this need, the Girl Scouts made the choice to be proactive and bold rather than let the future hand each council its own fate. At the national level, the desire to grab hold of the brand and to deal with competition appear to be paramount driving forces in the creation of the new business strategy and consolidation plan.
Julie Murphy, the senior director of strategy at the Girl Scouts, says the organization tackled the issue by focusing on what was happening in the lives of girls. “What they found was that when Girl Scouts started, it was the only extracurricular and leadership option for many girls, but that is drastically different today,” explains Murphy. “Kids have so many different options, and the businesses/organizations that are serving girls are very specific and have a target niche rather than a broad-based approach like Girl Scouts. For instance, we used to think that we did not really have competitors based on the number of girls we reached, but we learned that there is a national cheerleading organization serving a million girls. That is a competitor. So we really needed to ask ourselves, ‘What do we need to do to reach and serve girls in this current context?’” Vicki Wright, a realignment project manager at the national office, adds: “The change is tough and it is difficult in many ways, but it is necessary. In the environment of nonprofits today and with the increase of nonprofits—which has skyrocketed in the last 10 years—everyone has to be a star in their game if they are to be successful. It’s how we have to keep doing business in the future.”
Clearly influenced by for-profit business thinking and practices focused on efficiency and performance, the national staff talked about how to transform the organization from “good to great”4 and how to create change that would allow the Girl Scouts to expand its place among the most recognized brands and nonprofits in the country. “There is a great quote from Jack Welch [the former CEO of General Electric] that says something like, ‘If the rate of change in an organization is slower inside the organization than outside, then the end is near,’” said one national staff member. “That is part of how we believe we need to do our work now and in the future.”
At the local level, Girl Scout staff talk more about the desire and need for equity among councils and for creating greater alignment and less competition between the councils themselves. Conversations with CEOs and development staff from four local councils revealed broad agreement on the need for change and the consensus that revamping the system was necessary.
Diane Nelson, CEO of the Girl Scouts of Eastern Iowa and Western Illinois, articulates this local perspective: “There were huge inequities in the system,” she says. “We needed greater consistencies in how we managed and talked about our work, so this was the way that seemed to make the most sense.” Deborah Hearn Smith, CEO of the Girl Scouts of Central Indiana, echoes that sentiment. “The biggest reason to pursue this change was the discrepancy in capacity,” she says. “We had councils with multimillion-dollar budgets next to councils with budgets of less than $500,000. The differences in level of resources really affect programming, staffing, and volunteers, creating big differences in consistency and quality.” Aretha Green-Rupert, the director of development at the Girl Scout Council of Greater Minneapolis, adds, “The realignment is about how people view the Girl Scouts and our desire to make sure that the Girl Scouts continue to be relevant in this community and this country,” she says. “In this area, you had the council in Minneapolis and the one in St. Paul competing for the same resources, and funders feeling like the river is not a legitimate divide anymore.”
As the Girl Scouts consolidate, it is also pursuing major changes in brand and programming. These changes are meant to alter the way local councils implement programs, to create greater consistency across the field, and to revamp the brand and elevate the profile of the organization. The changes include (1) restructuring the volunteer process to enable busy women to volunteer more easily and effectively; (2) creating a new leadership program targeted at both girls and adult leaders (in partnership with the Leader to Leader Institute and the Oxford Leadership Academy) to offer a more well-rounded leadership development program; and (3) creating mechanisms to track and disseminate program outcomes.
Other changes include a new fund development plan that will seek to capitalize on the nearly 50 million women who have engaged as Girl Scouts at some point in their lives and the collaboration with a national advertising firm to create a new branding strategy. As a result, the Girl Scouts has partnered with the Manhattan Toy Company to market the Groovy Girls, a new line of Girl Scout dolls. The goal of these projects is to reconfigure the entire system by creating a more streamlined approach. The organization hopes that the new model will yield greater efficiency and attract higher numbers of girls and adult volunteers as well as create broad appeal within the public and among donors by enhancing the brand.
At the helm of these projects, the national office engages local councils in a conversation about how the work should advance, and it makes programmatic and branding decisions that will have a lasting impact on local councils’ work. In this way, headquarters has stepped further into the well-documented tensions between national offices and affiliates that are endemic to federated organizations. Federated organizations typically need to balance local councils’ desire for autonomy with the national office’s desire for consistency and centralization.
