Sacramento Gave BIG!

I was so excited when Sacramento put its toes in the water last year with its first online giving blitz, Arts Day of Giving, catching the wave of national enthusiasm for this viral approach to inspire charitable giving. But (to stick with the beach metaphor) I was blown away by the tsunami of support.

The headline: Sacramento raised over $3 million — $3,020,000 to be exact — from 18,915 donors, benefiting 394 local nonprofits.

One of the striking findings from this region-wide philanthropic event was the diversity of the nonprofits that were attracting donations. In late morning, I tweeted that @PlacerLandTrust, @TFTGreaterSac (The First Tee of Greater Sacramento), and @YMCASuperiorCa were all rocking it.

According to the Giving USA 2013 report, food banks and human services grew disproportionately during the Great Recession, but donors began to return to their historical preferences in 2013: education, arts, environmental and animal nonprofits. (Religious organizations continued to rank number one in donations, receiving 32% of all giving.)

Look what categories “won” in Sacramento (based on a cursory review of nonprofits receiving over $20,000): public media, animals, arts, human services, health (a yoga collective), land/environment (including the Sacramento Tree Foundation), libraries, programs serving low-income kids, the LGBT community (yay Sacramento LGBT Community Center!), legal assistance programs, housing, adoption programs, and a museum (The California Museum).

In terms of dollars raised, the biggest winners were:

• Sacramento Ballet — $91,776 from 334 donors
• Placer: Placer Land Trust — $54,896 from 246 donors
• Yolo: Winters Friends of the Library — $20,799 from 184 donors

But it was clear from the leaderboard throughout the day that lots of nonprofits — big and small — were “winning” in terms of energizing their base and achieving their goals.

• Effie Yeaw Nature Center, for example, had a timid goal of $2,500. They raised $12,200 from 136 donors. I bet they’re in shock!
• River City Food Bank set a goal of raising $10,000. They surpassed that even before the lunchtime challenge, one of two challenge prize periods that they encouraged existing friends to support. Now it was my turn to be timid. I tweeted, “@RCFoodBank, “Time to set a new goal! $12,500 is in reach.” At that moment, their tweet came through setting $20,000 as their new goal, along with this explanation of their thinking to me, “Go big or go home!” They finished the 24 hours with $25,460 from 162 donors.
• I thought the California Food Literacy Center was overly ambitious in its out-of-the-chute goal to raise $10,000, but they, too, surpassed their goal by mid-day and set a new $20,000 target. They expressed their joy with brand-centric posts that were so cute they made your cheeks hurt: “We can’t wait to give you thanks with a double pea pod cartwheel!” They ended with $18,145 from 99 donors. This, for a nonprofit that’s only been around two years, has California in its title and isn’t obviously dedicated to kids (although childhood nutrition is its primary programmatic focus).

As I watched the action on the leaderboard and my Twitter feed, this question burned in my mind: How were some of these nonprofits succeeding? What was their tactical strategy?

Clearly, some nonprofits had donors in the wings, ready to snap up those matching funds when the day began (at 12:01 a.m.!). At 11 a.m., Placer Land Trust already had $30,646 in the kitty. I suspect the same was true of a few others who had a fast start to the day, raising more than $20,000 by 11 a.m. before leveling off: Cottage Housing, YMCA of Superior California, St. John’s Shelter, and The First Tee of Greater Sacramento. I’m pretty sure that Social Venture Partners of Sacramento also encouraged its shareholder partners to take advantage of this opportunity to leverage their support for its portfolio of nonprofits (clue: they only had 17 donors).

Watching the numbers jump during the 12-1 hour, it became obvious that some nonprofits had encouraged their supporters to donate during certain challenge periods. Capital Public Radio and Sacramento Ballet were among those I noticed had big jumps during this period. I plan to ask both whether they nudged their fan base, or it just fell out that way.

In the days ahead, I’ll connect with a few nonprofits — hopefully Sacramento Ballet and the DCI Sacramento Mandarins (an expected star and an underdog, both of which were big rainmakers) — to see if I can get some insights into their position going in and their tactical strategies. I know many nonprofits made good use of pop up windows on their websites, mailed materials, emails and social media, but what worked best for which kinds of charities and fan bases?

