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Building a Sustainable Nonprofit: A Case Study

nonprofit strategyI consider myself incredibly lucky because I get to work one-on-one with some amazing social change leaders.

One of the clients I’m working with right now is the Muslim Public Affairs Council (MPAC). This is a group of incredibly smart and passionate people who are committed to improving public understanding and policies that impact American Muslims by engaging the government, media, and communities.

The challenges they face as a nonprofit organization are not unique. So I’d like to share their story as a case study.

I met MPAC in 2013. While they had been around for 25 years and aspired to be a truly national organization, MPAC struggled to build a diversified financial model and a donor base beyond southern California. At the same time the organization lacked a coherent strategy for their future work. They wanted to expand their national presence, grow their networks and influence, strengthen and diversify their funding sources, and ultimately increase their impact on a vibrant American Muslim community, but they didn’t know how to get there.

MPAC hired Social Velocity to conduct a Financial Model Assessment to determine what was holding the organization back from growing their revenue and diversifying their funding sources. I interviewed board and staff members and some external constituents to uncover what was holding MPAC back. I also analyzed MPAC’s past financial history, board and staff structure, marketing materials, fundraising activities and more to understand what was working and what was not. I delivered to board and staff a 30+ page assessment that described how MPAC could strengthen their financial sustainability.

One of the biggest things holding MPAC back financially was the lack of a future organizational strategy around which they could rally donors. Upon hearing my findings, the board voted unanimously to undertake a strategic planning process to chart a focused future direction. We then worked over the next 6+ months to develop a 3-year strategic plan to increase MPAC’s impact and financial sustainability.

Because of the new strategic plan we created, MPAC has focused their efforts and resources and are now working to implement the strategic plan and financial model recommendations. They are working to identify outside investors to help fund a growth campaign, expand the board, hire a Development Director, and streamline operations. Board and staff are excited about the new direction and are actively working to bring it to fruition. And to help MPAC in this critical change and growth phase I am coaching staff and board on how to implement the plan and set the organization up for success.

Outside guidance is sometimes critical to moving an organization forward. As Salam Al-Marayati, MPAC’s President and CEO put it:

Nell’s assessment illustrated how we were wasting resources and not connecting prospective donors with a clear message. After the board and staff read the report, we all decided to proceed with a strategic planning process. That exercise, which spanned over 6 months, opened everyone’s eyes. We now have buy-in from our most important stakeholders in the organization – the board – for change. We realized that in order to achieve growth, we have to change internally. Nell helped us to navigate the road to becoming a national organization by changing how we operate internally. Nell’s experience in nonprofit management and fundraising proved to be invaluable in our planning process. We are now beginning to implement the strategic plan are excited about this new era for the organization.

It doesn’t have to be so hard. The mission your board and staff are so passionate about can be achieved in a sustainable way.

You can learn more about how I work with nonprofits on my Consulting page, and you can read more case studies on the Clients page. If you’d like to discuss how I might work with your nonprofit, let me know.

Photo Credit: Evelyn Simak

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Speaking With Social Change Leaders

Nell EdgingtonOne of the things I love about my job is that I get to travel to different parts of the country talking with groups of social change leaders about how to think about their work in new ways. I speak to nonprofit and philanthropic conferences, events, groups, even boards about trends in the nonprofit sector and how social change leaders must adapt.

Recently I have spoken to groups in Portland, Seattle, Sacramento, Dallas, and Idaho. You can see a video of me speaking to the Seattle Association of Fundraising Professionals Conference below (or click here) where I was talking about one of my most popular topics, How to Move From Fundraising to Financing.

I speak about any of the topics covered in the Social Velocity blog, but here is a general list of topics:

  • Speaking Engagements One SheetMoving From Fundraising to Financing
  • The Future of the Nonprofit Sector
  • Overcoming Nonprofit Myths
  • Reinventing the Nonprofit Leader
  • The Power of a Theory of Change
  • Getting Your Board to Fundraise
  • How To Raise Capacity Capital
  • Creating a Sustainable Financial Model
  • Messaging Impact
  • Creating a Succession Plan
  • Honest Conversations Between Funders and Nonprofits
  • The Critical Connection Between Mission and Money

If you want to learn more about having me come speak to your event or group, download the Social Velocity Speaking One Sheet, or visit the Speaking page to learn more.

