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strategic plan

What’s Your Nonprofit’s Theory of Change?

Theory of Change GuideOver the past few years I’ve developed a Social Velocity library of books, step-by-step guides, and webinars. My hope is that these tools can make the concepts I use with my consulting clients accessible to smaller and start up nonprofits who aren’t ready for or interested in a customized approach.

The tools follow the methods I develop in my consulting practice (like creating a financing plan, growing the board of directors, designing a theory of change) so when my consulting approach changes over time, the tools must change as well.

Which brings me to the Design a Theory of Change Guide. I created this guide a couple of years ago, but I recently changed the Theory of Change framework I use with my clients. I used to follow a more traditional logic model approach, but over time I’ve come to realize that there are really five specific and complex questions that make up a Theory of Change.

And those are:

  1. What is the target population or populations you are seeking to benefit or influence?
  2. What relevant trends in or changes to the external environment are occurring?
  3. How and where are your core competencies employed?
  4. What changed conditions do you believe will result from your activities?
  5. What evidence do you have that this theory will actually result in change?

The completely revised Design a Theory of Change Guide walks you step-by-step through answering these questions and creating your nonprofit’s own Theory of Change.

A Theory of Change is a fundamental building block to everything that your nonprofit does. Because without a Theory of Change, you won’t know what you are trying to accomplish, how you will get there, or whether you are moving towards it, and you certainly won’t attract the funding necessary to get there.

A Theory of Change can strengthen your nonprofit in many ways:

  • Guides your strategic planning process. If you understand your nonprofit’s overall Theory of Change and what you exist to do, it is much easier to chart a future course.

  • Helps revise the vision and mission of your organization, making them stronger and more compelling.

  • Gives a framework to prove whether you are actually achieving results and creating real social change.

  • Provides a filter for new opportunities as they arise. Do new opportunities fit within your Theory of Change?

  • Engages board members and other volunteers, friends and supporters in your work. If people understand the bigger picture, they will be more inclined to give more time, energy, and other resources to the work.

  • Allows staff to understand how their individual roles and responsibilities fit into the larger vision of the organization. This can increase staff morale, productivity, communication and overall commitment to the organization.

  • Provides the basic argument for a case for investment or other fundraising messaging. With a Theory of Change, you can articulate what you are working to achieve, in a compelling way.

A Theory of Change is so fundamental because you cannot chart a strategic direction if you don’t know what you are trying to change. And you can’t prove that you’ve changed something unless you have articulated what it is that you want to change in the first place. And you certainly can’t convince funders, volunteers, and key decision makers to support you if you can’t tell them what you are trying to change and whether you are actually doing it.

So to truly create long-term social change you must start with a Theory of Change, which is why I encourage every nonprofit engaged in social change to create one.

You can learn more about the Design a Theory of Change Guide and download a copy of it. If you downloaded the previous Theory of Change Guide and would like the newly revised version free of charge, let me know, and we’ll send it to you.

As always, you can see all of the Social Velocity books, guides and webinars available for download on the Social Velocity Tools page.

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10 Most Popular Posts of 2014

typewriterThe year is winding down, and I will be taking some time off to enjoy friends and family (as I hope you are too). But before I go, I want to leave you with a list of the 10 most popular posts on the blog this year, in case you missed any of them.

And if you want to see the 10 most popular posts from 2011, 2012, or 2013 you can do that as well.

I feel incredibly lucky to be able to work with you amazing social change leaders. I am grateful for the amazing work you are doing to create a better world. And I appreciate you being part of the Social Velocity community.

I wish you all a happy, relaxing holiday season, and a wonderful new year. I’ll see you in 2015!

