Tag Archives: Benchmarks

The Hard Spade Work of Strategic Planning

[Fifth in a series.]

In May, I reported that the strategic planning process I was facilitating for a small local nonprofit was right on track. After engaging the Board in identifying three possible directions, following a discussion of the environment and potential outcomes, the time came to dig in.

As Patrick Bell, who teaches the Non Profit Resource Center’s “Board Leadership: The Essentials” workshop tells Board members, a Board should provide input for long-range goals and the strategic plan and forge a strong partnership with staff in leading the organization.

That “strong partnership” has to respect the fact that the nonprofit’s leader is the one in day-to-day contact with clients and constituents. Staff should be in the best position to understand the operational challenges of potential directions. And, of course, they are going to be the ones held accountable for achieving the desired results.

This summer, I’ve been helping the staff of a small nonprofit explore three potential directions. By the end of August, we hope to be in a position to cue up the options so that the executive director can choose the best course, and prepare to recommend a five-year strategy.

Here’s a peek at the streams of work that have been underway:

  • Deep diving into outcomes: According to some studies, organizations that commit to outcomes* and evaluate them actually perform better than organizations with a looser sense of impact. Most nonprofits (especially those that operate in the sector that this one does) do not have true outcome goals. They measure output (for example, clients served), but not outcome. The “deep dive” has included interviewing several well-run local nonprofits, investigating the literature about outcomes related to this sector, meeting with a top national academician on the topic, surveying 20 nonprofits in the same sector in similar-sized communities, and collecting feedback from existing clients. The survey of 20 nonprofits (based on public sources) turned up a fourth direction that is now being considered.
  • Investigating targets: Successful for profit companies recognize that they have to be as good as competitors, or their lunch will be eaten. Nonprofits compete, too. They compete to be deserving of funders’ and donors’ confidence. They would benefit from knowing how their “competitive set” is performing with respect to indicators like administrative efficiency and contribution to overhead (total revenues minus total expenses, divided by total revenues). My hope is that this nonprofit will not only land on a couple of indicators that will help them to assess how they are doing, but set specific targets for where they need to be as part of the metrics related to strategic plan progress. A nonprofit, for example, can’t break even. It must be “profitable” enough to fund basics like IT infrastructure (increasingly expensive and critical) and program development. An emerging (but still debated) measure for nonprofits is the amount of funds contributed by social enterprise; McKinsey’s capability model (see link in next paragraph) assumes that nonprofits should develop sources of revenue beyond grants and donations. The survey of 20 organizations revealed a net “profit” ranging from -10% to over 10%, so it’s going to be interesting to figure out the right target for this organization! (One approach would be to decide which organization they most want to be like “when they grow up.”)
  • Assessing capability: We identified several helpful tools to help the organization assess its strength across every aspect of its management, from the Board through operations through communications and fundraising. Here are a couple of resources worth checking out: McKinsey’s tool adapted from its extensive work in the commercial sector, and United Way of Minneapolis’ tool posted on managementhelp.org.
  • Qualitative research into the possible directions: We’ve been out talking to nonprofits serving related clients as well as holding focus groups with people facing the kinds of problems that we hope to alleviate. There is no substitute for going straight to the horses’ mouths, and there have been some surprising insights that have come from this work.

Along the way, our understanding of the external environment has greatly expanded, insights that we’re weaving into the partially completed strategic plan document. When we’re done, the executive director should be in a position to put in front of the Board a well-researched recommendation and plan that answers the questions:

  • Where are we now?
  • What are we trying to do?
  • What will have to change?
  • How will we get there?
  • What do we expect to happen when we get there?
  • What are the risks and how can we mitigate them?

McKinsey, in a recent article entitled “How Strategists Lead,” did a great job of describing what we’re trying to build: “A great strategy, in short, is not a dream or a lofty idea, but rather the bridge between the economics of a market, the ideas at the core of a business, and action. To be sound, that bridge must rest on a foundation of clarity and realism, and it also needs a real operating sensibility.”

