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theory of change

Do Your Programs Contribute to Mission AND Money?

There is a tool that I think is incredibly helpful to nonprofit leaders trying to figure out where to focus their resources and how to plan for the future. Indeed it is typically one of the first activities in the strategic planning process I use with my clients.

The Program Matrix helps a nonprofit board and staff analyze their portfolio of programs to understand their overall mission and money mix.

Because those two elements — mission and money — are inextricably bound in an effective nonprofit organization. You simply cannot achieve your mission without an operation that attracts and uses money sustainably.

The Program Matrix looks like this:

And, here’s how to fill out yours.

List Your Programs
A nonprofit leader makes a list of all their mission-related programs and initiatives. But don’t include organization-building work, like pure fundraising activities, or board development. While those activities are absolutely critical to your success, they are a means to an end. For example, conducting a fundraising appeal has the goal of raising money to plow into programs. So in Program Matrix, we want to look at just the mission-related programs.

Plot Your Programs on the Matrix
Once you have that list of programs, plot each individual program on the matrix based on that program’s ability to contribute to:

  1. Social Impact: The social change outcomes you are working toward, which are found in your Theory of Change (on the x axis), and

  2. Financial Returns: The financial sustainability of the organization (on the y axis). A program that can attract enough money not only to cover its own direct and indirect costs, but also to subsidize other programs would be above the line (“positive”), whereas a program that cannot attract enough money to cover its own costs would be below the line (“negative.”)

Analyze the Results
Once you have plotted your entire portfolio of programs on the matrix, take a look at where they fall in the four boxes. These are:

  1. Worthwhile: The program significantly contributes to the nonprofit’s mission and desired outcomes, but it drains financial resources from the organization. A nonprofit will always have programs in this box, and that’s fine.

  2. Sustaining: The program doesn’t appreciably contribute to the nonprofit’s mission and desired outcomes, but it does provide a surplus of financial resources to the organization, which is great.

  3. Beneficial: The program contributes to the nonprofit’s mission and desired outcomes AND it provides excess money that can be plowed into “Worthwhile” programs — this is the best of both worlds.

  4. Detrimental: The program doesn’t contribute to the nonprofit’s mission and desired outcomes, AND it drains financial resources from the organization — this is the worst of both worlds.

Once filled out, the Program Matrix helps to surface issues that a nonprofit must address. First, any “Detrimental” programs should be significantly reconfigured, given to another organization to run, or abandoned. Second, in order to ensure financial sustainability, make sure that there are enough “Sustaining” and “Beneficial” programs to subsidize the “Worthwhile” programs. If not, you need to get strategic about developing programs that can offset the financial drain of the “Worthwhile” programs.

Repeat the Analysis Often
Once you’ve completed the Program Matrix analysis, rinse and repeat. On a regular basis (at least annually) board and staff should take a look at an updated Program Matrix and make any necessary programmatic adjustments. And any time you are thinking about adding a new program, redo the Program Matrix to include your best guess of where this new program will fall, so that you can understand its impact on the overall social impact and sustainability of your new portfolio of programs.

Armed with the power of the Program Matrix, nonprofit leaders can create a mix of programs that ensure achievement of their social change goals in a sustainable way.

Photo Credit: ParentingPatch 

 

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6 Steps to Operationalize a Nonprofit Strategic Plan

gearsOne of the biggest complaints about nonprofit strategic plans is that once created, they just sit on a shelf. A strategic plan is completely wasted effort if you neglect the final step of operationalizing it.

And by that I mean creating an annual tactical plan and monitoring process that directly tie to the larger strategy. In fact, lack of the operational part of your strategic plan is one of the 3 biggest problems with nonprofit strategic planning.

It does absolutely no good to have big goals that you want to accomplish and a larger future direction for your nonprofit’s work if you don’t have a way to connect that to your day-to-day operations.

So here are the 6 steps to do just that:

1. Create the Strategy
Start with the broad goals and objectives of your strategic plan. Typically, I recommend a nonprofit have 3-6 broad goals over a future (say 3 years or so) period. These should always tie to your longer term Theory of Change, and each goal should be broken down into the 5-10 objectives necessary to get there. And it goes without saying, but you have to create this strategy through a defined strategic planning process.

