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strategic planning

Do You Know Your Nonprofit’s Target?

targetWhen I work with nonprofit leaders to create a strategic plan, one of the first things we do together is create a Theory of Change. A Theory of Change is an articulation of why your nonprofit exists — what you ultimately hope to accomplish. The Theory of Change is the culmination of answers to a set of 5 key questions, the first of which is, “Who is Your Target Population?”

Your Target Population is the individuals or groups that your nonprofit is seeking to benefit or influence. So if you are a social services nonprofit, your target population is probably your clients. If you are an advocacy group, your target population is probably lawmakers. But often a nonprofit has multiple target populations. For example, a school that works directly with both children and their parents would have both groups as separate target populations.

When a nonprofit exists just to do good work, its leaders are less clear and less disciplined about exactly who they are seeking to benefit or influence. But it is absolutely essential that your nonprofit get crystal clear about who your target population is, in order to better create change for those targets, more effectively encourage funders to invest in what you are doing, put your limited resources to their highest and best use, and, most importantly, to really understand how best to create change with your target.

But figuring out your target population is not easy.

First, let’s start with who is not your target population:

Not Your Funders
Your target population is not individuals or groups who fund your work. While funders are absolutely critical to your success, they are not core to your mission-related work. So while you would love to influence them to give you more money, their doing that will not by itself create social change. They are not your target population, rather they are a means to an end.

Not The Targets of Your Competitors or Collaborators
Your target population is also not individuals or groups that are being better benefitted or influenced by other organizations or entities. This is where your Marketplace Map comes in (another key part of a strategic planning process). As a nonprofit you will be most successful when your 1) core competencies (what you do better than anyone else) uniquely position you to address 2) a community need, apart from your 3) competitors or collaborators. So once you figure out who your competitors and collaborators are, you should avoid target populations that are being more effectively served by those other entities.

Not Those Who You Cannot Change
Your target population is also not individuals or groups who you really want to help, but are simply not well-positioned to do so. This is the case with nonprofit leaders who are so big-hearted that they continue to add new groups to serve until they realize that their services and the people they serve range much too far and wide. This approach often spreads a nonprofit too thin and ends up providing diminishing returns for the organization and their clients. While it often goes against a nonprofit leader’s ethos, sometimes you have to turn some people away in order to better serve those who you can serve really well.

So who is your target population?

Your target population then are those people who you are uniquely positioned to benefit or influence and in doing so you will move closer to achieving your nonprofit’s long-term vision for change. When you get clearer about who you are best positioned to benefit or influence, you will be better able to direct your precious resources (staff, board, funders, volunteers) toward achieving that ultimate goal.

In other words, when you are clearer about who you want to change, you will become better at actually creating that change.

If you want to learn more about a Theory of Change, download the Design a Theory of Change Guide, or if you want to learn more about the strategic planning process I take clients through, download the Strategic Planning Benefit Sheet.

Photo Credit: vizzzual.com

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Building Better Nonprofits: A Podcast

podcastLast month I was asked by Ted Bilich, CEO of Risk Alternatives — a Washington, DC firm helping nonprofits manage their organizational and financial risks —  to participate in a podcast. This is part of their ongoing podcast series “About Risk” which talks to thought leaders about risk management and process improvement for nonprofits, small businesses, and startups.

In the podcast Ted and I talk about:

  • How the nonprofit landscape has become more competitive
  • Why nonprofits need a theory of change
  • How and when to engage in strategic planning
  • How nonprofits can determine if they are applying best practices
  • The benefits of a financial model assessment
  • How to address common risks involving a board of directors
  • And much more

You can listen to the podcast below, or click here.

And you can see all episodes in the “About Risk” series here. And if you want to listen to more podcasts about the evolving nonprofit sector, go here, here or here.

Photo Credit: Patrick Breitenbach

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5 Benefits of a Nonprofit Theory of Change [Slideshare]

nonprofit theory of changeI was speaking to a group of nonprofit leaders last month about creating a nonprofit value proposition — how to articulate the value their nonprofit creates — and it was exciting to see the lightbulb go on around the room.