Photo Credit: Social Velocity

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10 Great Social Innovation Reads: April 2015

social changeApril was another busy month in the world of social change writing. From Google’s shift to mobile, to the Baltimore protests, to using sitcoms to change public opinion, to the pace of social change, to teens and social media, to a new way to measure a country’s performance, there was much to read and digest.

Below are my 10 picks of the best in the world of social change in April, but please add to the list in the comments. And to see what else I found beyond these 10, follow me on Twitter, Facebook, Google+, or LinkedIn.

And you can read past months’ 10 Great Reads lists here.

  1. There was much analysis about what went wrong in Baltimore, but I found the most insightful to be Dan Diamond’s Forbes piece about how it is fundamentally a “tale of two cities” and the persistent inequality between two very different Baltimores.

  2. As is Google’s way, they made a huge change to their search algorithm in late April that will affect us all. Google is now favoring websites that are mobile friendly. But fear not, Beth Kanter offers some advice for upgrading your nonprofit’s website.

  3. For those in the trenches, the pace of social change can seem glacial. But this great graphic from Bloomberg demonstrates that for many issues (prohibition, interracial marriage, women’s suffrage, same-sex marriage) there was a tipping point at which America very quickly changed its mind. Fascinating.

  4. Civic Tech, or using technology to make citizens more engaged and government more effective, is a huge investment opportunity, says Stacy Donohue from the Omidyar Network. With venture capitalists, the federal government and nonprofit and for-profit solutions all poised to make change, Donohue sees civic tech as a “very real, very now investment opportunity.” Let’s hope that new ideas and (most importantly) lots of new money can turn our struggling democracy around.

  5. Social change can happen in many different ways, including by altering popular culture. Former Daily Show correspondent Aasif Mandvi is attempting this kind of shift with his new web sitcom that takes a “Cosby Show” approach to portraying American Muslims in order to combat Islamophobia.

  6. Writing in Slate, Krista Langlois takes a hard look at her fellow environmental journalists and whether they have failed to adequately describe the environmental challenges facing our planet since American concern about climate change has actually declined in the last 20 years.

  7. One of the most common hurdles to nonprofits raising capacity dollars is the challenge of articulating to funders the potential impact of a capacity investment. Grantmakers for Effective Organizations (GEO) have put together some tools to help funders understand the importance of and return on capacity investments. Share these with your funders.

  8. In April, MIT and the Social Progress Imperative launched the Social Progress Index, an effort to create a complement to the Gross Domestic Product that measures a nation’s social and environmental performance. The Social Progress Index looks at 52 indicators of a country’s social and environmental performance (like child mortality rate, adult literacy rate, greenhouse gas emissions). As Michael Porter, one of the chief architects behind it puts it, “Measuring social progress offers citizens and leaders a more complete picture of how their country is developing. And that will help societies make better choices, create stronger communities, and enable people to lead more fulfilling lives.”

  9. Writing on the Huffington Post Politics blog, Robert Reich describes a worrying trend where nonprofits are silencing themselves for fear of losing their big donors. As he writes, “Our democracy is directly threatened when the rich buy off politicians. But no less dangerous is the quieter and more insidious buy-off of institutions democracy depends on to research, investigate, expose, and mobilize action against what is occurring.”

  10. And finally, if you want to understand where social media is going, Pew Research Center released their most recent findings about teens use of social media and technology.

Photo Credit: Patrick Neil

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The State of the Nonprofit Sector in 2015

nonprofit sector surveyEarlier this week the Nonprofit Finance Fund released the results of their 7th annual State of the Sector survey about the financial health of the American nonprofit sector. This on-going survey, now in its 7th year, has become a fascinating marker to gauge how the nonprofit sector is evolving amid a changing economic climate.

The Nonprofit Finance Fund launched the survey in 2008, when the economic crisis was just beginning. This year results from 5,451 respondents show some positive signs of adaptation and growth, but also recurring challenges that continue to face the sector.

You can see the full results of the survey here and slice and dice the data yourself with their Survey Analyzer Tool here. But here are some of the key findings of this year’s survey.

Nonprofits are unable to meet a growing demand for their services:

  • 76% of nonprofits reported an increase in demand for services – the 7th year that a majority have reported increases.
  • 52% couldn’t meet demand, the third year in a row that more than half of nonprofits couldn’t meet demand.
  • Of those who reported that they could not meet demand, 71% said that client needs go unmet when they can’t provide services.