According to a 1999 Aspen Institute research paper entitled “Governance of National Federated Organizations, the federated continuum stretches from loose associations with a set of member organizations and a great deal of autonomy to tighter affiliations in which the national offices exercise a great deal of control over local affiliates.5 In the case of the Girl Scouts, the authors state, the organization operates in a way “in which member organizations’ very existence is dependent on and extensively prescribed by their relationship with the national organization.”6
In an article from Nonprofit Management and Leadership journal entitled “Managing Multisite Nonprofits,” authors Allen Grossman and V. Kasturi Rangan describe the dynamic between national offices and local federations as a central issue of division of governance, roles, and power. “The struggle to coordinate the work of the center and the affiliates is common in multisite nonprofits, with most facing an ongoing challenge to reconcile internal issues around power, responsibility, and accountability,” they write. “As a result, critical management decisions often take inordinate amounts of time, energy, and resources.”7 This is probably why the Girl Scouts gave itself two years to devise a strategy and involve various levels of the organization in that process and then allotted nearly three years to consolidate.
While the Girl Scouts has sought input into how realignment would work, the reality is that all local councils will eventually have to comply with the board mandate to merge. As Tisdale explains, “the national organization holds the charter for each council, and councils cannot legally exist without approval from the national organization.” According to interviews with national staff, however, the biggest issue related to the consolidation has been not whether the mergers should happen, but how. “With over 300 councils, you could expect there could be a continuum of reaction [to the consolidation]. By and large, councils could not hold out, and that is a reality,” says Tisdale. “We have put out an enormous amount of information about why we are doing this and solicited a lot of input about how we should do it. And by and large, the data supports our direction. But then it becomes personal, and people wonder what they will lose as part of the process. And that is, undeniably, hard.”
Given the structure, this tension is not something that can be eliminated altogether. But the challenge is to use these pressures creatively and fuel the system to greater achievement. Grossman and Rangan argue that multisite systems should not run from this tension but learn to manage it. “Headquarters should undertake actions to enhance system value and then sustain it, and affiliates should maximize local resources to enhance their credibility and increase their voice in the running of the system. In general, a healthy tension between the headquarters and operating units over the respective roles will emerge. The key for management is to develop a governance system that accommodates this tension in a constructive rather than a destructive fashion.”8
This approach of involving local council staff, volunteers, and board members seems to have paid off for the Girl Scouts’ realignment strategy. The organization reports that half of its councils will have merged or begun the process by fall 2007, with most of the remaining councils to follow in 2008. But a couple of councils have encountered bigger challenges that have brought their merger process to a halt. In July, the Chicago Tribune reported that two Girl Scout councils had pulled out of a merger process involving a total of seven councils. According to the article, “The two councils—Illinois Crossroads Inc., based in Lake County and serving part of suburban Cook County, and Prairie Winds Inc., in DuPage County—represent 56,000 Girl Scouts from 160 communities.”9 No specific reasons were given for the pull out, but the Tribune reported that Bonnie McEwan from the national office framed the situation this way: “They took a step back. They’re not really happy with some of the decisions the other councils have made. To some extent this happens with a negotiation.” While no other councils have pulled out of the process, it is clear that any system that seeks to reduce its size by two-thirds will enounter some pushback.
The four councils interviewed by NPQ were all engaged in the realignment process and offer a glimpse into their journey. Mergers are demanding processes, and the Girl Scouts’ journey through realignment is no different. It probably helps to have the training and support of the national office and a network of sister organizations all going through the same thing, but these remain complicated organizational and legal processes with lots of people who want and need to have a say in what happens. “In one merger of four councils, there were 500 voting members [including board members, volunteers and staff] at the meeting . . . so at some of these things, the meetings are quite large and the whole process can involve literally hundreds of people,” explains Vicki Wright of the national office.
Staff from the councils interviewed talked about the benefits and challenges of undertaking this work. On the plus side, the ability to choose the best of each council and to tap the resources and network of each community has been a benefit of the process. Lee Morriss-Mueller, whose Girl Scout Council of the Mid-South in Memphis is now engaged in a merger that will culminate in May 2008, says that taking the best from each organization has benefited all the merging councils. “We identify that we need people with a strong background for something specific, and one of the committees might say, ‘Well, we have someone who has a strong background in that,’” explains Morriss-Mueller. “On its own, each council couldn’t have mounted a broad-based number of people to help with this process, but between us we’ll be able to have people who will be able to contribute much more.”
Hearn Smith, whose newly merged Central Indianapolis Council will serve 40,000 girls in 33 counties, agrees that the benefits have already emerged. “A simple example is what we offered this past summer to girls,” she says. “Before, most councils could offer one day-camp experience. Most girls had no choice in terms of Girl Scouting—just whatever that council could afford. This summer, the merged council offered two residential camps—and for the first time ever—and several day camps with different themes. That is a direct result of the merger, and it could not have happened any other way.”