I’m also curious about which charities didn’t do as well as I expected. With the exception of the Mandarins, a drum and bugle corp, where were the music nonprofits? I would have expected WEAVE to have a little stronger total, so I’m curious if they didn’t push the BIG Day of Giving. Same with Sacramento Habitat for Humanity, WIND Youth Services and Big Brothers Big Sisters of the Greater Sacramento area. Hospice and disease-related organizations (such as the Leukemia and Lymphoma Society) typically have pretty loyal bases, so I wonder why they didn’t generate much interest.

When I think about it a bit more, I realize this is such an unknown beast for nonprofits. Strategically, they may wonder if this will cannibalize their existing base of support or if they’ll lose control of it by having it go through the Give Local Now online donation system. Or they may not know how to organize an integrated communications plan — and staff it — so that they can succeed.

For those who did succeed, how much did they have to invest in staff time or out-of-pocket costs (e.g. for a mailing)? How did they feel about the ROI? They may not know until they see how many new donors they attracted, or how many lapsed donors they woke up.

As the then-director of Give Local Now told me last year, online giving events were part of a strategy “to increase the regional average of households that give to charities; increase the average household contribution of households that give; and increase the share of giving that stays here in the area versus benefiting national or international charities.” She went on to say, “If information about the cool things that are happening here were more broadly known, there would be a greater sense of pride in philanthropy.”

Sacramento certainly has reason to feel proud this morning. I’d say Give BIG got the word out!

 

Don’t Let Moss Grow on Your Nonprofit Website

There’s no such thing as being “done” with your website. You can’t check it off your list. If your nonprofit is like most nonprofits, it’s been at least a couple of years since you updated or revamped your website.

But it’s been over three years since Microsoft brought its distinctive tile navigation to smart phones, and already four months since Apple transformed the look of its home screen with ios7. Out went “start” buttons and busy black backgrounds. Things got leaner and cleaner.

Website conventions change and not just to present a fresh aesthetic. They’re designed to make the user experience easier (although many of us don’t appreciate it, at least initially, when we have to think twice about what we’re doing).

An effective website is still a nonprofit’s most effective communications tool. As software advances have put user-friendly tools and templates within the financial and technical reach of all nonprofits, there’s no longer a good excuse to let a website grow moss.

That said, just slapping content into a template does not make for an effective website. It takes answering questions like the following:

1) Who is the website for? And who is it MOST for? (many organizations have volunteers or members and have to weigh whether the website is being used to attract new supporters, or meet the needs of existing constituents)

2) What are the organization’s top three goals that a website can help support?

3) What are the top three actions that we want our top priority audience members to perform easily?

4) What is the most frequently viewed content on the current website that should continue to be easily within reach?

5) What must the website communicate about us through its look and feel, its imagery and tone, to support our brand?

Most nonprofit executive directors or fundraising professionals don’t have a lot of experience with website designs. It’s hard to know where to begin.

Fortunately, Idealware (itself a nonprofit) has just begun a five-part series of webinars called “From Audit to Redesign: the Complete Nonprofit Website Kit.” I think the content is bang-on, and the price tag ($200) should more than pay for itself when you consider what a well-designed website can do for an organization. The first session, “Starting the Audit Process,” was held January 28 but it’s not too late to jump on this moving train. Upcoming on February 11 is “Defining Your Design and Content Strategy.” The third session on February 28 should be a great introduction to the “nitty gritty” of web design and cover best practices for usability and accessibility. The last two sessions get into content management systems (the tool that lets non-technical people easily update content), search engine optimization (so people find you), integration with tools like online donation systems, and an overview of a website development process.

As a former Northwesterner, I love moss. But not on websites. Get moving!

Three Fresh New Year Tips for Nonprofits

What nonprofits do in these first ten days of the year will leave a lasting taste in the mouths of their supporters. Will it be the feeling of a warm hot toddy on a cool winter’s eve? Or a sip of eggnog that’s been in the fridge a week too long?

Here are three tips — two things you should do plus one idea that might intrigue your supporters, a best practice gleaned from the news publishing industry.

1.  Say thank you, and do so in a way that reflects your brand. By now most nonprofits know they have a brand image, whether they choose to manage it or not. In the midst of the charitable gift acknowledgement letters that are fluttering in was this little gem, a handwritten note from Betty Cooper, development director of the American River Natural History Association, and artwork created by one of ARNHA’s little clients (click images to see full size):

Is it practical for every nonprofit to send out a handwritten note? Of course not. The point is that it is important to capture the feeling of the nonprofit’s mission. Run the organization like the responsible business that it is, but for heaven’s sake don’t sound like an accountant. (Sorry, accountants.)

