Sustainability & Business Model Cohort Kickoff Steve Zimmerman, - PowerPoint PPT Presentation

Sustainability & Business Model Cohort Kickoff Steve Zimmerman, CPA, MBA Spectrum Nonprofit Services @SpectrumSteve

Welcome

Our Timeline Phase Process Step Format Dates Sustainability Theory Business Model Overview Webinar Kick Market Analysis Framework November 6* Phase 1: Off Cohort Process Description Foundations of Intended Impact Sustainability Direct Beneficiaries December 10 1 Day In- 9:00 AM – 3:00 Define Programs Person Session PM ET Mission Impact Assessment Phase 2: Webinar January 22* Profitability / True Costs Business Model Data Revenue Analysis Webinar Feb. / Mar. Key Messages of the Matrix Phase 3: Map 1.5 Day In- April Business Person Session Communication & Reporting Model Analysis & Peer Learning Webinar May / Jun. Strategy Coaching (25 hours shared among all organizations) *All webinars from 12:00 PM – 2:00 PM ET (unless otherwise noted)

Cohort Goals  An in-depth understanding of your organization’s business model as picture by the matrix map, and a framework for making ongoing strategic decision to strengthen your business model. This includes: – A statement or outline of intended impact; – Knowing the true full costs and profitability of your programs; – A structured discussion to assess the relative impact of each program; – Knowledge of the organization’s revenue mix; Initial strategic priorities to strengthen the  organization’s business model and sustainability.

Our conversation  Sustainability Overview  Nonprofit Business Models  Nonprofit Markets  Matrix Mapping Process  Your Goals  Next Steps Feel free to chat questions to us during the webinar

What is Sustainability?

Financial Strategy

Impact Financial Strategy Strategy

Defining 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.) - - Nonprofit Sustainability: Making Strategic Decisions for Financial Viability

Defining Sustainability So what’s the answer?

Defining Business Model What is a business model? “A business model is a company's plan for making a profit. It identifies the products or services the business will sell, the target market it has identified, and the expenses it anticipates” --- Investopedia

Defining Business Model Business Model Examples

Defining Business Model But, nonprofit business models work differently than for-profit models • Those paying for funds are often not the same as those receiving services and may value the service differently • Donors can restrict funds • We often “price” work at below actual cost • We may draw on volunteers and in-kind donations • We are not expected to be profitable, but we must be.

Defining Business Model Different strategies, same mission

Defining Business Model Nurturing the business model requires constant consideration of: - Nonprofit Quarterly

Defining Business Model Impact Financial Strategy Strategy Your hypothesis about which impacts will engage human and financial participation

Defining Business Model Operationalizing Your Business Model Your hypothesis about which impacts will engage human and financial participation  From here, a chosen set of mission specific and fund development activities that work together to achieve BOTH mission impact and financial viability.  Every organization’s set of activities is unique and represents management’s and the community’s best thinking of how to be sustainable.

Defining Business Model But how do we see our business model?

The Matrix Map

The Matrix Map

Sample Matrix Map Learning 4.00 Center Exhibits Education Permanent Collection 3.00 Film $(300,000) $(100,000) $100,000 $300,000 $500,000 $700,000 Membership Profitability 2.00 Individual Giving Store Fees Planned giving Government Funding Impact 1.00

Matrix Map Overview  What we do (bubbles)  Mix of mission- specific (blue) and fund development programs (green) (color of bubbles)  Where we are investing our resources (size of bubbles)  The net financial results of each activity (horizontal axis)  Relative mission impact of each activity (vertical axis)

Matrix Map Process Assess Mission Impact Articulate Making Analyzing Define Plotting Intended Determine Strategic Programs Your Map Your Map Impact Profitability Decisions Analyze Revenue

Starting with Impact

Profitability Determining Profitability Organization Surplus Deficit Surplus Deficit Surplus Surplus Deficit Surplus Deficit

What is the The Matrix Map right revenue strategy for our organization?

SHOW ME THE MONEY!

“Maintaining multiple, highly diverse revenue streams can be problematic when each requires, in essence, a separate business. Each calls for specific skills, market connections, capital investment, and management capacity.” Clara Miller “Shattering the Myth About Diversified Revenue” Chronicle of Philanthropy, September 2010

How do we find the “right revenue” strategy?

The Matrix Map COMMUNITY

The Nonprofit Market

Matrix Map Process Assess Mission Impact Articulate Making Analyzing Define Plotting Intended Determine Strategic Programs Your Map Your Map Impact Profitability Decisions Analyze Revenue

SUSTAINABILITY is an orientation, not a destination.

Sustainability involves ongoing decision making about your business model.

Tools for Decision Making Revenue Analysis Templates Market Mission Impact Analysis Assessment Framework True Cost / Matrix Map & Profitability Strategic Template Imperatives Decision Intended Implementation Impact Making Templates Statement

Leadership Financial Impact Strategy Strategy

Goal Setting Your Turn What are your goals for this project? Write down the 1 – 3 most important lessons / skills you hope to achieve through this program.

Our Timeline Phase Process Step Format Dates Homework Sustainability Theory Business Model Overview Webinar Kick Market Analysis Framework November 6* None Phase 1: Off Cohort Process Description Foundations of Intended Impact Sustainability Direct Beneficiaries December 10 1 Day In- 9:00 AM – 3:00 6 – 8 Hours Define Programs Person Session PM ET Mission Impact Assessment Phase 2: Webinar January 22* 6 Hours Profitability / True Costs Business Model Data Revenue Analysis Webinar Feb. / Mar. 2 Hours Key Messages of the Matrix Phase 3: Refine / Map 1.5 Day In- April communicate as Business Person Session needed Communication & Reporting Model Analysis & Peer Learning Webinar May / Jun. None Strategy Coaching (25 hours shared among all organizations) *All webinars from 12:00 PM – 2:00 PM ET (unless otherwise noted)

You’re not alone . . The Spectrum team is here to help: Steve Zimmerman Chris Fink Steve Strang stevez@spectrumnonprofit.com chrisf@spectrumnonprofit.com sstrang@spectrumnonprofit.com 414.226.2322 414.727.1029 414.727.4676

Next Steps Next Session: In-Person o Intended Impact o Define Programs o Mission Impact Assessment Cohort Website http://spectrumnonprofit.com/troweprice/