  1. Can We Move Beyond the Nonprofit Overhead Myth?

  2. 7 Rules For Brilliant Nonprofit Leaders

  3. How to Move Your Nonprofit Board From Fundraising to Financing

  4. Why Nonprofits Must Stop Being So Grateful

  5. 5 Questions Every Nonprofit Leader Should Ask

  6. Why Do Nonprofit Leaders Get In Their Own Way?

  7. 3 Questions to Get Your Nonprofit Board Engaged

  8. 5 Ways Great Strategy Can Transform a Nonprofit

  9. Does Your Nonprofit Know How To Attract Big Donors?

  10. It’s Time to Reinvent the Nonprofit Leader

Photo Credit: Steven Depolo

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Kick Your Nonprofit Succession Plan to the Curb

There is a lot of talk about succession planning in the nonprofit sector, but for the most part, it’s approached in the wrong way. The problem with traditional succession planning is that nonprofits take a too narrow view of nonprofit leadership. It’s not enough to have a strong nonprofit executive director or CEO and to create a “succession plan” to guard against their eventual departure. Instead nonprofits need to develop a new approach to leadership that brings many people together to drive strategy.

In order to have truly sustainable and effective leadership a nonprofit must integrate four key elements into the leadership of their organization:

  • An Empowered Executive Director or CEO
  • Emboldened Staff (beyond the nonprofit leader)
  • Invested External Stakeholders (funders, regulators, policy makers, collaborators)
  • Elevated Board of Directors

These four groups should each have a role to play in any strategic decision the organization makes, like this:

If you develop an integrated leadership model like this, the organization is not overly-reliant on any single element to keep it going. So in the worst case scenario if your executive director leaves tomorrow the organization would be able to continue on until a new executive director replaced her. Similarly, an integrated leadership model like this guards against the debilitating challenges that founder’s syndrome, or the over-reliance on one leader, can pose for a nonprofit.

In order to determine whether your nonprofit has an integrated leadership model, start by asking yourself these questions:

  • Does your staff feel comfortable speaking their mind at staff and board meetings?
  • If your executive director left tomorrow would your nonprofit survive?
  • Does your board get excited and engaged at most board meetings?
  • Do they have and express diverse viewpoints?
  • Do they drive the strategic direction of your organization?
  • Do you have a real strategic plan that drives the day-to-day work of the organization?
  • Do funders, board, stakeholders have relationships with staff members beyond just the executive director?

If you answered “No” to many of these questions, you may need to strengthen these four elements so that your nonprofit has a sustainable leadership model. How do you get there? You:

  • Create a groundbreaking board that focuses on strategy, not weeds, and structures itself for engagement.
  • Create and monitor a REAL strategic plan.
  • Evaluate the performance of the board and the Executive Director at least annually.
  • Conduct annual, anonymous 360 staff evaluations, where each staff member (including the ED) evaluates herself, any of her direct reports, and her supervisor.
  • Have staff contribute at board meetings and encourage their relationships with board and external stakeholders.
  • Make external stakeholders (funders, policy makers, influencers) a key part of your organization by including them in committees or meeting with them regularly to solicit thoughts and feedback.

The nonprofit organization of the 21st century must be led by a diverse and distributed army of people both inside and outside the organization. Relying on only one person to lead is setting the organization up for failure.

Photo Credit: stephclark


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The Problem with Strategic Planning

The term “strategic plan” has become so misused and abused in the nonprofit sector that it has almost become meaningless. So many organizations have undergone a poor strategic planning process. But the fact remains that to be truly effective at creating social change a nonprofit organization MUST have a strategy for the future and a plan for how they will get there.

There are some very clear ways that a good strategic plan differs from a poor one:

  • A good strategic plan starts from an in-depth understanding of the outside community marketplace in which the nonprofit operates (trends in clients, funders, competitors, etc). Whereas a bad strategic plan is created in a vacuum among only board and staff. One nonprofit told me that at a board retreat years ago, board members were asked to write their goals for the organization on post-it notes, which were then tacked all over the room and voted on. And like that, their  strategic plan was born.

  • A good strategic plan forces the organization to articulate its value proposition, i.e. how the organization uniquely uses community inputs to create significant social value (change to a social problem). A poor strategic plan fails to articulate a value proposition and assumes that everyone outside the organization loves it and understands its value just as much as everyone inside the organization.

  • A good strategic plan puts everything on the table and allows no sacred cows. Board members with pet interests are reigned in and staff members who are not contributing are encouraged to realign themselves with the new plan. A poor strategic plan only deals with the easy or non-controversial issues and leaves the difficult questions aside.