2.  Remind supporters what THEY accomplished by getting behind the nonprofit’s mission. I gave small amounts to over 20 nonprofits this year (due partly to journalistic curiosity about events like #ArtsDayofGiving) and I subscribe to probably a dozen nonprofit newsletters. I received TWO emails with subject lines that congratulated supporters. My favorite was an email from No Kid Hungry with the subject line, “Look what you helped do in 2013.” I don’t actually donate to No Kid Hungry — I prefer to support local food banks and closets like River City Food Bank — but I thought this was a brilliant piece, complete with video. Listen to the music. It’s anthemic. Listen to the words. They’re hopeful. You end up singing along, “We could do this all night!”

A more basic but still effective approach was taken by Appleseed, a nonprofit network of public justice centers. The subject line of its January 3 email was, “Looking back, looking ahead.” Betsy Cavendish, the president, wrote:

As we start a new year, Appleseed joins millions of Americans in reflecting on the past year and thinking about our potential for 2014. Before I get into that, I first want to thank all our supporters. As you may know, four Appleseed board members offered a $20,000 challenge grant in the waning days of 2013, matching each dollar we raised. I am delighted to report that donors rose to their challenge! 

And now for the look back. My law school classmate Ken Stern wrote a powerful critique of the nonprofit sector last year, taking to task nonprofit organizations whose programs don’t work effectively. I’m glad to say that, as broad as Appleseed’s mission is, we are effective at what we’re doing. We’re not content to simply identify a problem and call it a day: we translate our research into lasting solutions. Here are some of those recent successes from the Appleseed network…

3.  Look ahead. As soon as newspapers and magazines have finished their year-in-review and their best-pictures-of-2013, they’re off to the races hooking readers for the year ahead. City Arts, an arts magazine based in the Pacific Northwest, promoted its January issue with “The Future List: 12 Artists and Innovators Who Will Define 2014.” Why not a list of ideas for solutions, or program improvements, or hopes for 2014? As we start the new year, that’s what we all want, isn’t it? Hope that things will get better? A plan for change that we can support?

TEDx Talks, Deconstructed for Nonprofits

As mentioned in my last blog post, nonprofits could learn a few things from the way TED and TEDx approach presenting to live audiences. I asked Carlos Montoya, who led speaker development for the 2013 Sacramento event, to describe how TEDx manages to produce such moving presentations, and to provide tips for nonprofits.

1.  As nonprofits consider who tells their story, have you found that there are certain characteristics of people who can make good speakers? Are good speakers made or born?

TEDx talks have a format that is different from what most speakers are used to. Those speakers who are the most successful often share a willingness to learn, explore, and engage in the TEDx format. With regards to whether a speaker is made or born, I have to say it could be either. There are some speakers who are natural on stage and others who are not but are so passionate about their idea that with a little practice they can deliver just as well.

2.  What’s the first step when you begin working with a speaker? They have an idea, you know what format works best for TedX. Then what?

The first step usually starts a little earlier and consists of an initiation email that includes a lot of information such as TED guidelines and process timeline. In this email we request that the speaker send us a one page treatment or outline of their idea. With treatment in hand, an initial conversation is scheduled.

The initial conversation varies and depends on how detailed the treatment is at this point in the process. However, here are three things that I generally try and accomplish during that conversation:

·         Ask the speaker to run through their idea and what they have so far.

·         Listen to every word and try to get a sense of the speaker’s natural delivery style and the structure of their key points from the perspective of an audience.

·         Ask a few questions and provide some speaker specific feedback.

3.  What’s the rest of the process look like, between that initial meeting and standing up in front of TedX?

Many more conversations like the one described above working toward refining the key message and pairing that message with other elements such slides, props, video, or performance. Two weeks prior to the event we request the near final presentation and schedule 2 or 3 rehearsals with the entire TEDx speaker team to provide additional feedback. The day before the event we hold an in-person dress rehearsal at the venue.

4.  (If one comes to mind) What’s the most powerful talk you’ve ever heard given by a nonprofit at TedX? What made it so compelling?