* Outcomes are defined as, “Socially meaningful changes for those served by a program, generally defined in terms of expected changes in knowledge, skills, attitudes, behavior, condition, or status. These changes should be measured, be monitored as part of an organization’s work, link directly to the efforts of the program, and serve as the basis for accountability.” — adapted from the Glossary of Terms of the Shaping Outcomes Initiative of the Institute of Museum and Library Services, Indiana University and Purdue University Indianapolis; The Nonprofit outcomes Toolbox: A Complete Guide to Program Effectiveness, Performance Measurement, and Results by Robert Penna; and the Framework for Managing Programme Performance Information of the South African government. As published in “Leap of Reason: Managing to Outcomes in an Era of Scarcity, Venture Philanthropy Partners

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What’s a good level of growth in Facebook fans?

Key (read from the bottom up on the chart)

1 – Loaves and Fishes; 2 – Susan G. Komen; 3 – WEAVE; 4 – American Red Cross; 5 – Volunteers of America; 6 – Salvation Army; 7 – River City Food Bank; 8 – St. John’s Shelter

Benchmarks have really been on my mind this week, including reporting the median number of unique website visitors for small-to-medium sized nonprofits from a recent study.  Today I’m thinking about Facebook benchmarks.  A little over a year ago, someone asked me, “So what’s a good number of Facebook fans for a local nonprofit?”  I blogged about my unscientific survey in a post here.

The organizations I chose to examine then were suggested by United Way’s Steve Heath as larger, active nonprofits.  I noted that the two with the largest fan bases had big initiatives underway: the Crocker was working on its big expansion, and Loaves & Fishes had undertaken a big capital campaign.

This week, I took a look at the same nonprofits to help get at the question, “So what’s healthy growth for Facebook fans?”  NTEN’s 2011 Nonprofit Social Network Benchmark Report found that the average fan base grew 161% between 2009 and 2010.  Although the study was based on information provided by more than 11,000 nonprofit professionals representing organizations of various sizes, the findings weren’t broken out by organization size, so it’s of limited use to our small, local nonprofits here in Sacramento.  I did find it interesting that 89% of nonprofits in the study reported they have a presence on Facebook.

In the chart above, I excluded the Crocker because they are so far above the norm and put a ton of resources into promoting their new expansion and opening.  They grew from a fan base of 4,561 in March 2010 to 9,952.  Yay, Crocker!  (I also want to acknowledge that the decline in Facebook fans I report above for the American Red Cross makes me wonder if they had a different page name/type a year ago.)  So, some data observations:

  • Four organizations had fewer than 500 fans 15 months ago.  Their growth ranged from 122%-347%.
  • Three organizations had between 500 and 1,000 fans.  Excluding American Red Cross, their growth was 117% for Susan G. Komen and 169% for WEAVE.
  • Loaves & Fishes and the Crocker, our stars a year ago, are still growing.  They grew 78% and 118%, respectively.
  • The organization with the fastest growth was St. John’s Shelter, with that whopping 347% growth.  Go, St. John’s!

I noted a year ago that there was little apparent relationship between the number of posts per week and the size of the fan base.  I still think that’s true based on some other sleuthing I’ve been doing.  Based on my reports earlier this week about the importance of content in generating engagement, and the value of timing, I’ve begun investigating the value of links to/from partners and other organizations, which show up on a fan page as the organization’s “likes”.  I’m also looking at the relationship between the number of photos and videos posted and fan engagement, and the relative prominence of the Facebook badge or “like” button on the organization’s website.

I used to work with a crusty former reporter who always looked for the “so what” in a news release.  “If that’s so, she said, then so what?”

The “so what” for me, in this case, is that local nonprofits — for the time being — should strive for at least 5-6% growth per month in new fans.  Shoot for 10% growth per month and you’ll be in the neighborhood of 185-200%* growth over the course of a year.   That would be aggressive, and if it were me, I wouldn’t commit to it unless I knew that there would be promotional dollars and resources to support a campaign.  It won’t happen by just posting away on Facebook.  (*I refused to pull out my Texas Instruments calculator to look at compounded growth, but my chicken scratchings should be close enough for targeting.)

At some point, the market for Facebook “fanage” may diminish, and it won’t be realistic to target growth in the 100%+ range, but for now, adoption still seems to be growing.  Local nonprofits should also be cautioned against simply adopting a growth target.  Benchmarks for should be chosen in the context of the average fan base of successful peer/similar organizations or industry-wide averages.