Nonprofits still (not surprisingly) struggle to make ends meet. While some nonprofits are achieving financial sustainability (47% ended 2014 with a surplus, the highest in the history of the survey), many still face real challenges:

  • 53% report three months or less of cash-on-hand.
  • 32% find achieving long-term sustainability a top challenge.
  • 25% struggle to be able to offer competitive pay and/or retain staff.
  • 19% can’t raise funding to cover their full costs.

And these financial challenges are due in large part to the catch-22 funders place nonprofits in by routinely covering only a portion of the full costs of the programs they intend to support:

  • 70% of survey respondents receiving Federal funding report that the government never or rarely pays for the full costs of delivering services.
  • 68% of respondents who receive state funding say the state government never or rarely pays for the full costs of delivering services.
  • 47% of respondents who secure foundation funding report that foundations never or rarely cover their full costs.
  • While 89% of nonprofits are asked to collect data to capture the effectiveness of programming, 68% of funders rarely or never cover the costs associated with measuring program outputs or outcomes.

So we still have a long way to go.

But those nonprofits who are faring well in this environment are those being strategic. As one human services nonprofit leader put it:

“Sustainable funding continues to be our greatest challenge. Our actions to address this challenge include developing and adhering to a strong and dynamic strategic plan; diversifying our program funding streams as much as possible; developing and communicating a strong community impact statement for our programs; and focusing on increased donor engagement in order to increase fundraising dollars.”

You can dig further into the data from this and past years’ surveys here.

Photo Credit: Nonprofit Finance Fund

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The Strategy of Social Change [Podcast]

nonprofit podcastI’ve gotten a few requests lately to participate in social change podcast series (see my podcast with Panvisio). I love discussing the many issues in social change work, so I’ve really enjoyed being part of these discussions.

This month Greg Cherry of The Philanthropy Hour asked me to participate in a podcast conversation with him as part of his ongoing podcast series with social change leaders.

In the podcast, among many topics, we discuss:

  • How leadership is the best ingredient for social change effectiveness.
  • What true leadership means.
  • What a Theory of Change is and why it’s crucial to any social change organization.
  • How to develop a Message of Impact and create a Case For Investment.
  • The importance of moving from fundraising to financing and what that shift looks like.
  • Debunking the “overhead myth.”
  • And much more…

Below is the podcast, or you can click here to listen to it.

 

Photo Credit: Ilmicrofono Oggiono

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Courageous, Adaptive Nonprofit Leadership: Pillar 1

leadershipAs I mentioned last month, the Leap Ambassadors (of which I am a member) recently released the Performance Imperative, a detailed definition of a high-performing nonprofit. Because I think the Performance Imperative is so important and every nonprofit leader should understand it and begin to use it, today I am kicking off a series to describe, one-by-one, each of the seven pillars of the Performance Imperative.

I think the Performance Imperative is so exciting because it can serve as a north star to the nonprofit sector, helping organizations analyze their own performance and create a clear roadmap for improvement.

As Lowell Weiss, one of the leading architects of the Performance Imperative, explained in my interview with him last month:

High performance is all too rare in our sector today. In fact, we don’t even have a commonly accepted definition of the term “high performance.” The Performance Imperative is our attempt to create that common definition and then start the process of creating guideposts to help nonprofits who are motivated to improve their performance for the clients and causes they serve.

So, first up in this series on the Performance Imperative is Pillar #1: Courageous, Adaptive Executive and Board Leadership.

Without true leadership, at both the board and staff level, you will achieve little as a nonprofit. This pillar is about asking hard questions, pushing the organization toward excellence, continuously improving and taking nothing for granted.

You can read the full description of Pillar #1 in the Performance Imperative, but here are a few key elements present in nonprofits that exhibit this pillar:

  • Boards “ask probing questions about whether the organization is living up to its promises and acknowledge when course correction is needed.”
  • Executives and boards “know that great talent is a huge differentiator between organizations that are high performing and those that aren’t.”
  • Executives and boards “know that they haven’t figured it all out and acknowledge that they still have a lot of work to do.”
  • Executives and boards “are constantly assessing not only what the organization should be doing but also what it should stop doing…redirecting scarce resources to the highest opportunity areas.”

In other words, nonprofit leaders who embody Pillar 1 of the Performance Imperative, ask hard questionsbuild a stellar staff, seek continuous improvement, and put resources to their highest and best use.

There is no doubt that there are many examples of this courageous, adaptive leadership in the nonprofit sector. One of those, I believe, is Molly Baldwin, founder and CEO of Roca.