This is an interesting question. A specific talk from a nonprofit doesn’t come to mind immediately. But there is a reason for that, a TEDx talk according to the guidelines should not have a commercial agenda.

“Speakers should not promote their own products, books, or businesses or those of a company which employs them. The only exception is where they have specifically been invited to give a powerful product demo, or to describe the ideas in their book, and here the focus should still be on the technology and/or the ideas.” – TED.com

That said, Ron Finley, Salman Khan, Bill Gates, and Mark Roth have each delivered great TED talks, Melinda Gates delivered a TEDx talk that shares some key lessons for nonprofits. At last year’s TEDx Sacramento, Chris Ategeka delivered a talk that ended in a standing ovation. In my opinion, the power comes not just from the idea but from the story behind the idea that resonates with our own experiences.

5. You’ve probably heard some pitches or presentations by nonprofits. What do you think nonprofits do wrong, or could do better?

The few pitches or presentations by nonprofits that I have heard usually do a great job at presenting information. However, in today’s world, with the abundance of information available at our fingertips, information has become somewhat disposable so we have to look at new ways at extracting meaning from information and make it accessible. I think this is one of the strengths of TEDx talks because the story is as important as the idea. The story is what connects us to the idea and drives the audience to action.

6.  You appear to have some guidelines, like using slides, but emphasizing a limited number and using images intensively rather than words. Throwing in a few humorous lines, etc. What are the guidelines you’ve found work best to grab and inspire an audience.

There are speaker guidelines developed by TED that are sent to each speaker that discusses the format and what has worked best at TED. Here locally, we have found that shorter talks work better. We often work with speakers to cut each talk down to 10 minutes, to focus both the speaker and the talk.  Another guideline is to have the delivery be more conversational rather than a presentation. We also recommend that if using slides that the slide present only one piece of information and not detract the audience from the speaker. Beyond these guidelines, I often borrow from various storytelling devices that I think could enhance the speaker’s ability to share their idea.

7.  So what do you want to do before you die (per the blackboard in the park)?

For me at this point, the list is still too long but one thing would be to climb Mount Kilimanjaro and reach the summit on a clear day.

Now THAT’S Followup – Thanks Figgy Pudding!

In December, just before my father’s health fell apart, I was visiting Seattle and managed to be there for Figgy Pudding, a big caroling contest that benefits a local charity.

Each caroling team has a hashtag. When you vote by text using the hashtag to identify your favorite, it generates $5 for the Pike Market Senior Center.

I just received this text:

“Your gift to Figgy Pudding 2012: already provided 23,445 meals at Pike Market Senior Center this year. Thank YOU!! Save the date: Figgy 2013 is Fri, Dec. 6.”

#ArtsDayofGiving folks and local Sacramento charities, take note!

If you’re in Seattle the first weekend of December next year, GO! It’s a blast.

What’s “Good” Nonprofit Facebook Growth?

Being liked on Facebook isn’t enough, but it’s not a bad place to start. Facebook continues to be an important channel for building engagement with community members, volunteers, donors and potential donors.

In March 2010 I started tracking a sampling of Sacramento nonprofits to understand something about the growth of Facebook. By “sampling,” I do not mean that I constructed a representative sample; let’s say I taste-tested them to get a sense of average performance and growth. Though there were baseline numbers out there in the blogosphere, they were generally for big, national organizations. I wanted to know what a local nonprofit should be striving to achieve.

I’ve now got 33* organizations in my sights including a few that I added in this round and a few that I exclude from analysis as outliers.

Here are the highlights from an analysis of 24 local nonprofits:

• In 2010 (when I was tracking a much smaller comparison group), the average number of likes was around 500. The average is now 973.
• I was surprised by the continuing growth between June 3, 2012 and June 3, 2013. As the denominator gets bigger, it gets harder to achieve impressive growth. That’s just math. I was also concerned that Facebook’s changes have made it harder for nonprofits’ content to be seen as widely. Among the 24 nonprofits who had at least 500 likes last year, growth ranged from a low of 11% (People Reaching Out) to a high of 63% (United Way California Capital Region).
• In the group with 500-1,000 likes last year, growth averaged 34%. (United Way fell in this group, with 501 likes as of 6/3/12 and 815 as of 6/2/13).
• In the group with 1,000+ likes last year, growth averaged 39%. The “winner” in this larger category was Effie Yeaw Nature Center, which grew from 1,125 likes a year ago to 1,763 today. The growth of this larger category impressed me. It suggested that whatever “machine” they ginned up to get to the 1,000 mark is still accelerating.

