By Donald Summers, Ed.M.
Would you rather have a hammer or a dogleg reamer? How about a screwdriver or a ball-end glass cutter?
Truth be told, your choice of tool all depends on the situation. That being said, if you’re putting together your very own household toolbox, you probably want to fill it with the essentials — the tools you’ll always need and will make the most lasting impact on your home.
In the world of modern tools, those essentials stay pretty constant — hammer, tape measure, screwdrivers, pliers, wrench. In the world of nonprofit organizational leadership, however, the essentials that make for the most effective toolbox are always evolving. These standards evolve alongside the industry as a whole, as well as the mounting environmental or socioeconomic challenges its organizations hope to address.
Simply put, yesterday’s essentials for succeeding at mission-driven work aren’t the same as the essentials of today and tomorrow. They are not the tools you need in your toolbox, and they do not help you and your organization achieve scalable success. Rather, your organization needs a toolkit that is consistently restocked and revamped in response to the times — made complete now with the three modern essentials that ensure both sustainable success and scalable growth.
1. A business plan — yes, a BUSINESS plan.
Comprehensive and accountable planning is often the first thing overlooked by mission-driven organizations, most especially those operating on limited resources. Lacking the firm foundation needed to devise an actionable business plan — yes, a BUSINESS plan — these organizations rush from one funding crisis to another in a noble, yet misguided attempt to make their programs more sustainable.
These aren’t organizations, they’re disorganizations — and they’re traveling a dead-end road. Without the right planning, even the most valuable programs run by these nonprofits will be stuck in an endless crisis. Their only means of staying afloat will be a frantic and uncertain search for grant funding every six to nine months. Ultimately, the best possible solution will likely be the more stable confines of a highly successful nonprofit working within the same industry — a nonprofit with a comprehensive business plan.
What makes your plan a BUSINESS plan? One of the biggest roadblocks to solid planning for mission-driven organizations is the fact that many nonprofit leaders don’t fully understand what needs to be inside a business plan. Pressed to name all the most essential components, most nonprofit executives would fall far short of recalling and understanding all 14 (see list).
PROBLEM Define the problem being solved with concise descriptive statistics. | SOLUTION Identify what success looks like. | |
VALUE PROP Spell out why this is the best solution, including programs and evidence to support. | TEAM Summarize executive team qualifications and provide links to career profiles. | GOAL Articulate your vision and unifying goal. |
MARKET Define those affected by your problem, then describe who’s working to fix it. | STRATEGY Summarize how you’ll deliver social impact and execute long-term growth. | MILESTONES Illustrate the phases of organizational growth in service of your unifying goal. |
METRICS Outline a small set of key performance indicators. | MARCOM Describe who needs to be reached and what needs to be said during marketing. | REVENUE Explain how revenue is generated now and outline how it will expand alongside the organization. |
RISKS Identify foreseeable risks and outline how they will be managed. | FINANCIALS Present a summary of three- to five-year financial projections, and offer a more detailed version to those who ask. | ORG CHART Provide an organizational chart that illustrates planned growth with easy-to-read color codes to align every phase. |
2. An investment & partnership (I&P) team — with a plan of their own.
After you’ve built a comprehensive business plan, as well as a detailed pitch deck, it’s time to set the wheels in motion, start generating revenue, and ensure you hit every milestone. One of the primary forces behind this effort is your investment and partnership (I&P) team — “investment” because of your commitment to social contribution and “partnership” because of the equality you demand out of all your funding relationships.
Your investment and partnership officers (IPOs) are an essential part of developing a successful revenue strategy. During the test phase, all IPOs gather market feedback and revise the plan accordingly. During the fund phase, the IPOs continue to serve as the eyes and ears of the organization, collecting critical information to share with leadership and acting as a fundraising ambassador whenever necessary. These officers are also the primary authors of your I&P plan, which details each step of execution under every domain of revenue generation.It should come as no surprise that the chief investment and partnership officer (CIPO) is often plucked directly from the most immediate lines of succession, and their role across all forms of revenue planning is unmatched. It should also come as no surprise that experienced fundraising officers are essential, and the 16-month average tenure within the nonprofit industry is a big part of what is holding back more substantial progress.
What should your I&P plan cover? This is typically a one-page spreadsheet with all revenue domains labeled as the rows and the key stages of development for each domain (see list) labeled as the columns. Track the progress of each domain and keep detailed notes about every big change.
