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