You should also keep in mind your end game with Facebook presence.  Besides the number of fans, active fans, new fans, etc., you should be tracking the number of Facebook referrals to your organization website through a tool like Google Analytics.  You want people engaged for a reason:  volunteer, donate, etc.  Your website is your involvement center.  (Google Analytics is free and makes it very easy to examine how visitors got to your site.  People who looked for you directly through your URL, and organic search through Google, will likely be the top two sources, but after that you should look for Facebook referral traffic… it may be down in the data details a waze.)

As a side note, Twitter adoption by nonprofits seems to have leveled off at about 60% according to the NTEN benchmarking study.  I don’t know if that’s a reflection of Twitter fatigue, or just that the consensus seems to be that there is better return from Facebook resource investments.

 

 

 

 

 

 

 

 

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Benchmarks to help you assess holiday fundraising progress

A few weeks back, I shared a story about a meeting in which the accountable manager said that he would know if his current campaign was working once the final results were all in.  In other words, when the organization would have no ability to influence the outcome.

My last six posts were inspired by that incident:  first, a post about the importance of early warning indicators (also called leading indicators), and a five part series about easily-implemented tactics because it’s not too late to influence the outcome of a holiday fundraising campaign.  (Here’s a link to the first post, if you’re getting this by email.)

Besides evaluating progress against your own week-by-week 2008 results, here are some benchmarks that may help you to evaluate how well your holiday campaign is going – so you can decide whether or not to turn up the heat.  Remember my focus is always on small, local non-profits.  I’m drawing here on the M+R Strategic Services/NTEN report, “2009 eNonprofit Benchmarks Study” (available free online), and my own anecdotal experience from working with several non-profits as a pro bono consultant here in Sacramento:

  • Email frequency:  According to the M+R report, organizations send 3.5 emails per month on average.  My own experience is that most small, local nonprofits assume they shouldn’t send more than one or two emails per month.  Yes, a few more people unsubscribe over the holidays, but there’s good evidence that non-profits will net more contributions by increasing email frequency some.  For email tips, read that first not-too-late post.
  • Email open rates:  Open rates have been dropping over the past three years, according to M+R.  In 2008, the open rate for local nonprofit’s emails was 20%.  This number includes a wide variety of email content types:  appeals, advocacy and news.  Nationally, open rates are lower for fundraising appeals:  only 14%.   M+R points out that open rates are understated, “…open rates are a notoriously unreliable metric… because the technology that allows us to measure an ‘open’ is affected by factors — spam filters, preview panes, image-blocking — that have little to do with whether someone is actually opening (or reading) an email.”  Here in Sacramento, one organization that has been sending e-newsletters for over a year had an open rate of 23.8% on its last email.  Another, sending its first email, had an open rate of 21.1%.  Neither subject line was as compelling as it could have been, and we are hopeful to increase open rates for the next emailings.  The drop in email open rates over the past three years does not mean this tactic has run its course or is not worth the return; to the contrary, response rates are often higher and more immediate than snail mail appeals, not to mention the lower cost of the tactic.  And P.S., don’t panic.  Email open rates typically decline a little in December.   That may well be because the average number of email messages increased from 3.5 for the year to 5.5 in December, according to M+R’s 2008 data, possibly saturating some constituents.
  • Click throughs: Click through rates have also been dropping, down to 2.4% according to the M+R metric.  Click  throughs to local nonprofits were a little higher, 4.7% in 2008.  But here’s where my experience is far different.  For the two organizations I mentioned above, the click through rates – that is, the percentage of people who followed a link to the home website or another website linked in the email – was a whopping 22.6% in one case and 19.6% in the other.  So there’s another argument for email:  links make it easy for people to investigate something further on the website and increase engagement, immediately.
  • Email fundraising response rates: For local organizations, the national M+R benchmark is 0.09%.  Roughly speaking, if a small non-profit sends a email asking for donations to 1,000 constituents, and 10 people give a gift, it’s hit the national benchmark.  If no one gives, you should do some thinking about why.  But remember, this response rate is for emails with a clear “give money” kind of subject line and content.

The Oxfam case study on page 26 of the free downloadable M+R report is worth the read, and a good not-to-late nudge.

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