What about the outliers?

I don’t know what’s going on with Stanford Youth Solutions (formerly Stanford Children’s Home). They started their Facebook page in 2011 and had 393 likes this time last year. Now they have 70. They’ve redone their website but their social link (singular) is buried (unobtrusively displayed on the right several screen swipes down).

Susan G. Komen, which experienced a dramatic drop in racer participants, has also had a huge loss in Facebook friends, dropping from 9,815 in 2012 to 6,948 today, a 29% drop.

I also exclude the Crocker Art Museum because of their size. But they should be feeling great about continuing growth, from 13,860 a year ago to 18,194 today, 31% growth!

How’d they do that?

Facebook doesn’t have to be a part of a nonprofit’s marketing strategy, but I’d be hard pressed to come up with a circumstance when it doesn’t belong in it.

One of the obvious differences between organizations that grew rapidly and those that didn’t is the placement of Facebook on their website page. I suspect that also carries over to other communications – printed materials, emails, etc.

For every rule, however, there’s an exception. Effie Yeaw is obviously doing a great job of promoting their Facebook page, but not on their website. If the link is there, I couldn’t find it!

I’ll do some more sleuthing to see if I can ferret out winning approaches in content as a driver of Facebook growth.

*The organizations I track – all local affiliates:

United Way, American Red Cross, Boys and Girls Clubs, Child Abuse Prevention Center, Children’s Receiving Home, Crocker Art Museum, Diogenes Youth Center, Effie Yeaw, Foodlink, Francis House, Give Local Now, Goodwill, Hands On Sacramento, Junior Achievement, Lilliput, Loaves and Fishes, Make a Wish, People Reaching Out, PRIDE Industries, River City Food Bank, Sacramento Children’s Home, Sacramento Steps Forward, Sacramento Tree Foundation, Sierra Forever Families, Salvation Army, Susan G. Komen, Stanford Youth Solutions, St. John’s Shelter, Volunteers of America, WEAVE, WIND Youth Services, Women’s Empowerment, The Y of Sacramento

#ArtsDayofGiving: The Learning Continues

How often are you thrilled to receive an online survey? I was yesterday when I received an email invitation to complete an online survey for Arts Day of Giving donors.

What did inquiring minds want to know? Besides the usual demographics, satisfaction, and “how you heard about” questions, the survey should be helpful in answering some of the questions about cannibalization – specifically whether the event brought in existing donors, or new donors.

After asking donors how many nonprofits they supported, it gave donors the opportunity to identify whether the nonprofit(s) they supported were those they:

• Already support
• Supported in the past
• Were aware of but never supported before
• Never supported before but learned about through the event, or
• All of the above

It also probed the importance of the match in spurring action, and whether participants helped a nonprofit to pursue and/or win a challenge prize.

Other follow-up notes

I received a mailer from Museum of Glass promoting Seattle/Tacoma’s #GiveBig event… which unfortunately came about a week after the fact (it also promoted their annual membership drive – I’ve been a member). It did answer my question about whether some nonprofits mailed promotional materials out to existing supporters; at least in Seattle/Tacoma, they did.

I’ve also been paying attention to which of the 7 organizations I supported through #ArtsDayofGiving sent some kind of follow-up thank you. As mentioned in a previous post, Capital Public Radio’s Arla Gibson was right on it with a personalized thank you email as was Fairytale Town’s Kathy Fleming.

I also received snail mail thank you letters from Fairytale Town, the Crocker Art Museum and the Davis Art Center. Which means – unless I missed it – that I didn’t receive an acknowledgement from three organizations. I was a past (but not current) donor to two, and a new donor to the third.

So here’s a tickler for the organizers of the May 2014. KEEP tracking what happens with new (or resurfaced) donors, and how nonprofits communicate with them, even if just with a few “beta” nonprofits who agree to provide information… my theory is that the organizations who pay attention to new donors will convert more of them to repeat givers.

Three out of seven nonprofits I gave to fell down on the job.

How Should a Nonprofit Board Track Progress?

Since what you report and manage can lead to better performance – and better implementation of a nonprofit’s mission – I’m a fan of periodic housecleaning of Board reports.