  • A good strategic plan makes sure that the strategy for programs is aligned with the organization’s business and financial model so that the resulting strategic plan includes programs, financing and operations in an integrated way. A poor strategic plan focuses only on programs and assumes that the money will somehow follow.

  • A good strategic plan includes a tactical plan so that the broad goals are broken down into individual steps to get there. This allows the organization to monitor and revise the plan on an on-going basis. A poor strategic plan has no tactical plan or monitoring system attached to it. Once approved, staff or board don’t see it again and it certainly doesn’t drive the day-to-day activity of the organization.

  • A good strategic plan is inspiring and compelling to potential funders. It sets forth a bold vision for the future and a specific road map for getting there, which inspires confidence and investment. A poor strategic plan is boring, maintains the status quo, and elicits only nominal external support.

It’s not enough to go through the “strategy” motions. A real strategic plan is bold, compelling, tactical, well-financed, integrated and inspiring. It gets everyone (staff, board, funders, volunteers, clients) moving forward in a common direction from which real change flows.

If you want to learn more about the strategic planning process I take Social Velocity clients through, go here.

Photo Credit:

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8 Nonprofit Inflection Points and How to Seize Them

In the lifecycle of any nonprofit there comes a time when something needs to change. Call it an inflection point, a resetting, a fork in the road. I see it all the time. Someone in the organization takes a step back and realizes something just isn’t going to work anymore. It’s a critical point. It’s the point at which you decide whether you are going to take the leap and make this a year of real change.

When that moment comes, and you feel the urge to really do things differently, don’t shy away from it. Take the leap.

Here are eight of the most common nonprofit inflection points and how Social Velocity can help you seize the opportunity they present:

  1. Board and staff are floundering and don’t know where the organization is going:
  2. Everyone is fed up with fundraising
  3. Your approach to a community problem has become too narrow
  4. Your board is not helping to move the organization forward
  5. You can’t effectively articulate your nonprofit’s value to the community
  6. You need money to strengthen the organization, but don’t know where to look
  7. There is a much greater need for your nonprofit’s programs, but you can’t afford to grow
  8. You’re worn out and need to be inspired

Photo credit: besar_bears

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Financing Not Fundraising: The Plan

A few months ago I argued that nonprofits need to stop fundraising and start financing for social impact. As I wrote:

Fundraising in its current form just doesn’t work anymore.  Indeed, traditional fundraising is holding the sector back by keeping nonprofits in the starvation cycle of trying to do more and more with less and less. Really, what the sector needs is a financing strategy, not a fundraising strategy.  By that I mean that nonprofits have to break out of the narrow view that traditional FUNDRAISING (individual donor appeals, events, foundation grants) will completely fund all of their activities.  Instead, nonprofits must work to create a broader approach to securing the overall FINANCING necessary to create social change.

The idea is that nonprofits can no longer work towards social impact on one side and throw a gala event (or send out a direct mail appeal or write a grant) on the other side and think that this disjointed, haphazard way of funding their work is sustainable. To truly achieve social impact, nonprofits need to take a huge step back and figure out how to employ all of the financial tools available to them in an effective, integrated way.  This is how you finance, rather than fundraise for, social impact.

Over the next few months, in an occasional series titled Financing Not Fundraising, I will elaborate on this argument and demonstrate what financing, as opposed to fundraising, for social impact looks like.

Today I will launch the series with the core element of the idea, which is a financial plan. In essence, a financial plan is a key element of, not separate from, a nonprofit’s strategic plan. That means that the goals of the strategic plan are created with the full knowledge of 1) what it will cost to reach those goals and 2) how the money to cover those costs will be secured.

A financial plan differs from a fundraising plan in a number of ways. A financial plan, unlike a fundraising plan:

  • Includes ALL activities that bring money in the door (individual donors, foundation grants, earned income, corporate sponsorships, government contracts, loans, etc.) and fully integrates them into an overall strategy and execution plan.
  • Supports the short AND long term goals of the organization
  • Funds the programs AND infrastructure of the organization. It recognizes the necessity of and supports not only the nonprofit’s direct service activities, but also, the infrastructure, systems, planning and other organization building that will ensure that those services thrive and grow
  • Understands the characteristics and uses of different kinds of money (i.e. revenue versus growth capital, loans versus grants) and employs each available financial vehicle in the most effective way
  • Employs money-securing activities that are in line with, not opposed to, the core competencies of the organization

If you are interested in having Social Velocity help you create such a plan, check out our Financing Plan consulting service, or if you’d rather create it on your own with our tool, check out our Financing Plan Step-by-Step Guide.