Molly founded Roca in 1988, and by 2004 it was a multi-million dollar teenage pregnancy and violence prevention program.  But that year, Molly began asking some hard questions about the results Roca was achieving. She forced board and staff to take a huge step back and examine what they were doing and the ultimate effect that work had.  She led her board and staff through a rigorous refocusing and pruning effort to limit their target populations and use data to drive their interventions. Instead of continuing a laundry list of services to many different populations that had limited effect, she helped her organization refocus resources on where they could create real change — transforming the lives of young men in the criminal justice system.

It was a challenging transition to lead, but the results are impressive. An internal study overseen by Harvard’s Kennedy School of Government in 2013 found that Roca reduced recidivism 65% and increased employment by 100% for the men in the program. And Roca was chosen as the lead provider in Masschusetts’ first pay for success effort.

Ten years ago Molly could have continued on Roca’s then current path, continuing to do “good work,” but failing to ask hard questions about whether that work was really resulting in change. But instead, Molly brought everything to a halt and forced board and staff to grapple with some fundamental and incredibly risky questions. In the end Molly’s leadership transformed Roca into an organization that is truly delivering solutions.

That’s the kind of social change leadership we need.

If you want to learn more, download the Performance Imperative and read additional case studies here.

Photo Credit: William B. T. Trego painting depicting George Washington’s army at Valley Forge.

 

 

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Nonprofit Leaders, Stop Wasting Your Time

nonprofit managementAs a general rule, nonprofit leaders are a self-less lot. You are so driven by your passion for social change that you are willing to perform any and all tasks required to get the job done. But there is a critical calculation that so many nonprofit leaders neglect. And that is to understand the value of their time and allocate that most precious resource effectively.

Yes, you read that correctly.

As the leader of your nonprofit your time is your organization’s most precious resource. Sure, board members, other staff members, and donors are absolutely critical to the work. But without you, there would be nothing. You are the visionary, the cheerleader, the linchpin around which everything (and everyone) revolves.

There are only so many productive hours in the day, so any hour you spend on one task is an hour you don’t spend on another task. You must put each hour of your working day to its highest and best use. As the most important connector for your nonprofit, you should be outside the organization as much as possible meeting with allies, funders, prospects, decision-makers, advocates who can help move your mission forward.

If you are stuck inside your organization updating a database, cutting checks, filing, or putting out fires, you are missing a huge opportunity.

So you need to use your time more effectively. Here’s how to start:

Create a Strategy
When a nonprofit creates and then manages to an overall strategy there is less time spent putting out fires and more time achieving outcomes and goals. So convince your board and staff to create a strategic plan and then manage to that plan. Move your organization’s culture from the reactive to the strategic and watch how you (and your staff and board) get more accomplished in the same amount of time.

Manage To Goals, Not Tasks
Once you have a strategy in place, you can manage your staff to goals, instead of discrete tasks. Whenever possible, delegate whole projects instead of specific pieces. Give a staff person the end goal you have in mind and the tools they need to get there and then empower them to do it their way. Check in on a regular basis to see how they are doing, but resist the temptation to micromanage. In so doing you get more off your plate while giving your staff license for creativity and initiative.

Regularly Meet One-on-One With Staff
I know I’ve said it before, but I’m a HUGE fan of the management power of weekly one-on-one meetings with each member of your staff. There are so many benefits. Your staff interrupts you less frequently because they know they have your undivided attention once a week, you are more willing to delegate because you know you have regular check-in points, staff learn how to problem solve on their own, and (most importantly) you have more time to GET OUTSIDE.

Find Administrative Help
As head of your nonprofit you must free yourself, as much as possible, from paper pushing tasks like filing, database maintenance, accounting. If you have the budget, hire an administrative assistant. If you don’t have the budget, recruit a volunteer to provide office support until you can grow your financial model to support administrative help. And while you are at it, outsource your accounting to a freelance bookkeeper or virtual CFO. Don’t put your administrative support at the end of the list of things your nonprofit needs. The sooner you free up your time, the better off your entire organization will be.

Nonprofit leaders, stop selling yourself and your organization short. Your time has tremendous value. So think clearly about how you allocate that limited resource and find solutions that put your time to its highest and best use. Free yourself to be the connector, fundraiser, and leader your nonprofit so desperately needs.

If you want to learn more about nonprofit leadership, download the Reinventing the Nonprofit Leader Book or Webinar.