Another anticipated benefit is the resources the program expects to attract. Diane Nelson, whose merged council will serve 20,000 girls in eastern Iowa and western Illinois, says her new council has already seen the impact in terms of fund development. “For example, John Deere is a huge corporation based near here, and we’ve never been able to capitalize on the fact that their headquarters is here; all of us were going to them for these small amounts of funding,” she states. “Since the realignment, they have been very excited to partner with us, and through their support we are able to serve a larger swath of the community.” Green-Rupert of the Minneapolis Council agrees. Her council, which will merge in October 2007, will serve more than 50,000 girls and engage 18,000 volunteers in more than 49 counties. “Serving 51,000 girls will mean this huge impact,” she says. “We will be able to offer so much more varied programming, and that will also have so many more opportunities to reach new girls across the new vast region we’ll be serving.”
While there are clear efficiencies and benefits that come from consolidation, there are inevitably downsides as well. What happens to community involvement in a council serving 30,000, 40,000, or 50,000 girls? The council will still have satellite offices in various communities, but organizational control will now reside in a single board whose home base is perhaps hours away from a satellite office rather than in four or five boards in local communities. Even with board representation from these communities, there will be diminished influence for everyone in such a large system. Hearn Smith explains. “Volunteers are starting to understand and experience the change,” she says. “For example, before each of the five councils had an annual meeting, and those were usually planned by volunteers. This year there will be one annual meeting. For those volunteers not running each of their own meetings, [it] will be a challenge; there will be other opportunities to participate, but it will be different.”
Another challenge will be the emphasis on consistency of practice, which all local councils identify as a need. But creating consistency needs to be managed such that it doesn’t stifle local innovation and creativity. Morriss-Mueller says that the new emphasis on outcomes and program uniformity will likely be challenging for some volunteers.
“One of the things that we’re being challenged to do that I think might cause some fallout is to be more outcome oriented and to be able to document our results,” she says. “There are some people in our Girl Scout world that might say, ‘I’ve been a Girl Scout leader for a few years, and now you’re telling me that I have to complete these 12 sessions?’ In the past, the great thing about being in Girl Scouting was we could do whatever we wanted, and that was fine. But now, with the new Girl Scout leadership development model, the expectation is that it’ll be clear up front that we’re going to complete this series or cycle of activities, and that’ll be different for people, and that may be where people will say, ‘I’m not comfortable with having that expectation.’” While the Girl Scouts is altering the dynamics of local control to standardize and document the program’s achievements, the national organization must be careful not to deplete the very system that has, even with huge variations, created the local investment and national prominence that the Girl Scouts enjoys today.
In making these dramatic changes, the Girl Scouts has reviewed its history and the current context and tried to identify the steps that will secure its longevity and organizational affluence. In doing so, the Girl Scouts is not just altering its own organizational dimensions but also changing the way federations as a whole might look in the future. In his book Images of Organization, Gareth Morgan writes, “It is misleading to suggest that organizations need to ‘adapt’ to their environment, as do the contingency theorists, or that environments ‘select’ the organizations that are to survive, as do the population ecologists. Both views tend to make organizations and their members dependent upon forces operating in an external world rather than recognizing that they are active agents operating with others in the construction of that world.” 10
At the very least, the Girls Scouts has actively tried to adapt, altering its look, feel, and organizational DNA. Few nonprofits have taken on such a massive social experiment, and even fewer have done it in a planned and deliberate way, but has the Girls Scouts chosen the right set of answers? Was it concentrated on the most significant questions? Will the results yield a stronger and more effective organization in the service of girls, or will the very strengths that have distinguished the organization be inadvertently sacrificed? We will have to wait and see where these changes take the Girl Scouts, other federated organizations, and the rest of us.
1. Girl Scouts of the United States of America Web site (www.girlscouts.org).
2. Maisie O’Flanagan and Lynn K. Taliento, “Nonprofits Ensuring That Bigger Is Better,” the McKinsey Quarterly, No. 2, 2004.
3. Ibid., p. 114
4. The phrase “good to great” comes from Jim Collins’s From Good to Great: Why Some Companies Make the Leap . . . and Others Don’t, Harper Collins, 2001.
5. Candace Widmer and Susan Houchin, “Governance of National Federated Organizations,” the Aspen Institute, Winter 1999.
7. Allen Grossman and V. Kasturi Rangan, “Managing Multisite Nonprofits,” Nonprofit Management and Leadership, Vol. 11, No. 3, Spring 2001.
9. Lisa Black, “Scout Councils Opt Out of Shift: 2 Area Girls Groups Resist Consolidation,” the Chicago Tribune, July 3, 2007.
10. Gareth Morgan, Images of Organizations, Sage Publications, 1997.
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