The Importance of Understanding Stakeholders

Every program evaluation is conducted in a context in which there are parties (persons, organizations, etc.) who have an interest, or a “stake,” in the operation and success of the program. In the corporate world, a “stakeholder” is any member of the “groups without whose support the organization would cease to exist.” (see Corporate Stakeholder). More recently, the idea of “a stakeholder” has been broadened to include “any group or individual who is affected by, or who can affect the achievement of, an organization’s objectives.” (The Stakeholder Theory Summary.)
Indeed, in the not-for-profit world, stakeholders may include an array of persons and organizations including funders, community members, program participants, family members, volunteers, staff, government agencies, and the broader public.

Stakeholders in non-profits usually fall into one of three categories of legal statuses:

1. Constitutional stakeholders such as board members or trustees of the non-profit organization
2. Contractual stakeholders, including paid staff, or any business, group or individual that has a formal relationship with the organization.
3. Third-party stakeholders including all the people and groups that may be affected by what the organization does. That includes businesses, the local government, and the citizens who live in the community. (See What is a Stakeholder of a Non-profit.)

Nonprofit stakeholders may range from those who support an organization, to those who oppose an organization. Stakeholder can include advocates, supporters, critics, competitors, and opponents. In its analysis of stakeholders in policy change efforts, the World Bank uses the categories of “promoter,” “defender,” “latents”, and “apathetics.” (See What is a Stakeholder Analysis.)

Conducting a stakeholder analysis is very useful for both evaluation and strategic planning efforts. Identifying various stakeholders’ interests in an organization’s mission and programming can help non-profit leaders and staff to be sure that their efforts and initiatives are achieving desired goals. They can also be useful in ensuring that the needs of those served are being directly met. For both evaluation and strategic planning purposes, a stakeholder analysis is an important process for achieving a shared understanding of each stakeholder’s specific interest in, and relevance to, the work of the non-profit or educational organization.

Brad Rose Consulting has developed a unique approach to stakeholder analysis, one that can be extremely useful as organizations examine the purposes, goals, specific activities, and desired outcomes of their work. We often work with organizations to implement stakeholder analyses. These analyses are helpful both in identifying where an organization is, at any given point in time, and for identifying where it wants to go in the future. You can see our basic stakeholder analysis form here.

Resources

Corporate Stakeholder

Stakeholder Theory

Summary of Stakeholder Theory

Stakeholders of a Typical Non-Profit Organization

What is a Stakeholder of a Non-profit