Habit creeps up on all of us. In the case of nonprofits, a Board president may ask to see certain reports as part of the Board meeting packet. Time goes by, and another Board president asks for additional information to be reported. Pretty soon, the executive director’s email has six or seven attachments – the things that he or she is used to reporting plus the other wiggly bits that have been added.

What the Board tracks is vital to a nonprofit’s ultimate success – if for no other reason than it educates the Board as to what is most critical to organizational performance.

A nonprofit that decides it’s time for a Board report house-cleaning should consider these questions:

1) What are the best indicators that the nonprofit is on solid footing and making progress on its goals and/or strategic plan?

2) What’s Board level information?

3) What’s it look like? What’s the best way to focus the Board’s attention by appropriately formatting the report or reports?

I’m actually going to address my three questions in reverse order.

What’s it look like

One of the most helpful tools for organizational effectiveness is a Dashboard Indicators report. The term derived from car instrumentation; we rely on our speedometer, gas gauge, etc., to tell us how things are going when we’re driving, right? Dashboard indicators for organizations point us to the information that tells us if something is wrong (or right).

Much of Corporate America has been using some form of a Dashboard Indicators (trademarked name Balanced Scorecard) since Robert Kaplan and David Norton popularized the idea in the early 90s. Although originally developed as a tool for management, many corporate Boards receive and review quarterly versions of these reports.

Below is an example of a county government’s scorecard. Notice that they figured out the  indicators that they believe to be most important. Then they color-coded the indicators as to whether they were on target (green), at risk (yellow) or below target (red).

Is this a Board-level report? No. The Board needs something more streamlined that speaks to its role and responsibility.

What’s Board level information?

Higher level information, for one thing. Boards shouldn’t see all of the information that management does. It would not only be crazy-making for the Board members but tempt them to step in and manage rather than govern. They should protect the public interest by ensuring that the organization is using its nonprofit resources appropriately and in a way that sustains the mission, identifying risks to the organization’s mission and stability, approving the strategy and evaluating the nonprofit’s work. Not focusing on things like why a mailing cost $1,100 instead of $1,000.

So what are the best indicators?

Kaplan and Norton’s approach used categories to focus attention not just on financials, but the measurable processes and activities that are required to deliver on the customer value proposition. For example, without a reliable and prepared supply of volunteers, many nonprofits couldn’t deliver their programs, so it’s critical to keep an eye on volunteer resources.

Typically dashboard indicators include four categories: financial, customers, operational business processes, and learning and growth (I tend to call this last one “organizational capacity”). Financial is pretty self explanatory. Operational business processes include things the organization must be really good at to deliver its programs while “customers” takes a little bit broader view of the value proposition and includes management of the brand. (Many businesses end up combining these in some fashion because of overlap, or just assigning some indicators to one bucket or another.)  Organizational capacity indicators include the activities that are critical to the organization’s continuity of internal management; it includes indicators or activities related to the technology platform, for example.

I don’t think the buckets are that critical, but they can help nudge management and the Board that there’s more to protecting the mission than the money. A whole system of moving parts – from internal capacities to operations – drives financial performance.

How does that translate to a nonprofit? It depends on the nonprofit and its funding model. An organization that receives government funding to provide a service will have a very different dashboard than one that provides compassionate relief services and is funded largely by individual donations.

I don’t want to complete wimp out on you and not offer some specifics, so here are 10 Board-level indicators that are important to many nonprofits:

1) Reserve operating funds – For many nonprofits, reserves are what allow the organization to smooth out nasty bumps like loss of a grant. This is a link to an example operating reserve policy provided by the Nonprofits Assistance Fund.

2) Gross “profit” % (also called contribution to overhead) – Management certainly needs to look at days of cash on hand and surplus or deficit compared to budget, but I think it’s important for nonprofits to realize they can’t be break even. They have to generate some surplus in order to pay for improvements to plant and technology, for example. A business might look at gross profit (revenue minus operating expense, divided by revenue). So, yes, nonprofits should track this number, expressed as a ratio, in the single digits (the number depends on the budget).

3) Revenue diversification – We’ve all heard stories about nonprofits that lost a big grant on which they depended for 50 or 60% of program revenues. Depending on the nonprofit’s funding model, it should have a target “mix” in mind, e.g. the % from individual donations, the % from grants, and the % from its major fundraising event.