What I am suggesting is that nonprofits stop exhausting their boards, staffs, donors, friends, and clients with a series of disjointed activities that are meant to raise money, but actually just end up making poor use of a nonprofit’s already limited resources. Instead, nonprofits need an integrated, thoughtful, strategic financing plan that makes social impact a reality.

If you want to learn more about applying the concepts of Financing Not Fundraising to your nonprofit, check out our Financing Not Fundraising Webinar Series, or download the 27-page Financing Not Fundraising e-book.

Photo Credit: Steve Wampler

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A Strategic Approach to Generating Revenue

The one common frustration shared by the various organizations I work with is money.  How do we get more of it, how do we use it more effectively, how do we generate it more easily, how do we make it sustainable?  My answer to all of these questions is to take a more strategic approach.

I’ve written before about how revenue in the nonprofit sector is often thought about separately from mission and core competency.  It is sometimes (more often than not) viewed as the step child of the true work of an organization.  Money is the stressful, dirty, tireless work that takes an organization away from what they should be doing.

However, if an organization can fully integrate money into their overall organization, it can become a powerful resource which can help the organization do more in a more sustainable way.  But how does an organization get there?

The first step is a comprehensive, easy to implement strategic plan.  When working with organizations, I employ an 8-step process for creating a strategic plan that takes away the mystery and ineffeciency present in many strategic planning processes.

But what does strategic planning have to do with fundraising?  Absolutely everything.  Without a clear vision and direction for an organization–a clear path forward–what donor wants to invest?  No one wants to throw money at a problem.  People want to understand what they are buying, or investing in.  What is the end goal? How are you going to get there?  How do you know this is the right approach?  Even the smallest donor will give more over a longer period of time if they can understand how what they are giving fits into a larger picture and will result in some significant change in their community.  So an overall organizational strategy will reap tremendous financial rewards.

But any effective strategic plan must have an integrated financial plan.  What are the resources at your disposal (staff, technology, buildings, materials, programs), how much will they cost and how will you generate the money to pay for them?  You cannot have a realistic strategic plan without a corresponding financial plan. The financial plan lays out the revenue and expenses over the period of the strategic plan.  What is it going to cost to get to your goals (expenses) and how will you pay for them (revenue)? Going back to the critical importance of aligning your mission, resources and core competencies, you must weigh your expenses against your realistic ability to raise that amount of money.  Can you really raise enough money, given where you are right now, to meet all the goals of your strategic plan?  If not, then one of two things has to change. The first option is to limit the goals of your plan to make them more affordable.  The second option is to increase your revenue engine to meet the cost of these goals.  Therefore the strategic plan and financial plan have to be created in conjunction with each other.  It is a back and forth process where one plan feeds and is altered by the other.

Once you have a realistic financial goal, you need to create the annual revenue plan to get there.  Notice I didn’t say “fundraising plan.”  Nonprofit organizations need to elevate how they think about the money required to reach their organizational goals.  Fundraising, raising money from private sources (individuals, foundations, corporations), is just one part of the revenue options available to nonprofits.  Other options include: earned income (selling a product or service), government grants, fee for service, corporate sponsorships, debt, growth capital, and so on.  By using the term “revenue plan,” as opposed to “fundraising plan,” a nonprofit begins to explore other revenue opportunities.  That is not to say that every nonprofit should explore every revenue opportunity.  Nonprofit organizations do, however, need to expand their options.

Just like a strategic plan, a revenue plan should have 3-5 broad goals.  So, perhaps you break your revenue types into 3-5 buckets.  Then create the road map for hitting those revenue targets in each area.  What infrastructure needs to be in place, what campaigns will you take on, how will you go about bringing that money in the door, who is responsible for each activity, what is the timeline?  And you begin to craft a comprehensive revenue plan.  It can seem like an overwhelming process, but if you are strategic and systematic about it, you can break an overwhelming goal down into manageable chunks and pretty soon you are raising more money that you thought possible.  I did this at KLRU, increasing annual operating revenue by $1.6 million.  And I’m helping several of my clients create and implement similiar revenue plans.