2. Create Annual Milestones
Once the board has approved those broad goals and objectives, staff needs to create a milestone table that articulates a lead person responsible (“Lead”) and a deliverable for each objective at the end of each year of the strategic plan (“Milestone”), like this:

 

milestone table

 

 

 

 

 

 

 

 

 

 

3. Create a Year One Operational Plan

Once you have that milestone table, you can pull out the milestones for the first year and develop your Year 1 operational plan (below), which lists monthly or quarterly checkpoints for each objective’s milestone for that year. This will helps you monitor (step #4 below) whether the plan is coming to fruition.

operational plan

 

 

 

 

 

 

 

 

 

 

4. Monitor Monthly at Staff Level

This operational plan should be reviewed on at least a monthly basis, where the staff comes together to analyze their checkpoints and report on what’s working, what’s not, and where they need to make adjustments.

5. Monitor Regularly at Board Level
Whether your board meets monthly, quarterly or (yikes!) less, you need to report to them on the progress of your strategic plan at every meeting. Since the board is ultimately responsible for the strategic direction of the organization, they need to understand how it is going. Using the operational plan above, you can easily highlight where: things are moving smoothly (green), things need discussion or action (yellow), and serious problems or hurdles (red) lie.

6. Adjust Accordingly
On at least an annual basis, the full board should review the organization’s Theory of Change and goals and objectives of the strategic plan to determine if any revisions (due to changes in internal and/or external circumstances) need to be made.

I believe that a huge reason for the distaste nonprofit leaders have for strategic planning comes from the poor operationalization of those plans. You simply cannot hope to execute on a strategic plan without tactics to get there.

You can learn more about what a strategic planning process looks like here.

Photo Credit: Kevin Utting

 

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The Future of the Nonprofit Sector [Slideshare]

I’m excited to be heading to Pennsylvania next month to speak at the 2016 Nonprofit Day Conference. My keynote address for the conference will be “The Future of the Nonprofit Sector.” I wanted to share an abbreviated version of the speech with you here via the Social Velocity Slideshare library.

In my mind, there are some fundamental shifts happening in the sector that will be important to watch. They include:

  • Increasing competition in the space
  • A greater demand for results and social change
  • An increased use of advocacy to achieve that change
  • A move to more “networked” approaches
  • Less “starving” nonprofits of their operational needs
  • And (of course) a move from fundraising to financing

These are interesting times, and they hold tremendous opportunity, I think, for the social change sector.

If you want to see other Social Velocity Slideshares go here. And if you want to learn more about inviting me to come speak to your group or event, check out my Speaking page.

The Future of the Nonprofit Sector from Nell Edgington

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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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Strategic and Sustainable Nonprofit Growth: A Case Study

AppleMark

I talk a lot about the many challenges of leading a nonprofit. But sometimes even success itself can be a challenge for a nonprofit. This was particularly true for one of my clients, Breakthrough Austin.

Breakthrough is a very successful nonprofit that identifies cohorts of 6th grade students who want to be the first in their families to graduate from college. The nonprofit then supports those students over the next 12 years so that they reach that goal. Over their 10+ year history, Breakthrough has achieved impressive student outcomes and the support of a deep donor base.

In fact, Breakthrough has been so successful that other schools and school districts have asked to add the Breakthrough program. But that’s not always a good thing, especially when a nonprofit doesn’t know where they can grow most sustainably and with the greatest results.

In the Spring of 2015, Breakthrough board and staff wanted to grow to reach more students, but they didn’t know how to determine when and where. They needed a strategic plan that could help them chart a growth trajectory to reach more students in a sustainable way. And baked into that strategic plan they needed strategic growth filters that helped them assess how to know if new locations were a good fit with their model and their long-term plans.

Breakthrough hired Social Velocity to lead their strategic planning effort. With my guidance, Breakthrough created an advisory committee of board, staff and key external stakeholders. I led the group to analyze the external environment in which Breakthrough operates, develop Breakthrough’s theory of change, refine their vision and mission statements, and articulate the goals and objectives and corresponding financial projections of the next 3 years for the organization.

