`` THE SUSTAINABILITY MINDSET Understanding and Strengthening Nonprofit Business Models

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1 `` THE SUSTAINABILITY MINDSET Understanding and Strengthening Nonprofit Business Models Today, nonprofit leaders are deeply challenged by an array of complex, changing, urgent pressures that demand faster, smarter decisions than ever before. Success cannot be driven or measured by long-term, detailed plans and whether those plans were carried out as written. Instead, community nonprofits sail in stormy seas where changing conditions mean a new route must be plotted every day. And on board these tossing ships is precious cargo: the lives of people in our communities, and the spirits and hearts of communities themselves. -Nonprofit Sustainability: Making Strategic Decisions for Financial Viability Steve Zimmerman Market Space 2016 Page 1 of 6

2 Nonprofit Sustainability What does this mean? Write down 5 words or phrases that you associate with nonprofit sustainability Page 2 of 16

3 What is Sustainability? Sustainability encompasses both financial sustainability (the ability to generate resources to meet the needs of the present without compromising the future) and programmatic sustainability (the ability to develop, mature, and cycle out programs to be responsive to constituencies over time). It is an Orientation, not a Destination It is not a one-time thing, not an episodic thing, not a senior management thing or a board of director s thing. It s really a mindset and way of organizational being. -The Sustainability Mindset: Using the Matrix Map to Make Strategic Decisions Your Business Model Hypothesis about which impacts will engage human and financial participation. What are two strong aspects of your business model? What are two aspects of your business model that you are worried about? Page 3 of 16

4 Assess impact The first step in making the business model explicit is identifying the organization s core activities, both mission-specific programs and fund development programs. Impact Unexpectedly, discussions about mission impact are often difficult to hold in nonprofit organizations. There's an implicit assumption that everything is important, that everything is working towards the mission. And that's usually true. But everyone also realizes -- yet seldom says -- that some programs have higher impact than others.. Assessment Criteria Example Criteria Excellence in execution Scale Depth Filling Important Gap Builds Community Leverage Contribution to intended impact Definition Is this actvity something that we deliver in an exceptional manner? How many people are touched, influenced, affected by this activity? How deeply do we touch people with this activity? Would someone step in to fill our shoes on this if we stepped away? How does this program help build community around our organization and/or the movement of which we are a part? Does this program nurture important relationships and partnerships inside and outside the organization? Relative to our other programs, how well does this program contribute to our core goals? Page 4 of 16

5 Know Your Community (two or more markets) Are the dynamics of our market changing in critical ways? Position in Field or Movement Who are the 3-5 most similar organizations to ours in the market? Are their programs growing and/or changing in ways that move them closer to or further from our approach and constituency? Have they developed programming that feels fresher than ours? Programming that they execute on better than we do? Compared with three years ago, do we feel more or less threatened by competion? Do we actively contribute to network(s) critical to our intended impact? Do we have staff and board members viewed as thought leaders in our community or field? Do we have strategic relationships in the government and business sectors? Page 5 of 16

6 Perception among Donors and Funders When we ask funders what other nonprofits they admire in our area, who do they suggest? What do they admire about them? Can we anticipate changes at the funder that increase risk or opportunity for us? Which or our revenue streams are trending upward? Downward? Perception among Clients and Participants What changes do we see in how or which clients and participants engage with our organization? How many stars would our clients/participants give us on Yelp? (1-5) Invest in Your Bright Spots Which of your revenue strategies are currently working for your organization? Where might you invest to enhance those strategies? Page 6 of 16