There is a way, even in the midst of a recession, to generate the money necessary to achieve your goals.  But it requires an integrated, strategic approach.

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Friday, May 1st, 2009 Financing, Fundraising, Nonprofits 1 Comment

Plan in the Face of Uncertainty

As I continue to meet with nonprofit organizations, it amazes me how few have a detailed, comprehensive strategic plan.  And as I write that I can imagine many rolling their eyes at the dreaded words: strategic plan.  Why is planning such a dirty word?  I know it can be time-consuming and involve tremendous effort, but the payoff, if done well, can be enormous: better program results, more effective use of resources, improved staff morale, more engaged board of directors, and so on.  And in these days when resources are tighter than ever, a solid, well-thought out plan ensures that every last resource (financial, staff, volunteer) are used most effectively.

I realize that much of the lack of affection for strategic planning comes from the fact that it can be an organic process.  And sometimes a strategic planning process can waste a lot of time but result in very little.  Or, if it does result in a plan, that plan sits on bookshelves gathering dust.

A real, successful strategic plan lays out a clear path over a future period (3-5 years) with concrete steps to get there.  Then, the plan is revisited, measured, updated by all involved monthly, if not daily.  In essence a good strategic plan is very simple:  this is where we want to be, this is how we are going to get there, now get to work.

So here is my suggested strategic planning process.  I will preface this with my bias that an outsider should be involved in some of the facilitation of this process.  If a staff or board member facilitates there will be a bias to the process and the results will be suspect.  An objective third party can ask the hard questions that others within the organization are afraid to, make sure that discussions stay on track, keep the end goal  always in sight, and ensure that an organization doesn’t just settle back into their normal way of doing things.

There are 8 basic steps to a good strategic planning process:

  1. Conduct a SWOT: strengths and weaknesses (of the internal organization) and opportunities and threats (facing the organization from external circumstances) among staff, board, and other key constituents to the organization.
  2. Do some research on your competitors (those providing similar services in the community) and your consumers (funders and clients) in order to understand trends and reactions to those trends.  This will help you determine how your organization needs to react in the coming years.
  3. Revisit/refine the vision and mission of the organization.  These two things are very different, but are often confused.  The vision of the organization is the future reality in the external world that the organization would like to see, for example:  “An end to homelessness.”  It isn’t necessarily achievable, but it is what the organization is striving to make happen.  A mission is how the organization is working towards that vision.  It describes the impact point and what the organization exists to do, for example: “To move the homeless population of Phoenix off the streets through access to education, healthcare and job training.”
  4. Create 3-5 broad goals for the organization in the specific timeframe of the plan.  What is it that you want to accomplish in the next X years that will help you achieve your mission?  More than 5 goals are too much for staff and board to focus on.
  5. Break each of the 3-5 broad goals into activities, or steps to get there.  What is it going to take to make each goal happen?  What are the specific activities that need to occur?
  6. Create a timeline with deliverables, people responsible and due dates for each activity.
  7. Create an electronic, interactive format for the timeline so that each staff member can update their piece of the plan on a regular basis.
  8. Monitor and measure achievement of the deliverables and the overall goals at least quarterly, and revise the plan as needed.

The key to a successful strategic plan is getting staff and board members involved early and often.  That is not to say that the entire board and staff should participate in each step of the process.  Rather, create a team to lead the process and then find ways throughout to get feedback from others (surveys, retreats, lunches, meetings, etc.).

Finally, a good strategic plan doesn’t have to be long, arduous and difficult to comprehend.  To the contrary, the more basic and simple you can make it, the better.  The end goal is that everyone in the organization will understand the overall plan and how their efforts fit into it.  With everyone on the same page marching toward a shared vision success can be achieved.  And those scarce resources will be made to reach even farther.


Tuesday, January 6th, 2009 Planning No Comments


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