Together we created the various elements of their strategic plan:

  • A Marketplace Map, to understand how their core competencies fit with a set of community needs, apart from their competitors and collaborators
  • A Theory of Change, to articulate the value they hope to create
  • Strategic Growth Filters, to analyze where they should grow
  • Revised Vision and Mission Statements
  • 3-Year Strategic Plan and Budget
  • Year 1 Operational Plan, to execute on the strategic plan
  • System for Monitoring the Plan, to make sure it is coming to fruition

Over the course of the 6-month planning period, Breakthrough board and staff became increasingly excited about their new strategic plan and the clarity it gives them about how and when to grow. They are already putting the pieces in place for expansion and are beginning to build the additional capacity necessary to get there.

Creating a strategic plan helped Breakthrough become crystal clear about how to grow strategically and sustainably, as Michael Griffith, Breakthrough Executive Director put it:

“Nell helped us chart a course for the future that meets the needs of our current students and allows us to expand to serve even more. She was skilled at developing a framework that allowed us to grapple with the tough questions of strategy and sustainability. We are thrilled we made this investment and look forward to the coming years with a plan firmly in place!”

If you want to learn more about the strategic planning process I take clients through, check out the Strategic Planning page, or if you want to read more client case studies, check out the Clients page.

Photo Credit: Breakthrough Austin

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How an Assessment Propels a Nonprofit Forward

nonprofitSometimes I work with nonprofits that are really stuck.

They have been spinning their wheels for months (maybe years) and can’t seem to get out of a vicious cycle that might include insufficient funding, a disengaged board of directors, struggling programs, or an inability to articulate their value to outsiders. They continue to have the same conversations month after month, wanting to do more and be more, but unable to figure out what’s holding them back.

When that is the case, a Financial Model Assessment can be really instrumental in moving the nonprofit forward.

Last week, I led the culminating meeting of a Financial Model Assessment for one of my clients. In this meeting I bring board and staff together to discuss my findings after a 3-4 month assessment of how every aspect of their nonprofit (strategy, vision and mission, board and staff structure, marketing, etc.) contributes to (or detracts from) their ability to bring sustainable money in the door.

This meeting is always my favorite part of the process because it starts to move a nonprofit forward in several ways:

Taboo Topics Are Uncovered and Discussed
Let me be clear, this is a challenging meeting. Through the course of the Assessment, I often uncover one or two things that are happening at a nonprofit that everyone knows about (and may even be discussing privately) but no one is willing or able to address as an organization. Perhaps the nonprofit is running a program that drags the organization down, or the board is not pulling their weight, or the staff is not structured effectively. In this meeting, nothing is sacred. Anything that holds the nonprofit back is fair game. It can be incredibly helpful to have someone finally put everything out in the open for the organization as a whole to discuss. Because if you don’t articulate and analyze the problems, you have no hope of overcoming them.

Board and Staff Are Energized
Once those problems are out in the open, there is often a palpable energy that begins sparking around the room as individual board and staff members begin to realize that there is a better way. It may not be easy, and it may push them and the organization in new, challenging ways, but it is exciting and hopeful and energizing. Every single time I have led one of these Assessment meetings a noticeable energy beings to build. It’s the acknowledgement among board and staff that they don’t have to be stuck anymore.

A Clear Path Emerges
And the reason they don’t have to be stuck anymore is because the Assessment lays out a path forward that frees the nonprofit from the spinning wheels. Suddenly board and staff have a set of steps and a strategy that they can discuss, analyze, and execute. They may not agree with or integrate every recommendation I make, but they at least have a future path around which they can mobilize.

Change Begins
This meeting, and the Financial Model Assessment that instigates it, can often be the first step in a new direction. It can be the inflection point at which board and staff finally recognize together, as a critical mass, that the status quo just won’t work anymore, and they must come together to chart a smarter, more strategic future course. It is the place where everyone acknowledges that change — true change — is necessary and possible.

If you want to learn more about the Financial Model Assessment I conduct for nonprofits, check out the Financial Model Assessment page here, or download the benefit sheet here.

Photo Credit: Till Krech

 

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