Editor's Note: This is the sixth in a seven-part series on how to build your advisory services for non-profit organizations. Here, Altruist Partners'Donald Summers shares eight battled tested practices used by innovative, high performing non-profits.
Are you looking for a process that is proven to help nonprofits overcome chronic management, performance and financial barriers allowing them to capture their full potential and grow 25 percent annually? One that works consistently across organizational type, field, size and location?
It exists. It is described here. It took us a decade to figure it out, drawing on the entirety of the organizational literature, hard work with over 100 nonprofits, and a lot of wisdom gained through mistakes.
The process is not easy. It requires focus, grit, optimism, courage, discipline, and urgency. But it works.
Don’t confuse your tax status with your business model. Nonprofits that want to overcome longstanding barriers must get into the mindset of a performance and growth oriented enterprise. This transition evolves nonprofits from the traditional, constraining culture of poverty to a new realization: they want to make as much money as possible—with absolute integrity, transparency and accountability—so they can deliver as much good as possible.
Here’s the process in a nutshell. It requires expert guidance, and again, it’s not easy. But it sure beats the alternatives. If you are trying to solve an important problem, don't nibble around the edges. Think like a startup. Go big or go home.
1. Write a Business Plan. Keep it in draft form, under 10 pages and answer these basic questions: What problem are you solving? How can you prove you are the best at solving this problem? What exactly does success look like, in specific, measurable terms? What are your winning strategies? What is your detailed 5-year financial projection, with revenue from all 5 funding domains (gov’t, foundations, corporations, individuals, earned income)?
You need to get all of this in your plan, with specific, quantitative performance measures. (And once you get this done, boil it down further into a short pitch deck.)
2. Find Prospective Investors. Share your draft plan with everyone who does or should care about you and has the liquidity to invest what you define as a major investment (at least $10K; typically more like $25K; $50K-100K for larger orgs.) Use events to acquire names; wealth screening tools to identify the highest capacity prospects; referrals from your current supporters; and direct approaches to major funders in your space. If you have a great business plan, and you approach with both humility and urgency, you will get their attention.
3. Build Investor Relationships and Buy In. Typically, this takes 5 to 10 in-person, in-depth meetings. Ask for money, get advice. Ask for advice, get money—eventually. Build trust and relationships by getting advice on your plan and iterating it continuously. Keep it drafty. No slick brochures! Don’t be shy or hide the ball: tell people you are looking for major investments.
4. Make the Proposal. After multiple meetings with prospective investors, you are ready. “Jill, we’ve had a number of robust, in-depth conversations about this organization and we are grateful for your guidance. Now that the plan looks good—with your feedback—we are ready to have you join us as an investor in making this all happen. May we send you a draft proposal?”
5. Track Your Activity. Develop the discipline to measure and report on the number of meetings you have each week with all prospects, sorted by revenue type and the stage of the relationships. The process to do this is well known: it's called a pipeline. Only the biggest, most successful nonprofits run them, and that's why they are big and successful.
Read The Four Disciplines of Execution for a primer on how to run focused pipeline meetings. There is a lot of detail required here on measurement, process and protocol, but if you don't know what a pipeline is, start getting curious.
6. Report on Investment. This is where 95% of charities fail. You need to demonstrate the specific things that you did with your investors’ money. Saying thank you is woefully inadequate. Report, in person, to all major donors and make sure they come away with a strong sense of value.
7. Support it all with a great dashboard. Tableau Corporation offers free software and coaching for setting up a dashboard. You should be tracking 1) how much of the problem you are solving versus your long term goal; 2) what your quality indicators are; 3) your financial status, and 4) your revenue status. Like your business plan, your organizational dashboard is simultaneously your internal management document and your external marketing and engagement tool. Be transparent and accountable.
The devil is in the details. There is a lot of expertise and elbow grease required to do all this right. Don’t let that stop you. We've seen dozens of great organizations break free and start a new path to high performance, high growth, and maximized impact. If we can get more organizations to join them, we'll have the social revolution we need.
Donald Summers, founder and managing director of Altruist Partners LLC, is a speaker, author, social entrepreneur and management consultant with a long track record of catalyzing dramatic gains in impact, growth and performance. His clients influence state, federal and international laws and regulations, and are regularly featured in major media outlets such as The New York Times and "60 Minutes." In addition, his essays, articles and commentary have been published by the American Academy of Arts and Sciences, the Chronicle of Higher Education and Harvard Magazine.