4) Donor growth or average gift growth – A nonprofit may have plenty of donors, but a fairly small average gift size, or it could see its future strength coming from attracting more/new donors. What the right indicator is depends on the nonprofit’s situation, but it needs one or more indicators that reflect its fundraising strategy.

5) Program efficiency – Large funders are becoming savvier shoppers. They want to know that a program is achieving real long-term outcomes and that it is a good or better approach relative to others. Now is the time to start considering how many clients were served for the money (including some allocation of overhad).

6) Client service/satisfaction – The problem with measuring long-term outcomes is, well, they’re long term. Nonprofits have to translate the outcomes they hope to achieve into mid-term and short-term indicators such as the percent of clients completing a program and client satisfaction.

7) Volunteer supply or growth – For nonprofits that depend on volunteers to deliver their programs, tracking volunteer supply vs. budget and volunteer growth (net of attrition) are important indicators.

8) Meeting (big) contract standards – If the nonprofit has government funding for a program, there will be specific standards in the signed scope document.

9) Training completion – Hopefully the nonprofit has a documented process for delivering services, with expectations down to the employee or volunteer level. Ensuring that 100% of employees or volunteers is trained according to the organization’s service standards would be a worthy indicator.

10) Strategic goals or big project milestone tracking – If the organization has an approved strategic direction with specific objectives, or has budgeted for a big capital improvement, it would be appropriate to include high-level milestones in the dashboard indicators report.

Here are some more thoughts from Compasspoint.com’s Board cafe.

Technology to the rescue: business intelligence tools

Believe it or not, dashboards are a baby step (but a really, really important one). If your organization has absorbed the idea of paying attention to a limited number of critical indicators, it may be time to consider tools that make the job easier. Idealware.org has a great page about business intelligence tools you should check out.

A Nonprofit’s Business Plan for a New Program

Organizational business planning is like carpentry. You’ve got the elevations and floor plans, but you have to build the house, and build it right. (Yesterday’s blog post contains practical tips about organizational business planning.)

Business planning for a new program or service is more like engineering. The problem of how to achieve the desired result could be accomplished several ways, but you have to figure out the optimal approach and then do the calculations to prove that it will work. Practical tips for creating a business plan for a new program is the focus of today’s post.

I recently made two suggestions to a nonprofit that has staked out its intent to develop a new program to address an unfilled community need:

1. At the idea stage, use a framework for evaluating the program model options, and
2. Agree on the end-state of the proposal for the pilot that will go to the Board for funding

I’m interested in what program evaluation criteria you’ve found helpful, as well as what you include in a business plan that will be used to propose a new program.

I’m sharing my take in the hopes you will share your experience. And of course I’ll publish comments here on Philanthrophile.

Framework for evaluating program model options:

Based on the program profile:

1. Not duplicative: To what extent is this program truly needed and different than existing programs that address this need?
2. Measurability: How likely are we to be able to identify a measurable outcome from this program? (definition = long-term end result) Note: requires a clear theory of change.
3. Core Capabilities: To what extent is this something that draws upon our current knowledge of the community and operational experience?
4. Ease of Implementation: How hard or easy will this program be to set up and manage? (The more “moving parts” and new processes, the harder.  Also, the availability of partners/allies is not listed as a separate criteria, but will affect ease of implementation, etc.)
5. Affordability: How confident are we that we have the financial resources absorb the startup expense without putting our other programs at risk?
6. Confidence: How confident are we that our estimates of cost are realistic?
7. Staff-ability: How likely are we to be able to manage this new pilot program without putting our current operation at risk?
8. Fund-ability: How likely are we to be able to secure seed funding for the pilot program?
9. Volunteer resources: How likely are we to be able to secure reliable volunteers for this program?
10. Scalability: If this program is successful, how easy or hard would it be to expand and scale it?
11. Mission fit: Does well does this fit our general mission and what people expect of us?
12. Sizzle factor: How potentially exciting is this program to the community and our supporters?

Program Proposal

Once you have a pretty good idea about the program model, it’s important to develop a document that puts the meat on the bones and provides assumptions for the financial pro forma.