Nonprofit leaders are so passionate about the work they do — it is so obvious to them why their work is critically important.

But that’s the problem.

Because it is so obvious to them, it is often incredibly difficult for a nonprofit leader to articulate to someone outside the organization (funders, volunteers, advocates, even board members sometimes) why they should become involved.

This is where a value proposition — or what I call a Theory of Change — comes in.

If you can articulate your target audience, what you do, and what you hope to achieve, you have a much greater chance of encouraging others to join your efforts.

A Theory of Change is such a fundamental building block to everything a nonprofit does. So I have created a new Slideshare presentation from the speech I gave on the 5 Benefits of a Theory of Change. In my mind, a Theory of Change:

  1. Builds a Vision, Mission and Strategy
  2. Engages Board and Staff
  3. Helps Prove Impact
  4. Allows Capacity Capital, and
  5. Attracts More Support

So, adding to the growing library of Social Velocity Slideshare presentations, below is the 5 Benefits of a Nonprofit Theory of Change slideshare, which describes these benefits in detail and shows you how to create a Theory of Change for your nonprofit.

Take a look below.

And if you’d like to learn more, download the Design a Theory of Change Guide or the Craft a Case for Investment Guide. Or, if you’d like me to come speak to your group about this or other topics, check out my Speaking page.

5 Benefits of a Nonprofit Theory of Change from Nell Edgington

 

Photo Credit: Bost

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3 Signs of a Bad Nonprofit Strategic Plan

nonprofit planningI’ve been leading several strategic planning processes lately, and as we wrapped up the last planning meeting for one of my clients (who had been encouraged to create a strategic plan by a funder) my client announced:

“I have to confess that when we started this process 6 months ago I inwardly rolled my eyes because I thought it would be a pointless process, full of silly buzzwords and with little value. I have completely changed my mind. I can already see how this new plan is making us smarter, more effective and more sustainable.”

Yep, I completely get it.

Strategic planning, when poorly done, is just a joke. But, when strategic planning is done well, it can completely transform an organization.

And there are three key places where a bad strategic plan falls short:

  1. Your Strategy Isn’t Big Enough
    To create an effective strategic plan you have to start with the big picture. You must analyze and articulate who your target audience(s) are and your theory of change. Then you must look externally to understand the needs, the competitive landscape, the funding, the changing factors in the marketplace in which you operate. Nonprofit leaders sometimes mistakenly think they are creating an effective strategic plan when they sit in a room, look around at their fellow board and staff members, and ask each other what they think they should do. It is also a mistake to think that in such a rapidly changing world you can simply develop a status quo strategy. In order to stay relevant and sustainable you have to understand how you interact with the forces outside your walls and outside your control. And here’s a little secret: the more you think about the bigger world out there, the more excited your board and funders will be by the plan. Your nonprofit doesn’t exist in a vacuum, neither should your plan for the future.

  2. Your Strategy Isn’t Small Enough
    But the other danger is to get too big and neglect the small part — the execution and monitoring of the plan. It’s great to have a bold vision and ambitious goals for the future that flow from an exciting theory of change. But that’s not enough. How will you implement it? How will you break down tasks, and responsibilities? What’s the timeline? And what is your process for determining, on a regular basis, whether the plan is actually coming to fruition? A good strategic plan, one that will actually transform your organization, requires operational detail and a process for monitoring it over time.

  3. Your Strategy Ignores Money
    There is no effective strategic plan that neglects to answer how you will finance it. That’s why a good strategic plan devotes one of its goals to money. How much will it cost to deliver on all of the goals of your plan? How will revenue (and capital if you need it) flow to meet (or exceed) those expenses? A good strategic plan forces nonprofit leadership to become financially savvy (when they may not have been before) and begin to use money as an integral management tool.

How does your nonprofit’s strategic plan stack up? Is it big enough, small enough, and well financed? If you want to learn more about what a strategic planning process looks like, check out my Strategic Planning page or download the Strategic Planning benefit sheet.