Photo Credit: National Archives

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10 Great Social Innovation Reads: March 2015

social changeWhat a great month March was. Just as the weather started to turn to Spring (I hope it did where you are too), there was a whole host of great reading to digest. From analysis of the new breed of philanthropists, to controversy about contest grantmaking, to mission investing progress, to tips and guides on nonprofit finance, leadership and financial advocacy, there was lots to read.

Below are my picks of the 10 most interesting reads in the world of social change in March, but as always, please add to the list in the comments.

And if you want a longer list, follow me on Twitter, Facebook, LinkedIn or Google+.

You can also see the 10 Great Reads lists from previous months here.

  1. Call me biased, but I think the biggest social change news in March was the launch of the Performance Imperative, a detailed definition of a high-performance nonprofit, by the Leap Ambassadors (of which I am one). Many reviewed the new tool, including Phil Buchanan from the Center for Effective Philanthropy who wrote that nonprofit performance is a “moral imperative.” And if you want to learn more, there is a webinar drilling down on the PI later this month.

  2. Who says online debate never results in change? There was a big discussion on the Chronicle of Philanthropy‘s site this month over the Council on Foundation’s plans to hold a “Shark Tank”-like contest for nonprofits. Many felt this contest would be a step backward, forcing nonprofits to perform for money, so the Council scrapped the contest and created instead a panel discussing the positives and negatives of contest-style grantmaking.

  3. F.B. Heron Foundation CEO, Clara Miller (formerly of the Nonprofit Finance Fund) is a true nonprofit finance visionary, and this month the Foundation passed the halfway mark on their goal of putting ALL of their capital toward mission. And writing in The Guardian, Tim Smedley would seem to agree with their goal when he makes the case for mission investing.

  4. Chris Gates (from the Sunlight Foundation) and Matt Leighninger (from the Deliberative Democracy Consortium) wrote a fascinating letter to the editors of the Chronicle of Philanthropy taking issue with Diana Aviv’s comments on recent Independent Sector research about technology and nonprofit institutions. Gates and Leighninger argue that there is great opportunity in technology if nonprofits embrace it effectively, as they put it, “It is true that the rise of the Internet is forcing institutions like governments, foundations, nonprofits, and professional associations to rethink how they operate. They have to adapt to the needs and goals of 21st-century citizens or perish. But ultimately, people want the same things they always have: to belong to a community, to have a voice, and to make an impact…if institutions can provide those things in this interconnected time, they will thrive.”

  5. American educators and education funders have focused in recent years on science and math to create a more effective and competitive American education. But Fareed Zakaria, writing in the Washington Post, thinks that’s a big mistake, “As we work with computers (which is really the future of all work), the most valuable skills will be the ones that are uniquely human, that computers cannot quite figure out — yet. And for those jobs, and that life, you could not do better than to follow your passion, engage with a breadth of material in both science and the humanities, and perhaps above all, study the human condition.” Amen!

  6. The fourth installment of Tom Watson’s on-going series about the changing face of American philanthropy focuses on the class of new, entrepreneurial philanthropists, those young, tech wealthy donors who are pushing for data-based social change. And Pascal-Emmanuel Gobry takes it even further arguing that “effective altruism,” what he calls this data-centered approach to philanthropy, is only one potential method of investing in social change, not the only or best approach. As he puts it, “making the world a better place is an inherently speculative behavior — if we knew how to do it we’d have already done it. Therefore the most prudent collective thing to do is to try a very wide swath of different approaches rather than a single one.” And as one of these new philanthropists, Facebook founder Mark Zuckerberg’s investment in Newark public schools continues to come under fire.

  7. The National Committee for Responsive Philanthropy put out a fantastic report on the need for more philanthropic investment in nonprofit leadership development. This should be required reading for every philanthropic and nonprofit leader in the country.

  8. The National Council of Nonprofits developed a guide for nonprofit leaders to advocate for their funding rights, particularly around indirect rates, with government funders.

  9. And there were lots of great tips and tools this month for becoming an effective financial leader. The Nonprofit Finance Fund released a list of tips to help “keep business and finance an integral part of decision-making.” And Kate Barr offered 6 Takeaways from the Nonprofits Assistance Fund’s annual Nonprofit Finance and Sustainability Conference.

  10. Finally, Jocelyn Wyatt from IDEA.org argues that general funding for nonprofits is the “future of innovation”. Yes please!

Photo Credit: BibBornem

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