930 Wednesday Bell State

Nonprofit Sustainability Clinic

Jeanne Bell, CEO CompassPoint Nonprofit Services

session objectives

1. Achieve a lab effect where real work gets done

2. Define sustainability

3. Distinguish between planning, deciding, and strategy

4. Introduce the Matrix Map tool for defining and refining a nonprofit’s business model

5. Identify business lines

6. Identify impact criteria

7. Create a business model statement

8. Create initial list of strategic imperatives/decisions

9. Determine next steps for your organization

defining sustainability

“Sustainability encompasses both financial sustainability (the ability to generate resources to meet the needs of the present without jeopardizing the future) and programmatic sustainability (the ability to develop, mature, and cycle out programs to be responsive to constituencies over time).”

-Nonprofit Sustainability: Making Strategic Decisions for Financial Viability

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confusing planning and strategy

“Strategy is not planning.”

“Organizational strategy is about who and what the organization is in the larger world.”

“A coordinated set of actions aimed at creating and sustaining a competitive advantage in carrying out the

nonprofit mission.”

-The Nonprofit Strategy Revolution by David La Piana

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What’s the quality of strategic thinking at your organization today?

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What’s the quality of decision-making at your organization today?

what's a business model?

“The essence of a business model is that it defines the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit: it thus reflects management’s hypothesis about what customers want, how they want it, and how an enterprise can organize to best meet those needs, get paid for doing so, and make a profit.”

- Wikipedia: David Teece 2010

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Who are your customers? What do they each value? How do they pay for that value?

seeing the business model

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example: community theater

English / Spanish Plays Spanish Language

Plays

After-School Drama Workshops

Newsletter

Special Events

-

1.00

2.00

3.00

4.00

(100,000) (80,000) (60,000) (40,000) (20,000) - 20,000 40,000 60,000

Imp

act

Profitability

defining business lines

• Core programmatic activities

(don’t confuse with grants and contracts)

• Core revenue generating activities

• Dynamic over time

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What are your core business lines?

impact criteria

• Internal assessment, NOT ‘evaluation’

• Choose four criteria

– Alignment with core mission

– Excellence in execution

– Scale or volume

– Depth

– Filling an important gap

– Community building

– Leverage

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Choose and tailor four impact criteria for your business lines.

profitability

• After administrative allocation

• Restricted funds go with their program activity

• Not uncommon to have all programs subsidized by fundraising

Strategic Imperatives

strategic imperatives

strategic imperatives

strategic imperatives

Environmental Education

Restoration & Reforestation

Nursery Resource Library

Site Rentals

Direct Mail

Major Donors

Annual Event

-

1.00

2.00

3.00

4.00

(250,000) (200,000) (150,000) (100,000) (50,000) - 50,000 100,000 150,000

Imp

act

Profitability

example: environmental organization

success considerations

• financial literacy across staff and board

• quality of available data: financial and impact

• the politics of attachment

• focus on the communications and change management requirements ---internal and external---of bold decisions

• drive off of IMPACT

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strategic framework

Annual Plan

• Goals by Business Line

• Organizational Development Goals

Annual Budget

• Income and Expense

• Replenish TR Funds

Learning • Impact Metrics

• Story-banking

• Financial Metrics

Q & A /Discussion

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