Photo Credit: ESO/H. Dahle

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Charting a Nonprofit’s Future Direction: A Case Study

Engaging News ProjectI guess I am on a case study kick this week. I do think that actual examples of the paths other nonprofits followed in order to become more effective or more sustainable can be really helpful to other nonprofit leaders in the trenches. So in that spirit, I offer a case study of a small, startup nonprofit ready to grow their impact and their sustainability.

The thing I love about my job the most is that I get to work one-on-one with super smart people who are coming up with innovative solutions to making the world a better place. In particular, lately I’ve been lucky enough to work with some groups in the civic technology space, a really exciting emerging area where innovative technology solutions are used to make government, and ultimately democracy, more effective.

One of these groups, The Engaging News Project (ENP) is a startup nonprofit aimed at helping news organizations better meet their democratic and business goals in a digital age.

While ENP enjoyed success and the support of some key funders over the past two years, they were ready to move from the project phase to an established organization with sustainable funding and a long-term strategy for achieving impact on the digital news industry.

So ENP hired me to lead their strategic planning effort. With my guidance, ENP created an advisory group of staff and key stakeholders. I led the group to analyze the external environment in which ENP operates, develop their theory of change, define the audiences they want to target, and articulate the goals and objectives and corresponding financial projections of the next 3 years for the organization. I also helped staff create a year 1 operational plan to help execute and monitor the strategic plan.

The end result was a clear 3-year strategic plan with accompanying financial model and an engaged and excited staff and group of advisors.

Because of their new strategic plan, ENP has focused their project development efforts, clearly defined where and with whom they want to work, and detailed their goals for the next 3-years.

They are now working to implement the strategic plan. They are identifying new funders to help support the growth of the organization, expanding their collaborative partners, creating a formal advisory board, and streamlining operations. ENP staff are excited about the new direction and are actively working to have a greater impact on the future of digital news.

As Talia Stroud, Director of the Engaging News Project put it,

As a new entity, we had been doing more of the day-to-day work and hadn’t taken the time to think about the bigger picture of where the Engaging News Project was headed and how to get there. Social Velocity helped us to chart a future direction, hone our messaging, and develop a clear plan for our organization. By working with us to figure out our targets, potential collaborators, and goals, Social Velocity helped us to systematically figure out a strong path forward. I can’t wait to see what we’ll be able to accomplish with these plans in place.

I’m excited to see where the Engaging News Project goes from here and the growing impact they will have on our democracy.

Photo Credit: Engaging News Project

 

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10 Great Social Innovation Reads: May 2015

social change readingMay was another busy month in the world of social change. For a start there was: a behavioral economics approach to social change, continued focus on civic tech, a tool for calculating a nonprofit’s true costs, new definitions of membership in the digital age, the evolving public library, digital sabbaticals, and much more.

Below are my 10 favorite reads in the world of social change in May, but feel free to add to the list in the comments. And if you want a longer list, follow me on Twitter, LinkedIn, Google+, or Facebook.

You can also read 10 Great Reads lists from past months here.

  1. Perhaps some solutions to social problems lie in behavioral economics. Writing in The New York Times, economists Erez Yoeli and Syon Bhanot and psychologists Gordon Kraft-Todd and David Rand argue that the opinion of others, in this case regarding the preservation of natural resources, is a strong social change motivator.

  2. Civic tech, (the use of new technology to better engage citizens in democracy) has become quite the buzzword lately. But how do we know which civic tech solutions are actually creating change? Anne Whatley from Network Impact offers some tools for assessment in that arena.

  3. And another nonprofit tool comes from Kate Barr of the Nonprofits Assistance Fund. She provides a great tool to help nonprofits calculate and then articulate to funders the full costs of their work.

  4. Daniel Stid from the Hewlett Foundation writes a thoughtful piece on what separates good strategic planning from bad, because as he puts it “The real benefit of planning is not the final document but rather the discipline the process imposes, the new information it generates, the working relationships it fosters, and the conversations, insights, and commitments it sparks.” Amen to that!

