It has been said that “nonprofit is a tax status, not a business strategy.” Perhaps you’ve also heard the phrase “no money, no mission.” The reality is that nonprofits need financial resources to accomplish the good they seek to do—and they can be strategic in finding those resources.
While many social nonprofits use fundraising as a strategy for financial growth, this is rarely the case for professional societies and trade associations. Their revenues often come from membership dues, publication subscriptions and royalties, and proceeds from meetings and educational offerings. Other nonprofit organizations are expanding traditional revenue streams by marketing their position as neutral third parties and community conveners to not only enhance the contribution to their field, but also increase available resources to deliver services.
Our organization has been able to assist in this area by partnering with nonprofits to develop a combination of strategic thinking and tactical execution. Our approach, called the Nexight Partner Opportunity Development Process, is shown here:
Below is a brief description of each of the key elements.
Define partner objectives and need. Strategic thinking must lead to tactical execution. While this seems logical, we too often see organizations that chase a specific opportunity because it offers the potential for some “fast money.” This is an unsustainable approach—especially if the immediate prize is not a good fit with the mission and objectives of the organization. Clearly articulate the organization’s objectives upfront and define the metrics for success through a facilitated process with key stakeholders in the organization.
Identify the opportunity space. With a well-crafted goals statement, you can now assess the environment, looking for specific areas where the organization’s interests coincide with prospective funders’ needs. This requires a broad awareness of relevant initiatives and the specific programs where you can contribute. The resulting assessment, which must be updated regularly, allows the organization to respond effectively over time and be tuned in to emerging opportunities.
Develop pathfinding concepts. Pathfinding concepts, or the areas of greatest strategic interest that best leverage the organization’s unique capabilities and possible contributions, are especially important at this stage of development. Develop 1-2 page “white papers,” which are useful for both internal and external marketing, since an organization’s members are often some of its most effective champions.
Gather feedback and refine concepts. The conceptual white papers provide a basis for discussion with supporters, including both prospective funders and partners. Outreach and discussion is necessary to gather input on the concepts and refine them. In many cases, this process results in new areas being identified and, at a minimum, raises awareness within the community of the organization’s interests and goals. This can often “plant the seed” for downstream opportunities as well.
Seek and secure support. Outreach should identify particular program areas that warrant further proposal development. Whether these are sole-source or competitive solicitations, responsive proposals often require a significant effort. Keeping the organization’s goals in mind throughout this process is critical to make sure that efforts remain strategically on track.
Launch pathfinding projects. Getting the initial projects underway and executing them with excellence is vital to building the organization’s reputation as a reliable partner. Structuring and supporting the project teams and effective project management practices are key elements.
Develop spin-off concepts. The processes of outreach and project execution often lead to new opportunities, both follow-ons of the current projects and extensions beyond them. The latter can result from members of the community recognizing, perhaps for the first time, that the organization is active in developing and performing project work. Repeating the earlier step of developing 1-2 page white papers for spin-off concepts provides the basis for further development discussions with prospective supporters followed by the “gather feedback and refine concepts,” “seek and secure support,” and “launch spinoff projects” steps.
Can all this “process” create value for a nonprofit? One professional society has seen significant benefit from this approach. It acquired five funded projects representing $1.6 million in new revenue in a 16 month period, and currently has five proposals pending valued at $3.6 million. The project work has also allowed them to connect with 20 project partners, expanding their reach and impact in the community.
Pursuing an opportunity development path may require new thinking for many organizations that are used to delivering “standard” services to their members, but the effort can be well worth the time in both dollars and sense.