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Strategic Thinking: A Nonprofit Application

In 2000, McKinsey & Co released a report on Strategic Thinking >http://www.mckinsey.com/insights/strategy/thinking_strategically. The article by Frederick Gluck, Stephen Kaufman et al does a good job describing how companies grow in their strategic capabilities as the leadership evolves through certain phases. The process usually begins with emerging financial strategies.
It seems to me that this applies to the development of nonprofit organizations. Generally, nonprofits grow with the primary intention to improve life for a target audience. Profit-making entities grow with a variety of intentions, but generally speaking, companies/businesses are hatched and grow with the intention to ultimately generate profit. But underneath it all, there is an idea that the starting core of people want to test and put to work. And that it will work better than the next group’s idea.
I believe nonprofit organizations can and do benefit from approaching their mission with a strategically-focused approach.
And, that this plan is developed in stages over time.
Take a look at the article. I’ll write more about evolving nonprofit strategy in the coming weeks.

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The Development Plan: Know Where You’re Going

One of the most important components of effective fundraising is to build revenue streams generated from a smart plan.

Revenue comes from three main streams: Earned income (program fees, interest earned in various accounts), Grants from government and corporations for specific services rendered, and then Donations from individuals. When we’re describing fundraising activities, we’re usually talking about the latter: Our efforts to acquire donations whether through an annual appeal or for a special project or a pledge to a special event.

When I work with a client on a Development Plan, we start with a focus on current donors, acquiring new donors, and building a program of effective special events. We can encompass the Grant effort, and also work on Earned income, but usually my effort with staff and development volunteers is focused on donated income. How do we engage donors? What are the marketing approaches we should apply in this work? Starting with these fundamental building blocks will get the effort moving in the right direction.

Further, the Development Plan takes into consideration how work on events and work on annual appeal sometimes dovetail. Because there can be potential annual appeal donors in our events; and there can be people who want to participate in our events who give to our campaign. So we should find ways to explore this. And social media may be useful tools (Facebook in particular) to help bridge these activities.

Time spent in formulating a smart Development Plan will help key stakeholders in your nonprofit get their work into sharper focus. Particularly if the plan clearly connects with your nonprofit mission.

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Revenue Plan to Fit Your Strategic Plan

Nonprofit organizations generally do a good job building a Strategic Plan.

The Board of Directors works with the Chief Executive Officer to identify a competent consultant to facilitate the plan process. The group decides what internal and external resources and markets need to be examined to design a Plan that addresses needs of the nonprofit primary customers: the clients and others who benefit most from the work of the organization.  If there are no sacred cows, if the environmental scan is based on data that impacts the customer base, odds are good that a sound Plan will follow.

But then will come implementation.  And for there to be solid execution of a sound Strategic Plan, the resources of this nonprofit will need to be aligned with the Plan goals.  Plain and simple.

Some program activities may need to be dropped because they’re not relevant in the current customer and market environment.

And the CEO needs to do some revenue planning to line up the resources…actual and potential….and how steps will be staged year-to-year during the life of the Strategic Plan to generate revenue so the Plan comes to fruition.

The Revenue Plan is not just about fundraising.  There are fee-for-service considerations, grant considerations, cause-related-marketing considerations.  Does the nonprofit have access to the expertise to plan this out?  Having just come out of a Strategic process with a paid consultant, it can be a tough sell for the Board to buy the idea of investing another chunk of fancy change for an expert to help shape the Revenue piece.

Think about it for a second. Maybe even a minute.  Investment in expertise can pay dividends for the nonprofit. To get beyond Planning to Execution.  This is why so many organization founder after they have a Plan which ends up on the proverbial “shelf.”  There’s likely new stuff to do in the Plan.  And “new” can benefit from some new, outside thinking.

For small to mid-size nonprofits (budgets under $5 million) bringing a consultant in to advise on steps to generate the $$ that’ll get the nonprofit where it wants to go can be money well spent.  For the bigger kids on the block, the staff team and development committee in place may have the brain and muscle power to get the Revenue job done.

The important lesson from this is: When the Strategic Plan is in the can, the work is not done. It’s only just begun. And investment in execution, particularly in generating revenue, can get the necessary returns that’ll get the Plan off on the right foot.

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Another Shot of Red Bull: Kicking Up Board Energy Level

Many of you read my March 11 post on my old blogspot site (NetWorkResults) http://itstheresults.com/board-of-directors/red-bull-board-meeting. Here we are in the merry month of May and it’s time for another energy boost to help us get ready for those summer months. You remember summer, right? That time of year when life slows down? Yeah, right.
So, you’re starting your meetings with a story that exemplifies your mission. You’ve shaken up the usual line-up so new folks are reporting, brining ideas to the table.
Now what?
I recommend dusting off the Strategic Plan, giving it a kick with an update. If it’s been three years since you’ve last dug into it, let’s start summer season with a fresh look: How are we progressing on our goals? Have a few things been left in the dust? Let’s do a summer clean-up.
The chair of the board appoints a person to chair this Strategic Plan re-fresh. The committee (consisting of a couple of veteran members, a couple of newbies) meets with a senior staff person and a work plan with time line is outlined. Do we need some updated data? Are we feeling in our community that we’re pulling out of recession and beginning to see signs of life again? Have there been changes in competition? A plan is drafted and brought back to the board for approval.
This job, if well done, can re-capture the sense that you’re on the right track. And some energy can come from a feeling of working on a couple of new things: is there evidence we need a new program initiative? Do we need a new fundraising event? Can we deploy an approach to social media (Facebook, You Tube) that will boost our marketing approach?
This can help get the board feeling back-on-track.
And of course: please call on me if you’d like to discuss how I can work with you to get you that energy boost. And, of course, a sustained energy boost!

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