  5. In this age of social media and technological connectedness, how do we create more formal structures for belonging to institutions? Melody Kramer, formerly of National Public Radio, is a Knight Visiting Nieman Fellow working on that very question, and she offers some beginning thoughts on the project, including, “Imagine if public radio stations functioned as Main Streets…or in the same way that local public libraries do? It would transform the way people could interact — and participate — in the local news process, and would enhance the stories stations put out on air.” Fascinating.

  6. Speaking of libraries, NPR writer Linton Weeks provides a history of the public library and how it continues to (and must) evolve in the digital age.

  7. Great philanthropic futurist Lucy Bernholz has been offline for a bit, and it turns out she took a digital sabbatical. She reports that “without the addictive stimulation and distractions of digital life it feels like my brain grew three sizes.” What a great (and necessary) idea!

  8. Writing on the UnSectored blog, Marie Mainil describes the importance of building and supporting social movements to create global social change. As she puts it “Collecting data on the dynamics of local, regional, national, and international social change campaigns is the next frontier of organizing for social change. With a visual multi-level collection of ladders of engagement from across the world, social change actors would be able to better plan and coordinate tactics and actions at scale, thereby increasing their chances of success.”

  9. In May the Center for Effective Philanthropy held their biennial conference. Ethan McCoy provides great roundups of day one and day two. I almost feel like I was there!

  10. Never one to put things lightly, William Schambra cautions against what he sees as the hubris of tech philanthropists and his fear that they desire to “fundamentally…reshape the social sector in their own image, based on their supreme faith in advanced technology.”

Photo Credit: Erin Kelly

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7 Questions To Guide Your Nonprofit Strategy

nonprofit strategyI’ve been leading several strategic planning efforts lately, and I am always amazed at the nonprofit sector’s general fear (borderline hatred) of strategic planning. I get it, strategic planning has traditionally been done so badly that many have just given up on the idea altogether. But that’s a mistake.

Without a long-term strategy for what your nonprofit is trying to accomplish and how you will marshal people and money to reach it, you are just spinning your wheels.

Rather than be a feared and misunderstood exercise, strategic planning can actually be distilled into 7 key questions. Now granted, these are really challenging questions, but they can be the impetus for some thoughtful strategic decision-making among board and staff. These 7 questions must be tackled in the following order because they build on each other.

The 7 questions are:

  1. What is Our Marketplace Map?
    As a nonprofit you will be most successful when your 1)core competencies (what you do better than anyone else) uniquely position you to address 2)a community need, apart from your 3)competitors or collaborators. So the first step in strategic planning is to map those three areas and figure out where your nonprofit lies. But because you cannot create a strategic plan in a vacuum, you need to do market research to see how future trends might impact your place in the market.
  2. What is Our Theory of Change?
    A Theory of Change is an argument for why your nonprofit exists. It helps you articulate who your target populations are and how you employ your core competencies to change outcomes for them. It is a fundamental building block to any strategic plan because if you don’t know what you are ultimately trying to accomplish and for whom, how can you possibly chart a future course?
  3. What Are Our Vision and Mission?
    These two statements are NOT feel-good rallying cries. Rather they are instrumental elements of your future direction. Your nonprofit’s Vision relates to the “Outcomes” section of your Theory of Change and describes how you want the world to be different because of your work. And the Mission relates to the “Activities” section of your Theory of Change and describes your day-to-day work to move toward that Vision. Any good strategic plan takes a hard look at the two statements and revises them as necessary.
  4. What is Our Mission and Money Mix?
    Once you’ve articulated your Theory of Change you need to analyze your current programs to understand how well each one contributes to 1) your Theory of Change, and 2) the financial viability of your organization. This allows you to understand where to grow, cut, or restructure programs to align with your strategy.
  5. What Are Our 3-Year Goals?
    Given your long-term Theory of Change, you then need to determine what 3-5 broad things (goals) you want to accomplish in the next 3-years. A strategic plan is too limited if it only charts 1-2 years out, and 4+ years is so far ahead that it’s probably meaningless. Typically those 3-5 goals break down like this: 1-3 program-related goals, 1 money goal, and 1 infrastructure (board, staff, systems) goal.
  6. How Will We Finance The Plan?
    A strategic plan is not effective without an attached financing plan because there is no action without money. So as part of the “money goal” of your strategic plan you must project how revenue and expenses (and capital investments if necessary) will flow to your nonprofit over the timeframe of the plan. This becomes your financing plan.
  7. How Will We Operationalize It?
    So many strategic plans have started out strong but withered on the vine because they had no implementation or monitoring plans attached. You have to include a way both to track the tactics necessary to achieve your goals and to monitor regularly whether the strategic plan is coming to fruition. Do not overlook this most critical (and often forgotten) piece.