SEGMENT Separate your revenue goals into distinct categories, often major investors, monthly supporters, and planned gifts. | GOAL Use your business plan to identify fundraising dollar goals for each domain. | AVERAGE INVESTMENT Make a forecast about the average investment per domain, using historical data if needed. |
PROSPECTS Combine your average investment and your expected conversion rate to get a sense for how many prospects you need. | PARTNERSHIP, ACQUIRE Comb through prospects to filter out those with capacity, affinity, and accessible contact information. | PARTNERSHIP, BUILD TRUST Take the time to cultivate a long-term relationship with the most qualified prospects. |
PARTNERSHIP, PROPOSE After learning about the needs of your prospects, make an individualized proposal. | PARTNERSHIP, ACCEPT Understand that every proposal is unique and end every acceptance with specific next steps. | PARTNERSHIP, DENY Remember that even the most qualified prospects will say no about 70% of the time. |
PARTNERSHIP, REPORT Follow up about the impact you make because only 45% of donors typically return the same charity each year. | VOLUNTEERS Board members can be invaluable, but keep them focused on high-level liaison work. | STAFF A successful fundraising team makes all the difference, so be sure staff is compensated appropriately. |
OPERATIONS BUDGET Spell out the expenses behind your events, your website, and your CRM system. | STAFF BUDGET Be thoughtful and deliberate about where staff should spend their time, then put a price on it. | TOTAL BUDGET Determine your cost per dollar (CPD), which should start around $0.50 and then eventually reach $0.15. |
3. An always-on executive dashboard — planned out as well.
When it comes to solving the world’s biggest challenges, plans and ideas are simple. Execution and accountability, on the other hand, are difficult and expensive. A big reason for that is because successful execution requires a constant awareness of where you are and where you need to be. You can’t just glance at the horizon and hope you head in the right direction. You need a detailed GPS to put you on the most efficient route possible from point A to point B.
In the world of successful nonprofit leadership, this GPS is a metaphor for your always-on “executive dashboard,” which puts every critical metric at your fingertips. What’s the breakdown for your revenue domains? How much contact activity is there within your investment pipeline? What is your actual budget versus your cash on hand? Highly successful nonprofits distill all of this information into a robust monitoring dashboard, which should be easily accessible with at-a-glance visualization for the most sought-after metrics.
What should your dashboard be monitoring? Ultimately, your business plan should already contain every KPI you might hope to monitor. That said, measurement takes time and effort, so the executive dashboard has a plan of its own to filter out the most important indicators and assign them targeted goals. This plan is similar to the I&P plan with the domains labeled as the rows and the columns corresponding to the steps of each domain’s workflow (see list).
LEVEL Identify foreseeable risks and outline how they will be managed. | KPI (LAG) The outcome measure that signifies success. | LAG GOAL The desired result. |
KPI (LEAD) The activity that is performed to get to the lag — the cause of success. | LEAD GOAL Quality or frequency of desired lead activity. | SOURCE The single person who inputs the highlighted piece of data. |
INPUT FREQUENCY How often the source inputs the data. | RESPONSIBLE The person responsible for the reporting and improving of results. | REPORT FREQUENCY How often the relevant teams meet to discuss reports and potential improvements. |
Recommended Resources:
Donald Summers, Ed.M., is the Founder and CEO of Altruist Partners LLC, a pioneering social impact advisory firm dedicated to helping mission-driven organizations achieve their most ambitious goals. He has a Master’s Degree in Leadership & Policy from Harvard. Through Altruist Partners, Summers has assisted hundreds of nonprofits and mission-driven organizations globally, overcoming strategic, fundraising, and organizational challenges to amplify their social impact. Summers is also the founder and executive director of the Altruist Accelerator, the firm's nonprofit arm, which delivers the Altruist Growth and Impact Methodology to ambitious nonprofits and NGOs of all sizes and stages. His work has generated hundreds of millions in new revenue and capital; strengthened boards, staff, and volunteer teams; and advanced some of today's most crucial social change efforts. An accomplished author, Summers recently released his book, “Scaling Altruism: A Proven Pathway for Accelerating Nonprofit Growth and Impact,” which became the #1 New Nonprofit Release on Amazon. His research and essays have been featured in the Stanford Social Innovation Review, the Chronicle of Higher Education, and the American Academy of Arts and Sciences. Learn more at altruistpartners.com.
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