Table of Contents

• Executive summary
  • What is our strategic intent in developing this program? Is this about broadening our response to need, or deepening what we already do?
  • How does this fit within our mission and history?
  • Proposed program profile (elevator speech)
• Proposed outcomes and theory of change: What are the specific outcomes for which we want to be held accountable? How will our proposed program work to achieve the outcomes we aim to achieve?
• Target audience profile: what do we know about who they are, how many there are, where they are, and how they are (e.g. status)
• Operational requirements
  • Human resources
    • Staff including management oversight
    • Volunteer
  • Administrative business processes
  • Physical plant
  • Partnerships
  • Distribution
  • Transportation
  • Technology
  • Quality evaluation (how will we know we are providing service that meets clients’ needs?)
• Funding targets (what are the top sources of funding dollars that might support this?)
• Financial pro forma including allocation of indirect costs, with upside and downside scenarios
  • Cost per client
• Dependencies (are there certain resources – internal or external – that we are dependent upon to implement the pilot successfully, on time?)
• Milestones and monitoring plan

Share this with friends in the nonprofit sector and invite them to contribute observations from their practical experience. We’ll all benefit!

Organizational Business Planning for Nonprofits

Back in April I wrote about the successful conclusion of a year-long D.I.Y. strategic planning process I facilitated for a small nonprofit.

Toward the end of the retreat that sealed the deal, the incoming chair asked, “How do we make sure that the strategy is implemented? What does the Board need to track?”

Great questions. While it’s important for the Board to track the progress of the strategic plan and key performance indicators through a dashboard (more on that next), it actually isn’t the Board’s job to micromanage the myriad of steps that will go into an implementation plan. That’s what a business plan is for as a tool of the executive director.

The job of the business plan, as I’m defining it here, is to bring the strategic plan to life. How will the executive director, in concert with its partners and allies, build out the strategy? Whereas this particular strategic plan has a five year horizon (five years because the small nonprofit needs running room to reinforce its financial base and fix core programs before it can develop new programs), the organizational business plan will be what the executive director uses to keep on top of the most critical tasks in the 1-3 years ahead.

What did it look like? Nuts and bolts. A project plan, broken into monthly milestones, created in Excel. (Digital project planning software is handy when large teams need to collaborate, but it doesn’t add much value when a small handful of people are performing all of the activities. Larger organizations also tend to include more narrative because they are used as a tool to communicate direction and priorities to the “ground troops,” but in this case the executive director would have been preaching to herself.)

The test of the business plan is this: if all of the steps are implemented on time, will they be sufficient to ensure the successful implementation of the strategic plan? If not – if it doesn’t have sufficiently robust activities to ensure the financial stability of the organization, customer and donor satisfaction, achievement of chosen outcomes and operational stability – then something is missing. It’s back to the drawing board or at least the computer.

As an organizing scheme for the project plan, we used a slightly modified version of the four perspectives typically associated with a strategy map and dashboard: financial, client and donor value proposition, operations and organizational capability. (The strategy map, developed by Robert Kaplan and David Norton, was originally developed for businesses in general and later adapted to nonprofits. Several years back, I led a workshop for nonprofit executive directors under the auspices of the Nonprofit Resource Center to help them devise a strategy map for their own organizations.)

Besides the organizational business plan, this small nonprofit also has work ahead of it to develop a new program. The term for that kind of plan is also “business plan,” but it will look a lot different. A business plan for a new program considers alternatives, creates the case and builds the operational plan for a new program. Then it demonstrates the sustainability of the new program with a financial pro forma that is pressure tested to create best case and worst case scenarios.

Stay tuned for more about how to create a business plan for a new program.

[For another point of view on the definition of a business plan, it’s worth looking at the approached used by Bridgespan, a large consulting firm that specializes in nonprofits. It defines business plans as an opportunity to “connect the dots between mission and programs, to specify the resources that will be required to deliver those programs, and to establish performance measures that allow everyone to understand whether the desired results are being achieved.” As a starting point, Bridgespan recommends looking at the entire portfolio of a nonprofit’s programs and taking stock, asking what audiences it really wants to serve, to achieve what outcomes, and which outcomes go farthest to achieve positive change. (More detail on their approach, which is methodical and thorough, is included in their white paper on the topic.) The DIY strategic planning process we just completed asked those very questions. So what they’re calling a business plan, I’m calling a strategic plan. Potato, po-tah-toh, either approach will take a nonprofit to a stronger, more outcomes-focused place.]