There is a smart way to create nonprofit strategy. But it requires hard questions and the time and effort necessary to thoughtfully answer them.

If you’d like to learn more about the strategic planning process I take my clients through, visit the Social Velocity Strategic Planning page.

Photo Credit: pixabay

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When Should Your Nonprofit Cut Programs?

magnifyOne of the most difficult decisions a nonprofit leader faces is whether to cut a program. The program might be draining staff and offering few results to clients, but once a nonprofit launches a program it becomes almost instantly institutionalized. Even if the program eventually no longer makes strategic sense, it is almost impossible to convince board, staff and donors to end it.

But for a nonprofit to be most effective, its leaders must understand the financial and social impact of all of its programs and make strategic decisions accordingly. And the way to do that is with a Program Analysis Matrix.

Nonprofit leaders are driven by the desire to provide as many services as possible, so to shut down an established program seems so wrong. But nonprofit leaders must regularly analyze their portfolio of programs in order to understand how well each program contributes to the organization’s mission and financial sustainability.

When I assess a client’s financial model, one of the first things I employ is a Program Analysis Matrix that analyzes the social and financial impact of their entire portfolio of programs. I chart all programs and activities comparing each program’s ability to:

  1. Contribute to the social change the nonprofit is working toward (“Social Impact” on the x axis), and

  2. Add or subtract financial resources to/from the organization (“Financial Returns” on the y axis).



A Program Analysis Matrix looks like this:

Program Analysis Matrix

Each program that a nonprofit operates is placed in one of the four boxes depending on how well that program contributes to the social impact (or mission) the nonprofit is working towards and the financial sustainability of the organization. The four options are:

  1. Sustaining: the program has low social impact (it doesn’t appreciably contribute to the nonprofit’s ability to create social change), but does provide financial resources to the organization.

  2. Beneficial: the program has high social impact and provides financial resources to the organization—this is the best of both worlds.

  3. Detrimental: the program provides low social impact and drains financial resources from the organization—this is the worst of both worlds.

  4. Worthwhile: the program provides high social impact but drains financial resources.

This Program Analysis Matrix helps to surface issues that a nonprofit must address, for example when some programs are providing no benefits, or there are too many mission-related programs that don’t attract funding. Typically, a nonprofit has an abundance of “Worthwhile” programs that are integral to the mission and provide important social impact but are financially draining to the organization. In a situation like that, board and staff need to get strategic about developing programs that are “Sustaining” or “Beneficial” and provide a positive financial return.

Board and staff should work together to plot all current programs  in the matrix. Once completed, the matrix can help make the appropriate strategic decisions (labeled as “Strategy” above) about which programs to “cut,” “maintain,” “nurture,” or “expand.”

This analysis can help a nonprofit take a hard look at everything they are doing and start to make some hard decisions. A conversation about cutting programs is always incredibly difficult, but with the right data behind it, the conversation can be a logical, as opposed to emotional, one.

If you want to learn more about the Financial Model Assessment I create for clients, download the Financial Model Assessment benefit sheet here.

Photo Credit: Bart van de Biezen

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